SLS 21RS-695 ORIGINAL
2021 Regular Session
SENATE BILL NO. 240
BY SENATOR LUNEAU
TAX/TAXATION. Limits the utilization of income and corporation franchise tax credits
to total tax liability. (gov sig)
1 AN ACT
2 To enact R.S. 47:1675(K), relative to the utilization of income and corporation tax credits;
3 to provide that the total corporation income and franchise tax credits claimed in a tax
4 year cannot exceed the corporation's tax liability for the tax year; to provide that the
5 total amount of certain business-related individual income tax credits cannot exceed
6 the taxpayer's individual income tax liability for the tax year; to limit refundabilty
7 of refundable credits; to provide for effectiveness; and to provide for related matters.
8 Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 47:1675(K) is hereby enacted to read as follows:
10 ยง1675. General administrative provisions for credits against income and corporation
11 franchise tax
12 * * *
13 K. Limitation on the utilization of income and corporation franchise tax
14 credits
15 (1) For all taxable years beginning on or after January 1, 2022,
16 notwithstanding any provision of law to the contrary including contrary
17 provisions in applicable tax credit statutes, total tax credits allowed pursuant
Page 1 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 240
SLS 21RS-695 ORIGINAL
1 to this Chapter shall not exceed the total corporation income and corporation
2 franchise tax liability of any taxpayer required to file a corporate income or
3 franchise tax return. If the total amount of applicable tax credits authorized
4 pursuant to this Chapter exceeds the amount of tax liability for the tax year, the
5 excess credits shall not be refundable.
6 (2) For all taxable years beginning on or after January 1, 2022,
7 notwithstanding any provision of law to the contrary including contrary
8 provisions in applicable tax credit statutes, total tax credits allowed pursuant
9 to Subtitle VIII of this Title, other than the credit provided for in R.S. 47:6104,
10 shall not exceed the total individual income tax liability of any taxpayer
11 required to file an individual income tax return. If the total amount of
12 applicable tax credits authorized pursuant to Subtitle VIII of this Title exceeds
13 the amount of tax liability for the tax year, the excess credits shall not be
14 refundable, other than the credit provided for in R.S. 47:6104.
15 (3) Tax credits that are in excess of the taxpayer's tax liability for a
16 taxable year that would be refundable but for the provisions of this Subsection
17 may be carried forward as a credit against subsequent Louisiana income or
18 corporation franchise tax liability for a period not to exceed five years.
19 Section 2. This Act shall become effective upon signature by the governor or, if not
20 signed by the governor, upon expiration of the time for bills to become law without signature
21 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
22 vetoed by the governor and subsequently approved by the legislature, this Act shall become
23 effective on the day following such approval.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Leonore Heavey.
DIGEST
SB 240 Original 2021 Regular Session Luneau
Present law authorizes a variety of tax credits that can be utilized to reduce income and
corporation franchise tax due dollar for dollar and further provides that for a limited number
of these credits that any tax credit balance in excess of the current year's tax liability shall
be refunded to the taxpayer.
Page 2 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 240
SLS 21RS-695 ORIGINAL
Proposed law provides that the total tax credits available to a corporate taxpayer shall not
reduce the taxpayer's corporate income and corporate franchise tax liability below zero and
any excess credit shall not be refundable even if the statute creating the credit provides for
refundability.
Proposed law provides that the total business tax credits available to an individual taxpayer
shall not reduce the taxpayer's individual tax liability below zero and any excess credit shall
not be refundable even if the statute creating the credit provides for refundability, except for
the School Readiness child care expense tax credit.
Proposed law authorizes credits that would be refundable but for the provisions of proposed
law to be carried forward to be used against subsequent tax liability for up to five years.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:1675(K))
Page 3 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.