Louisiana Senate Bill SB31

Louisiana 2021 Regular Session

• Introduced: 3/3/21
• Refer: 3/3/21
• Refer: 4/12/21
• Report Pass: 4/26/21
• Engrossed: 4/29/21
• Refer: 5/3/21
• Report Pass: 5/17/21
• Enrolled: 6/10/21
• Chaptered: 6/16/21
• Passed: 6/16/21

Caption

Provides an exemption from state individual income tax for digital nomads. (gov sig) (EN SEE FISC NOTE GF RV See Note)

Impact

The bill significantly alters Louisiana's individual income tax landscape by introducing a targeted incentive aimed at attracting digital nomads. This lack of taxation on a substantial portion of income for new residents encourages a diverse workforce to relocate to Louisiana. The initiative is anticipated to foster economic growth and creativity within local economies through an influx of individuals who work remotely while contributing to the state through taxes on local spending and activities.

Summary

Senate Bill No. 31, enacted by the Louisiana Legislature, introduces an individual income tax exemption targeted at digital nomads—individuals working remotely who establish residency in Louisiana. This bill is designed to stimulate the state's economy by attracting skilled remote workers who can contribute to local development. Eligible individuals may receive a tax exemption of 50% on their gross wages for a maximum income of $150,000 over a two-year period during the taxable years 2022 through 2025, provided they meet certain conditions, including holding major medical health insurance and fulfilling residency requirements.

Sentiment

The sentiments surrounding SB 31 show a generally positive outlook among supporters who see it as a progressive step toward bolstering Louisiana’s attractiveness as a destination for remote workers. Advocates argue it could lead to increased housing demand and benefit local businesses. However, some critics raise concerns about the long-term sustainability and effectiveness of such measures, questioning whether it genuinely addresses the state's broader economic challenges or merely serves a narrow demographic.

Contention

Notable points of contention include the restriction of the exempted number of taxpayers to just 500 for the lifetime of the program, which may limit its effectiveness in attracting a larger talent pool. Additionally, the bill includes specific eligibility criteria that could draw scrutiny regarding their potential to exclude otherwise beneficial contributors. The evaluation process mandated for the Department of Revenue to assess the effectiveness of this tax exemption may also lead to debates on its long-term efficacy and the implications for future policy adjustments.