DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 2 Reengrossed 2024 Third Extraordinary Session Emerson
Abstract: Reduces the rate of the corporation income tax from a graduated system of rates and
brackets to a flat rate of 5.5% for taxable years after Jan.1, 2025, and before Jan. 1, 2026, and further
reduces the flat rate to 3.5% for taxable years on or after Jan. 1,2026; establishes a deduction for
bonus depreciation and amortization; and repeals or terminates certain income tax credits.
Present law provides that the tax to be assessed, levied, collected, and paid on the La. taxable income
of every corporation shall be computed at the following rates:
(1)3.5% on the first $50,000 of La. taxable income.
(2)5.5% on La. taxable income above $50,000 but not in excess of $150,000.
(3)7.5% on La. taxable income in excess of $150,000.
Proposed law changes present law by deleting the graduated schedule of rates dependent on the
amount of taxable income of the taxpayer in favor of a flat 5.5% corporation income tax rate for
taxable years beginning on or after Jan.1, 2025, and before Jan. 1, 2026. Proposed law further
reduces the flat corporation income tax rate to 3.5% for taxable years beginning on or after Jan. 1,
2026.
Proposed law authorizes, beginning Jan. 1, 2025, a bonus depreciation deduction for qualified
property or qualified improvement property and a bonus amortization deduction for research and
experimental expenditures, at the election of the taxpayer, for costs of qualified property, qualified
improvement property, and research and experimental expenditures. "Bonus depreciation" and
"bonus amortization" mean methods to recover costs for expenditures in depreciable or amortizable
business assets by immediately deducting the cost of the expenditures in the tax year in which the
property is placed in service or the expenditure is paid or incurred.
Proposed law prohibits any depreciation claimed from duplicating any depreciation or bonus
depreciation allowable on the federal income tax return of the taxpayer for the taxable year.
Proposed law requires federal gross income to be increased by the amount of depreciation or
amortization claimed under the Internal Revenue Code (IRC) for the qualified property, qualified
improvement property, and research and experimental expenditures for which bonus depreciation
has been claimed for taxable periods subsequent to the tax year in which the election has been made.
Prohibits proposed law from being construed to allow as an expense the excess of 100% of the cost
of property or expenditures. Present law authorizes a nonrefundable income or franchise tax credit for businesses that hire
participants in the work release programs established pursuant to present law. The amount of the
credit shall be equal to 5% of the total wages paid to an eligible reentrant in an eligible job for 12
consecutive months following the release of the eligible reentrant from imprisonment. The total
amount of tax credits granted to any eligible business shall not exceed $2,500 per eligible reentrant.
Present law prohibits credits from being granted after June 30, 2027.
Proposed law retains present law but accelerates termination for granting credits from after June 30,
2027, to certifications requested after June 30, 2025.
Present law authorizes the Board of Commerce and Industry, with approval of the governor, to enter
into tax exemption contracts with manufacturing establishments, headquarters, or warehousing and
distribution establishments seeking such exemption if requirements of present law are met regarding
the location of the entity seeking the exemption for tax equalization.
Proposed law prohibits the Board of Commerce and Industry from entering into any exemption
contract after June 30, 2025, and prohibits the board from renegotiating or approving the renewal
of an existing contract after June 30, 2025.
Present law authorizes the following tax credits for state-certified motion picture productions:
(1)A 25% tax credit if the base investment is in excess of $300,000 or if the production is a La.
screenplay production.
(2)An additional 5% base investment credit for projects filmed outside the New Orleans Metro
Zone, but not including St. John the Baptist Parish.
(3)An additional 10% base investment credit for certain expenditures equal to or greater than
$50,000 but less than $5 million for projects meeting certain La. screenplay criteria.
(4)A 15% credit for La. resident payroll expenditures.
(5)A 5% credit for certain La.-based visual effects expenditures meeting certain requirements.
Present law prohibits credits for applications received on or after July 1, 2031.
Proposed law retains present law but accelerates termination of the motion picture production tax
credit from applications received on or after July 1, 2031, to applications received after June 30,
2025.
Present law authorizes an income and corporation franchise tax credit for certain taxpayers who
employ 50 or more persons and claim a federal income tax credit for increasing research activities.
This tax credit is also available for taxpayers who employ fewer than 50 employees if the employer
meets certain eligibility requirements. Present law authorizes an additional tax credit for taxpayers who receive a federal Small Business
Innovation Research (SBIR) grant or contract and Phase I or Phase II grants or contracts from the
federal Small Business Technology Transfer (SBTT) program equal to 30% of the award received
during the tax year.
Present law prohibits tax credits for research expenditures incurred, SBTT program funds received,
or SBIR grant funds received after Dec. 31, 2029.
Proposed law retains present law but accelerates the termination date for granting credits for research
expenditures incurred, SBTT program funds received, or SBIR grant funds received after Dec. 31,
2029, to applications received after June 30, 2025.
Present law authorizes a tax preference known commonly as the "rehabilitation of historic structures
tax credit" which provides a credit against income and corporation franchise tax for the amount of
eligible costs and expenses incurred during the rehabilitation of a historic structure that meets
qualifications provided in present law. The amount of the credit shall equal 25% of the eligible costs
and expenses of the rehabilitation incurred on or after Jan. 1, 2023, and before Jan. 1, 2029,
regardless of the year the property is placed in service. For the rehabilitation of a historic structure
located in a rural area, the amount of the credit shall equal 35% of the eligible costs and expenses
of the rehabilitation incurred on or after Jan. 1, 2023, and before Jan. 1, 2029.
Present law prohibits the issuance of a credit for expenses incurred on or after Jan. 1, 2029.
Proposed law retains present law but accelerates termination of the credit for Part I applications
received after June 30, 2025.
Present law establishes the Angel Investor Tax Credit program which authorizes a 25% income or
corporate franchise tax credit on investments in La. small businesses that are certified by La.
Economic Development (LED) as "Louisiana Entrepreneurial Businesses".
Present law limits the total amount of credits granted under the program to $3.6 million per year but
authorizes LED to carry forward residual unused credits in any calendar year to subsequent calendar
years without regard to the annual credit cap. Prohibits credits from being granted or reserved for
applications received by LED on or after July 1, 2030.
Proposed law retains present law but accelerates the termination date for granting or reserving credits
from on or after July 1, 2030, to after June 30, 2025.
Present law authorizes an income or franchise tax credit for applications for state-certified digital
media productions submitted to the office of entertainment industry development on or after July 1,
2017, and subsequently approved by the office and secretary of economic development, that shall
be earned by a company at the time funds are expended in La. on a state-certified production. The
amount of the credit shall be equal to 18% of the base investment and an additional 7% tax credit
to the extent the base investment is expended on payroll for La. residents employed in connection
with a state-certified production. Proposed law retains present law but terminates the credit beginning July 1, 2025, and prohibits
credits from being granted for applications received after June 30, 2025.
Present law authorizes a state income tax credit for investments made in state-certified sound
recording productions until July 1, 2026. The tax credit is earned by investors at the time
expenditures are certified by LED according to the total base investment certified for the sound
recording production company per calendar year. The aggregate amount of credits that can be
certified each year is limited to $2,160,000; however, 50% of the credits certified each year shall be
reserved for qualified music companies (QMC).
Present law provides that the amount of the credit for each investor for state-certified productions
received on or after July 1, 2017, is 18% of the base investment made by that investor in excess of
$25,000 or, if a resident of this state, in excess of $10,000. Present law provides for the following
additional tax credits for state-certified productions:
(1)QMC Tier 1 payroll credit of 10% for each new job with a salary of $35,000 through $66,000
per year.
(2)QMC Tier 2 payroll credit of 15% for each new job with a salary of $66,000 but not more
than $200,000.
(3)Additional 10% increase in the base amount if the base investment is expended by a QMC
on a sound recording of a resident copyright.
Proposed law prohibits credits from being allowed or granted for applications received on or after
July 1, 2025. Otherwise retains present law.
Present law provides for the Enterprise Zone Program under which the Board of Commerce and
Industry can enter into contracts after consultation with the secretary of LED and the secretary of the
Dept. of Revenue with qualified applicants for rebates of state and local sales and use tax or a
refundable investment income tax credit equal to 1.5% of the amount of qualified expenditures.
Present law prohibits LED from accepting new advance notifications for the Enterprise Zone
Program on or after July 1, 2026.
Proposed law retains present law but changes the deadline for LED to accept new advance
notifications from on or after July 1, 2026, to on or after July 1, 2025.
Present law authorizes an employer to earn and apply for a refundable credit on any income or
corporation franchise tax liability in the amount approved by the secretary of LED for qualified
expenditures incurred by the employer for a modernization pursuant to the Retention and
Modernization Act. Further provides that for credits approved on and after July 1, 2017, the amount
of the credit granted shall be 4% of the amount of qualified expenditures incurred by the employer
for modernization with the credit divided in equal portions for five years. The total amount of modernization tax credits granted in any calendar year shall not exceed $7.2 million regardless of
the year in which the credit is claimed. A retention and modernization tax credit shall expire and
have no value or effect on tax liability beginning with the eleventh tax year after the tax year in
which it was originally granted.
Proposed law retains present law but adds a termination date for the credit by prohibiting credits
from being issued for applications received after June 30, 2025.
Present law provides for the La. Quality Jobs Program under which LED can enter into contracts
with qualified applicants for rebates of sales and use tax and an investment tax credit. Present law
prohibits new advance notifications for the Quality Jobs Program to be accepted by LED after June
30, 2026.
Proposed law retains present law but changes the deadline for LED to accept new advance
notifications for the Quality Jobs Program from after June 30, 2026, to after June 30, 2025.
Present law requires the House Committee on Ways and Means and the Senate Committee on
Revenue and Fiscal Affairs to review various tax credit programs to determine if the economic
benefit provided by these credits outweigh the loss of revenue realized by the state as a result of
awarding such credit. Further requires the committees to make specific recommendations no later
than March 1, 2017, to either continue the credit or to terminate the credit.
Proposed law repeals present law.
Proposed law repeals the following tax rebates, exemptions, deductions, exclusions, and credits for
tax periods beginning on and after Jan. 1, 2025, and for franchise tax periods beginning on or after
Jan. 1, 2026:
(1)Tax rebates, exemptions, and credits for university research and development parks. (R.S.
17:3389)
(2)Tax exemptions and credits for the Atchafalaya Trace Heritage and Development Zone. (R.S.
25:1226 through 1226.6)
(3)Low income housing tax credit. (R.S. 47:12)
(4)Tax credit for certain full-time and part-time jobs. (R.S. 47:34)
(5)Tax credits for contributions to certain educational institutions. (R.S. 47:37 and 287.755)
(6)Tax deduction for certain disallowed expenses. (R.S. 47:287.73(C)(4))
(7)Tax credit for certain re-entrant jobs. (R.S. 47:287.748)
(8)Tax credit for certain new part-time and full-time jobs. (R.S. 47:287.749) (9)Tax credit for employment of first-time nonviolent offenders. (R.S. 47:287.752)
(10)Tax credit for bone marrow donor expenses. (R.S. 47:287.758)
(11)Tax credit for employee and dependent health insurance coverage. (R.S. 47:287.759)
(12)Sales tax exclusion for certain purchases by motion picture production companies. (R.S.
47:301(10)(a)(vi))
(13)Corporate Tax Apportionment Program. (R.S. 47:4331)
(14)Tax credit for local inventory taxes paid. (R.S. 47:6006)
(15)Tax credit for employers for donations of materials, equipment, advisors, or instructors.
(R.S. 47:6012)
(16)New markets tax credit. (R.S. 47:6016)
(17)Tax credit for purchasers from "PIE contractors". (R.S. 47:6018)
(18)Brownfields Investor tax credit. (R.S. 47:6021)
(19)Tax credit for La. Citizens Property Insurance Corporation assessment. (R.S. 47:6025)
(20)Cane River heritage tax credit. (R.S. 47:6026)
(21)Solar energy tax credit. (R.S. 47:6030)
(22)Tax credit for investments in qualified clean-burning motor vehicle fuel property. (R.S.
47:6035)
(23)Ports of La. tax credit. (R.S. 47:6036)
(24)La. import tax credit. (R.S. 47:6036.1)
(25)Tax credit for "green job industries". (R.S. 47:6037)
(26)Tax credit for restaurants and bars affected by the COVID-19 pandemic. (R.S. 47:6041)
(27)Urban Revitalization Tax Incentive Program. (R.S. 51:1801-1813)
(28)Tax exemptions within the La. Capital Companies Tax Credit Program. (R.S. 51:1932)
(29)Technology Commercialization Credit and Jobs Program. (R.S. 51:2351-2360) (30)The La. Community Development Financial Institution Act. (R.S. 51:3081-3094)
(31)The Corporate Headquarters Relocation Program. (R.S. 51:3111-3115)
(32)Competitive Projects Payroll Incentive Program. (R.S. 51:3121)
Proposed law requires the Dept. of Economic Development to annually report to the legislature the
number of new businesses that have begun operating in the state from enactment of proposed law.
Proposed law applies to income tax periods beginning on or after Jan. 1, 2025, and franchise tax
periods beginning on or after Jan. 1, 2026.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:287.12, 287.750(I), 4302(B), 6007(I), 6015(J), 6019(A)(1)(a)(i), 6020(H),
6022(D)(4)(intro. para.), and 6023(I) and R.S. 51:1787(L) and 2461; Adds R.S. 47:287.73(C)(6),
287.744, 3204(M), and 6022(M) and R.S. 51:2399.3(C); Repeals R.S. 17:3389, R.S. 25:1226-
1226.6, R.S. 47:12, 34, 37, 287.73(C)(4), 287.95(H), 287.748, 287.749, 287.752, 287.755, 287.758,
287.759, 301(10)(a)(vi), 4331, 6005(G), 6006, 6008(D), 6011, 6012, 6013(D), 6014(F), 6015(L),
6016, 6016.1(N), 6017(C), 6018, 6021, 6022(L), 6025 - 6027, 6030, 6032(H), 6035-6037, 6041,
6104(D), 6105(B), 6106(E), and 6107(C), R.S. 51:1801-1813, 1932, 2351- 2360, 3081-3094, 3111-
3115, and 3121)
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Add the tax credit for employers for donations of materials, equipment, advisors, or
instructors to the list of tax credits being repealed in proposed law.
2. Add requirement that the Dept. of Economic Development annually report to the
legislature the number of new businesses that have begun operating in the state from
enactment of proposed law.
3. Make technical changes.