SSHB2 416 212
HOUSE SUMMARY OF SENATE AMENDMENTS
HB 2 2024 Third Extraordinary Session Emerson
TAX/CORP INCOME: Provides for a flat rate for purposes of calculating corporate income
tax and terminates certain corporate income tax exemptions, deductions, and credits (Item
#4)
Synopsis of Senate Amendments
1.Changes the corporation income tax rate from a flat rate of 5.5% until Jan. 1,
2025, and then a flat rate of 3.5% from Jan. 1, 2026, and thereafter to a flat
5.5%.
2.Authorizes taxpayer subject to the corporation income tax to deduct $20,000
from the calculation of gross income.
3.Maintains the inventory tax credit for individuals and pass-through entities but
terminates the credit for taxpayers that file as C-corporations beginning on July,
1, 2026. Further eliminates eligibility of C-corporation filers from receiving
excess credit amounts as refunds beginning Jan.1 , 2025.
4.Decreases the annual cap for the issuance of motion picture production tax
credits by the Dept. of Economic Development from $150M to $125M and
decreases the annual cap for the claiming of motion picture production tax
credits on tax returns from $180M to $125M. Further prohibits the rollover of
any unused cap to the next year for tax credits granted in a final certification
letter after July 1, 2025.
5.Limits the annual amount of research and development tax credits that may be
issued to $12M.
6.Decreases the reservation cap for Application Part II applications on the
rehabilitation of historic structures tax credit from $125M per year to $85M per
year.
7.Removes the June 30, 2025, termination date for issuance of digital media tax
credits from proposed law.
8.Changes the effective date from upon signature of the governor to Jan. 1, 2025.
9.Makes technical changes.
Digest of Bill as Finally Passed by Senate
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.
Page 1 of 6 SSHB2 416 212
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 provides a credit against Louisiana income or corporation franchise tax for ad
valorem taxes paid to political subdivisions on inventory held by manufacturers, distributors,
and retailers and on natural gas held, used, or consumed in providing natural gas storage
services or operating natural gas storage facilities. The credit is refundable in certain
circumstances.
Proposed law prohibits the credit from being claimed to offset corporation income and
franchise taxes for taxable periods beginning on or after July 1, 2026. However, any
taxpayers using the credit to offset corporation income tax may carry forward any remaining
credits for an additional five years from the date that the credits would have expired under
present law. Proposed law also repeals the refundability provisions of the credit as it relates
to C-corporation filers beginning Jan. 1, 2025.
Present law provides a credit for motion picture productions in Louisiana. Present law
provides an annual cap for the application of credits of $150M and an annual cap for the
claiming of credits of $180M. Present law allows any unused cap amounts are allowed to
rollover to the next year. Present law also allows a taxpayer to transfer the motion picture
credit back to the La. Dept. of Revenue for a reduced rate.
Page 2 of 6 SSHB2 416 212
Proposed law decreases the annual cap for the application of credits and the annual cap for
the claiming of credits to $125M. Proposed law also prohibits the rollover of any unused cap
to the next year for tax credits granted in a final certification letter after July 1, 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 provisions but provides that beginning July 1, 2026, no
more than $12M of research and development tax credits may be claimed in each fiscal year.
Proposed law further provides that claims for tax credits will be on a first-come, first-serve
basis and any taxpayer whose claim for credits is disallowed because the fiscal cap has been
reached may use the credits against state income tax in the next fiscal year and receive
priority over other claims filed after the date of the original claim.
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.
Present law provides a annual application Part II reservation cap of $125M per year.
Proposed law changes the annual application Part II reservation cap from $125M to $85M
and otherwise retains present law.
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 $3.6M 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 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).
Page 3 of 6 SSHB2 416 212
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 $7.2M 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.
Page 4 of 6 SSHB2 416 212
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)
Page 5 of 6 SSHB2 416 212
(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 January 1, 2025.
(Amends R.S. 47:287.12, 287.750(I), 4302(B), 6006(A), (B)(1)(intro. para), (2), and (4), (D)
and (E), 6007(J)(1)(b)(i) and (c) and (2)(a), 6019(A)(1) (e), 6020(H), 6023(I) R.S.
51:1787(L) and 2461; Adds R.S. 47:287.71(B)(9), 287.73(C)(6), 287.744, 3204(M),
6007(J)(1)(d), and 6015(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(F), (G), and (H), 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)
Page 6 of 6