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 3 Reengrossed 2024 Third Extraordinary Session Emerson
Abstract: Repeals the corporation franchise tax and removes eligibility of certain tax credits to be
claimed against the corporation franchise tax.
Present law (R.S. 47:601 et seq.) establishes the corporation franchise tax which is levied on every
domestic and foreign corporation exercising its charter, qualified to do business, or actually doing
business in La. The corporation franchise tax is also levied on any domestic or foreign corporation
owning or using any part of its capital, plant, or other property in La.
Present law provides, beginning Jan. 1, 2023, that the rate of the tax shall be $2.75 per $1,000 of
taxable capital above $300,000.
Present law provides for the determination of taxable capital for purposes of levying the corporation
franchise tax as well as the tax treatment of capital stock, surplus and undivided profits, and the
allocation of taxable capital. Present law further provides for the administration of the tax as well
as the collection and payment of the tax.
Present law requires every corporation or other entity subject to the franchise tax to pay only an
initial tax of $110 in the first accounting period in which it becomes subject to the tax. After the first
closing of the corporate books, the tax is payable as provided in present law.
Present law requires an automatic corporation franchise tax rate reduction beginning Jan. 1, 2024,
and each Jan. first thereafter, if in any year corporation income and franchise tax collections exceed
the Fiscal Year 2018-19 corporation income and franchise tax collections, adjusted annually by the
growth factor provided for in present constitution.
Proposed law repeals present law.
Present law provides for various incentives in the form of credits, deductions, exemptions,
exclusions, and rebates that are applicable against individual and corporation income tax as well as
corporation franchise taxes.
Proposed law retains present law with respect to incentives applicable against individual and
corporation income taxes but removes applicability of the following incentives against the
corporation franchise tax:
(1)La. work opportunity tax credit. (R.S. 47:287.750) (2)Tax credit for qualified new recycling manufacturing or process equipment and service
contracts. (R.S. 47:6005)
(3)Tax credits for local inventory taxes paid. (R.S. 47:6006)
(4)Tax credits for taxes paid with respect to vessels in Outer Continental Shelf Lands Act
Waters. (R.S. 47:6006.1)
(5)Tax credits for donations made to assist playgrounds in economically depressed areas. (R.S.
47:6008)
(6)Tax credits for donations made to public schools. (R.S. 47:6013)
(7)Credit for property taxes paid by certain telephone companies. (R.S. 47:6014)
(8)Research and development tax credit. (R.S. 47:6015)
(9)Tax credits for certain expenses paid by economic development corporations.
(R.S. 47:6017)
(10)Tax credits for purchasers from "PIE contractors". (R.S. 47:6018)
(11)Tax credit for rehabilitation of historic structures. (R.S. 47:6019)
(12)Tax credits associated with the Angel Investor Tax Credit Program. (R.S. 47:6020)
(13)Digital interactive media and software tax credit. (R.S. 47:6022)
(14)Tax credits associated with the La. Youth Jobs Tax Credit Program. (R.S. 47:6028)
(15)Tax credit for certain milk producers. (R.S. 47:6032)
(16)Apprenticeship tax credits. (R.S. 47:6033)
(17)Ports of Louisiana tax credits. (R.S. 47:6036)
(18)Child care provider tax credit. (R.S. 47:6105)
(19)Business-supported child care tax credit. (R.S. 47:6107)
(20)Tax credits associated with Enterprise zone incentives. (R.S. 51:1787)
(21)Modernization tax credit. (R.S. 51:2399.3)
Proposed law shall be applicable to corporate franchise tax periods beginning on or after Jan. 1, 2026.
Effective Jan. 1, 2026.
(Amends R.S. 47:287.750(E)(1), 6005(C)(1), 6006(A) and (B)(1)(intro. para.), (2), and (4),
6006.1(A), (B)(intro. para.), (1), (3), and (4), and (C), 6008(A), 6013(A), 6014(A), (B), and (C)(1)
and (3) - (5), 6015(B)(1) and (2), (C)(3)(a) and (d)(i), (D)(2)(intro. para.), and (K), 6017(A),
6018(B), (D)(intro. para.), and (E), 6019(A)(1)(a)(i) and (3)(a) and (b)(ii)(aa) and (dd)(I),
6020(D)(2)(a) and (3)(a) and (d)(i), 6022(E)(1)(a), (b), and (e)(intro. para.), 6028(C)(intro. para.) and
(D)(1) and (2), 6032(A) and (D), 6033(C)(intro. para.) and (D)(1) and (2), 6036(C)(1)(a)(intro. para.)
and (I)(2)(a)(i) and (b), 6105(A), 6107(A) and (B), and 6108(A) and (B)(intro. para.), (1), (3), and
(4) and R.S. 51:1787(A)(2)(a) and (b) and (G), and 2399.3(A)(1) and (3)(a) and (d)(i); Repeals R.S.
47:601 - 618, 3204(H)(1), (I)(1)(a), and (J)(1), and 4305(B)(1))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Change the effective date from July 1, 2025, to upon signature of the governor.
The House Floor Amendments to the engrossed bill:
1. Change the effective date from upon signature of the governor to Jan. 1, 2026.