SSHB3 416 214
HOUSE SUMMARY OF SENATE AMENDMENTS
HB 3 2024 Third Extraordinary Session Emerson
TAX/CORP FRANCHISE: Repeals the corporation franchise tax and limits eligibilty of
certain credits to be claimed against corporation franchise tax (Item #3)
Synopsis of Senate Amendments
1.Provides instructions on how conflicts with the Act that originated as HB No.
3 of this 2024 3rd E.S. and the Acts that originated as HB No. 10 or HB No. 2
of this 2024 3rd E.S. will be resolved.
Digest of Bill as Finally Passed by Senate
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)
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(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 provides that in any instance in which a provision of this Act conflicts with a
provision of the Act which originated as HB No. 10 of this 2024 3rd E.S., the provision of
the Act which originated as HB No. 10 of this 2024 3rd E.S. shall prevail and be given effect.
Proposed law provides that in any instance in which a provision of this Act conflicts with a
provision of the Act which originated as HB No. 2 of this 2024 3rd E.S., the provision of the
Act which originated as HB No. 2 of this 2024 3rd E.S. shall prevail and be given effect.
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))
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