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 230 Original 2025 Regular Session Walters
Abstract: Authorizes an income tax credit for motor vehicle manufacturers and motor vehicle
manufacturer suppliers based on amounts of those businesses' capital investments.
Proposed law authorizes a credit against La. income tax for any taxable year in which a qualifying
taxpayer places qualified manufacturing and productive equipment property in service.
Proposed law defines "qualifying taxpayer" as any of the following:
(1)Any entity that engages in activities classified by the North American Industry Classification
System as motor vehicle manufacturing.
(2)Any entity that has as its primary business activity the supplying of goods, components, or
services used in motor vehicle manufacturing.
Proposed law defines "qualified manufacturing and productive equipment property" as any property
that meets all of the following qualifications:
(1)It is used as an integral part of manufacturing or production.
(2)It is tangible property to which Section 168 of the Internal Revenue Code (IRC) applies.
(3)It is deemed Section 1245 property in accordance with the IRC.
(4)The property is acquired by the taxpayer and its original use commences with the taxpayer
within this state or it is constructed, reconstructed, or erected by the taxpayer within this
state.
Proposed law stipulates that in certain specified cases, computer software used to control or monitor
a manufacturing or production process inside this state may be deemed qualified manufacturing and
productive equipment property for purposes of the credit.
Proposed law provides that the amount of the credit shall equal the aggregate of all of the following:
(1)0.5% of total aggregate bases for all three-year property that qualifies.
(2)1.0% of total aggregate bases for all five-year property that qualifies. (3)1.5% of total aggregate bases for all seven-year property that qualifies.
(4)2% of total aggregate bases for all 10-year property that qualifies.
(5)2.5% of total aggregate bases for all 15-year or greater property that qualifies.
Proposed law limits the allowable amount of the credit to $10M per qualifying taxpayer per taxable
year.
Proposed law establishes that, for its purposes, property classifications shall be determined based on
the applicable recovery period for the property provided in the IRC.
Proposed law provides that if the credit exceeds the amount of taxes due from a qualifying taxpayer
for a taxable period, then any unused credit amount may be carried forward by the taxpayer as a
credit against subsequent tax liability for a period not to exceed 10 years. Stipulates, however, that
the amount of the credit applied in a taxable period shall not exceed the amount of taxes due from
the taxpayer for that period.
Proposed law sets forth requirements and procedures for recapture of credits in cases of taxpayers
disposing of qualified manufacturing and productive equipment property before the end of its
recovery period or removing that property from La.
Proposed law provides that no taxpayer shall be eligible for any other state tax credit or any other
state tax preference for activity for which the taxpayer receives a credit pursuant to proposed law.
Proposed law prohibits credits from being earned for any taxable year beginning after Dec. 31, 2031.
Proposed law applies to taxable periods beginning on or after Jan. 1, 2026.
Effective Jan. 1, 2026.
(Adds R.S. 47:6003)