Louisiana Senate Bill SB99

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14
• Report Pass: 4/14/14
• Engrossed: 4/21/14
• Refer: 4/22/14
• Report Pass: 4/28/14
• Enrolled: 5/14/14
• Chaptered: 5/22/14
• Passed: 5/22/14

Caption

Provides for determining the fair market value of bank stock for purposes of tax assessment. (8/1/14) (EN SEE FISC NOTE LF RV See Note)

Impact

The passage of SB99 is expected to have significant implications for the taxation of banking institutions within Louisiana. It provides clarity and a uniform methodology for evaluating bank stock, which could enhance fairness and consistency in tax assessments across banks. By refining how earnings are computed—especially concerning federal obligations—this bill aims to prevent discrepancies that might arise from varying interpretations of earnings reports, thereby streamlining the overall assessment process for financial institutions.

Summary

Senate Bill 99, introduced by Senator Riser, amends Louisiana's statutory framework regarding the assessment of bank stock for tax purposes. The bill establishes more precise criteria for determining the fair market value of bank stock, specifying a formula that considers both stockholder equity and annual net earnings. Notably, it prescribes a weighted approach, with stockholder equity accounting for 80% and annual net earnings for 20% in the assessment process. Additionally, adjustments to annual net earnings are mandated to exclude revenues generated from U.S. obligations.

Sentiment

The reception of SB99 appeared to be largely positive, as evidenced by the unanimous support during the voting process, where it passed with a vote of 91-0 in the House. This strong endorsement reflects a general consensus among lawmakers concerning the necessity of establishing a clear and effective framework for bank stock assessment, which supports both fiscal responsibility and equitable taxation principles. Stakeholders likely see this as a critical step toward maintaining a competitive banking environment in the state.

Contention

While no significant opposition was recorded during the discussions or voting, potential points of contention could arise from the specific elements of the formula employed for assessing bank stock values. Critics may argue that the reliance on annual net earnings, adjusted for U.S. obligations, could disproportionately affect smaller banks or those with fluctuating earnings. As the bill is implemented, ongoing scrutiny may be warranted to ensure that the valuation criteria established do not inadvertently disadvantage certain banking entities.