Repeals tax credits for local inventory taxes paid. (gov sig)
Impact
The repeal of R.S. 47:6006 is expected to impact the operational costs for manufacturers, distributors, and retailers significantly. By removing these tax credits, the state government may see increased tax revenues in the short term; however, it may also lead to adverse economic consequences for local businesses that rely on these credits to manage their tax liabilities. The long-term effects could influence the competitive landscape for businesses operating within the state, as higher taxes may deter investment and expansion activities in the state.
Summary
Senate Bill 126 aims to repeal existing tax credits for local inventory taxes paid by manufacturers, distributors, and retailers in Louisiana. Currently, state law allows these businesses to receive full credit against their income or corporation franchise tax for ad valorem taxes paid on inventory. The bill proposes to eliminate this financial relief, which could result in increased tax burdens for these entities starting from the 2015 tax year and beyond. If enacted, this change signifies a significant shift in how local inventory taxes are handled under state law.
Sentiment
The overall sentiment surrounding SB 126 appears to be mixed. Supporters of the repeal argue that removing tax credits could lead to a more equitable tax system and potentially increase state revenue for public services. Conversely, opponents express concerns that the bill poses a financial threat to local businesses already facing numerous challenges, particularly in a competitive market. This division in sentiment underscores the ongoing debate regarding taxation policy and its direct impact on economic activity in Louisiana.
Contention
Notably, there are points of contention regarding the balance between tax revenue generation for the state and the economic viability of local businesses. Critics argue that repealing the tax credits will disproportionately affect small to medium-sized enterprises, limiting their financial resources and potentially leading to job losses. Proponents of the bill, however, maintain that the state's financial health is paramount, suggesting that easing tax burdens on larger corporations may not be justified compared to the collective benefit of increased state revenue.
Removes the refundable tax credit for ad valorem property taxes paid on natural gas held, used, or consumed in providing natural gas storage services or operating natural gas storage facilities. (gov sig)
Provides for carry forward rather than a refund of tax credits from ad valorem taxes paid to local governments. (gov sig) (OR +$40,000,000 GF RV See Note)
Provides for the tax credit for ad valorem taxes paid on inventory by taxpayers included in one consolidated federal income tax return. (gov sig) (EN DECREASE GF RV See Note)
Provides for the carry forward rather than the refund of a certain portion of the tax credit for ad valorem taxes paid on inventory. (gov sig) (Item #47) (EN +$17,300,000 GF RV See Note)