Establishes a baseline limit on all claims against income and franchise tax for Research and Development tax credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Impact
The impact of SB 225 on state taxation laws is significant, as it introduces limitations that could affect small businesses seeking to benefit from research and development incentives. By capping the credits at $23 million, the state aims to control the fiscal implications of these tax credits while still promoting innovation and development. As claims will be managed on a first-come basis, businesses may face uncertainty regarding the availability of credits in a given year. This structured approach could streamline administrative processes related to the tax credit but might result in some businesses not receiving the credits they expected.
Summary
Senate Bill 225, presented by Senator Donahue, seeks to amend Louisiana's research and development tax credit program by establishing a baseline limit for claims against income and corporate franchise tax. The bill allows for a refundable tax credit up to 40% of the awards received during a fiscal year for small businesses conducting qualifying research and development activities. Notably, a cap of $23 million has been placed on the total amount of credits allowable each fiscal year, representing the average of claims made over the five previous fiscal years from 2008 to 2014. This cap is emphasized to create a more systematic allocation of tax credits on a first-come, first-served basis, with disallowed claims prioritized in the following fiscal year.
Sentiment
The sentiment surrounding SB 225 appears to be cautiously optimistic among supporters, particularly small business advocates who see this as a necessary means to ensure continued investment in research and development. However, concerns exist regarding the sufficiency of the capped amount to meet demand and the potential for businesses to be left without support. Some stakeholders express anxiety that the claim prioritization system may disadvantage newer businesses or startups that may not be as quick to file claims compared to established entities.
Contention
The contention centered around the mechanisms of implementation for the cap and the prioritization of claims. Critics express concerns that the first-come, first-served approach could lead to inequities, where larger companies with dedicated resources may outpace smaller competitors in claiming tax credits. Furthermore, stakeholders worry that limiting claims may stymie potential research advancements and innovation within the state, as not all qualified businesses may receive the necessary financial incentive from these credits due to the imposed limits.
Establishes a baseline limit on all claims against income and franchise tax for Angel Investor Tax Credit Program filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against income and franchise tax for musical and theatrical production income tax credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against income tax for Brownfields Investor Tax Credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against income and franchise tax for Angel Investor Tax Credit Program filed during a fiscal year on a first-income, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig) (OR SEE FISC NOTE GF RV)
Establishes a baseline limit on all claims against income tax for Digital Interactive Media and Software tax credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against premium tax for new market tax credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against income and franchise tax for musical and theatrical production income tax credits filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig) (OR INCREASE GF RV See Note)
Establishes a baseline limit on all claims against state taxes for industrial tax equalization exemptions filed during a fiscal year on a first-come, first-served basis and gives claims above the amount priority in the next fiscal year. (gov sig)
Establishes a baseline limit on all claims against income tax for motion picture investor tax credits filed during a fiscal year on a first-come, first-served basis, gives claims above the amount priority in the next fiscal year and provides a termination date for the program. (gov sig)
Limits all claims against income tax for motion picture investor tax credits filed during each fiscal year to $300 million, but rolls over any remaining balance to future fiscal years. (7/1/15)