The law will affect taxpayers seeking to claim credits for rehabilitating historic structures or investing in film productions. It establishes a first-come, first-served mechanism for claiming these credits, which is likely intended to streamline the process but could also result in some applicants being left without tax credits if funding is exhausted. Furthermore, the amendment enforces a termination date for state buy-backs of such credits, essentially bringing an end to the previous practice and imposing stricter financial limitations upon these programs.
Summary
Senate Bill 266, introduced by Senator Adley, seeks to amend existing tax credit laws regarding the rehabilitation of historic structures and incentives for the movie industry. The bill establishes specific caps on the amount of tax credits that can be claimed in a fiscal year: $208 million for motion picture investor tax credits and $46 million for historic structure rehabilitation credits. This new structure is intended to bring fiscal clarity and align the tax incentive framework more closely with historical claims, thus controlling the financial exposure of the state to these credits.
Sentiment
The general sentiment surrounding SB 266 is mixed. Proponents argue that the amendments will help stabilize the state's budget and encourage responsible fiscal management regarding tax credits. However, critics may view it as a reduction of financial support for the movie industry and local historic preservation efforts, suggesting that it could hinder economic opportunities related to tourism and film production. There is a concern that such caps may lead to decreased investments in significant rehabilitation projects across the state.
Contention
A notable point of contention is the impact of these caps and changes on the long-term viability of tax credits as a tool for economic development. Some stakeholders fear that limiting credits may dissuade filmmakers and investors from engaging in Louisiana's economy. The shift to a first-come, first-served basis may foster competition, but it may also create unfair barriers for smaller developers and projects, leading to a potential loss of diverse investments in cultural and historical projects.
Reduces the rates for the tax levied on individual income tax in favor of a flat tax and eliminates all individual income tax credits, deductions, exclusions, and exemptions
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)
Provides a flat corporation income tax rate and eliminates the usage of certain tax credits against corporation income tax. (gov sig) (OR -$144,000,000 GF RV See Note)
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)