Louisiana House Bill HB812

Louisiana 2015 Regular Session

• Introduced: 4/22/15
• Refer: 4/27/15

Caption

Provides for the carry forward rather than the refund of the tax credit for ad valorem taxes paid on certain offshore vessels

Impact

The reclassification of tax credits from refundable to carry-forward credits represents a significant change in Louisiana's fiscal policy. By limiting immediate refunds, the state aims to retain control over cash flow while still providing support for offshore vessel operators. Proponents argue that this will lead to better budgeting and financial planning for the state, as refunds can create immediate fiscal pressures. This change also aligns with a broader trend of states reassessing tax credits and refunds to manage budget deficits.

Summary

House Bill 812 seeks to amend the Louisiana tax code by changing the treatment of tax credits related to ad valorem taxes paid on vessels operating in Outer Continental Shelf Lands Act Waters. The bill proposes that excess tax credits, which would previously have resulted in refunds, can now be carried forward against future tax liabilities for up to five years. This shift impacts how taxpayers can utilize their tax credits and reduces the immediate financial burden on the state regarding tax refunds.

Sentiment

Sentiment surrounding HB 812 appears mixed. Supporters of the bill, likely including fiscal conservatives and those concerned with state budgetary constraints, view it as a pragmatic approach to manage state finances. However, detractors may argue that the bill places undue strain on businesses that depend on these tax credits for cash flow, as it delays the financial benefits that were previously accessible. The discussion around the bill reveals a deeper tension between the need for state revenue stability and facilitating business operations in a competitive offshore environment.

Contention

Contention arises from the potential economic impact on industries dependent on these tax credits. As some stakeholders may find the carry-forward provision insufficient to meet immediate financial needs, concerns have been raised about whether this adjustment will disproportionately affect smaller companies or operations in the offshore vessel sector. The debate reflects differing views on how tax policy should balance state financial health and support for businesses in key economic sectors.