Louisiana Senate Bill SB13

Louisiana 2016 1st Special Session

• Introduced: 2/17/16
• Refer: 2/17/16

Caption

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)

Impact

The bill retains the tax credit for ad valorem taxes paid on inventory but gradually eliminates refundability for taxpayers who pay less than $10,000 in these taxes. As a result, eligible taxpayers paying this amount during a tax year will no longer receive direct refunds but will instead be able to carry forward any tax credits to offset their future tax liabilities. This transition may have a significant impact on small businesses that traditionally rely on these refunds to manage cash flow.

Summary

Senate Bill 13 (SB13) seeks to amend the existing law concerning tax credits for ad valorem taxes on inventory held by manufacturers, distributors, and retailers in Louisiana. The bill proposes to phase out the refundability of tax credits over a three-year period, transitioning from a fully refundable system to one that allows credits to be carried forward against future tax liabilities. This change is aimed at modifying how these tax credits are processed and utilized by taxpayers in the state.

Sentiment

Discussions surrounding SB13 indicate mixed sentiments among stakeholders. Supporters argue that the phase-out of refundability will help stabilize state revenue by reducing the immediate fiscal impact of tax refunds, thus promoting long-term fiscal health. Meanwhile, critics, particularly from small business advocacy groups, fear that this change will create financial burden, especially for smaller entities that depend on these refunds to operate effectively, stirring concerns over access to vital cash resources.

Contention

Notable contention arises from the bill's proposed shift from a refundable to a non-refundable system. While proponents see this as a necessary adjustment to ensure future fiscal stability, opponents warn that the loss of immediate refunds could disproportionately harm smaller businesses and affect local economies dependent on inventory-based revenue. The debate emphasizes the delicate balance between state budgetary needs and the operational realities faced by local businesses throughout Louisiana.