Louisiana House Bill HB362

Louisiana 2017 Regular Session

• Introduced: 3/31/17
• Refer: 3/31/17
• Refer: 4/10/17
• Report Pass: 5/8/17

Caption

Provides with respect to income and corporation franchise tax credits (EG INCREASE GF RV See Note)

Impact

The bill proposes adjustments to the tax credits related to ad valorem taxes paid on inventory, which would affect corporations and potentially alter financial operations for manufacturing and retail businesses in Louisiana. It changes the refundability of excess credits, ensuring that any excess cannot be refunded but must be carried forward to offset future tax liabilities. The impact of these changes may lead to a significant shift in how businesses account for their taxes, especially those with fluctuating revenues and varying tax obligations.

Summary

House Bill 362 addresses modifications to income and corporation franchise tax credits in Louisiana, aiming to streamline tax incentives primarily for businesses. One of the significant changes proposed includes extending the existing cap on tax credits for motion picture production, originally set to expire, while gradually decreasing the allowable credits by fiscal year 2028. This approach seeks to balance the continuation of incentives for the film industry with the need for fiscal responsibility.

Sentiment

Discussion surrounding HB 362 elicited mixed sentiments among legislative members and stakeholders. Proponents of the bill highlight its necessity for promoting business investment and stability within the State, especially within the entertainment sector, which significantly contributes to Louisiana's economy. Conversely, critics are concerned about the long-term sustainability of such tax incentives and what they perceive as an erosion of potential tax revenue that could support public services.

Contention

One notable point of contention is the bill's proposed gradual phase-out of the motion picture production tax credits alongside limiting refundability for excess credits. Those in favor argue it ensures support for a vibrant film industry while allowing the state to maintain budgetary control. Detractors argue that decreased tax credits could deter new productions and investments in Louisiana's entertainment industry, ultimately affecting job creation and local economic growth.