Louisiana House Bill HB586

Louisiana 2019 Regular Session

• Introduced: 4/15/19
• Refer: 4/16/19
• Report Pass: 5/6/19
• Engrossed: 5/22/19
• Refer: 5/23/19
• Report Pass: 5/27/19
• Refer: 5/28/19

Caption

Authorizes an enhanced Angel Investor tax credit for investments made in Louisiana Entrepreneurial Businesses located in federally established opportunity zones (EG -$500,000 GF RV See Note)

Impact

The bill seeks to improve the financial support framework for small businesses in Louisiana by providing a stronger tax incentive for Angel Investors. The change is expected to boost investment in entrepreneurial ventures, particularly in economically distressed areas, ultimately facilitating job creation and stimulating local economies. By extending the program's sunset date from July 1, 2021, to July 1, 2025, it provides additional time for businesses to benefit from this credit, thereby promoting continuous economic growth within the state.

Summary

House Bill 586 aims to enhance the existing Angel Investor Tax Credit program in Louisiana by increasing the tax credit available for investments in Louisiana Entrepreneurial Businesses located in federally designated opportunity zones. The legislation proposes to adjust how these tax credits are allocated by shortening the payout period from three years to two years, while increasing the credit percentage for eligible investments from 25% to 35%. This change is intended to incentivize investment in businesses that are crucial for economic development in specific areas identified as opportunity zones.

Sentiment

The sentiment surrounding HB 586 appears to be generally positive among proponents of business development and economic growth. Supporters, particularly those in the business community and government officials advocating for entrepreneurship, see the bill as a necessary step towards enhancing investment opportunities and fostering innovation. Conversely, there may be concerns regarding the sustainability of the program and its effectiveness in achieving the intended economic benefits, which could be debated in the legislative sessions.

Contention

One notable point of contention regarding the bill is the concern about the impact of extending tax credits and the potential shortfalls in state revenue. Critics may argue that while incentivizing investments is vital, it is essential to ensure that such measures do not lead to significant loss in tax revenue that could otherwise be utilized for vital public services. Additionally, questions may arise regarding the actual effectiveness of opportunity zones in promoting economic growth, as certain areas may not realize the intended benefits from these tax incentives.