Extends the carryforward period for the inventory tax credit for certain businesses. (1/1/21) (Items #26 and #65) (EN DECREASE GF RV See Note)
Impact
The legislation is expected to have significant implications for state tax laws concerning businesses. By allowing a longer carryforward period, the bill seeks to mitigate the burden on companies that may find themselves with excess tax credits due to fluctuating economic conditions. This restructuring of the tax code could enhance business investment and operational stability, positioning Louisiana as a more appealing environment for both existing businesses and new entities looking to establish operations in the state.
Summary
Senate Bill 1, introduced by Senator Ward and Representative Thompson, aims to amend R.S. 47:6006(B) regarding tax credits and incentives related to ad valorem taxes paid on inventory. The bill primarily extends the carryforward period for these tax credits, allowing taxpayers to carry forward excess credits against their state corporate income or franchise taxes for an extended period of up to ten years. This change intends to provide businesses with more flexibility in managing their tax liabilities, especially regarding inventory taxes they have already paid to local political subdivisions.
Sentiment
The overall sentiment surrounding SB1 is generally positive among business groups who argue that this change will provide necessary financial relief and help to stimulate the local economy. Supporters highlight that the extended carryforward period will assist businesses in capitalizing on tax credits from prior years without immediate constraints. However, concern has been expressed regarding the potential long-term fiscal impact on state revenues due to these tax incentives.
Contention
Despite the supportive sentiment from the business sector, some legislators have raised concerns about the implications of such tax breaks on the state's financial health. Critics argue that the bill may exacerbate disparities in funding for local services, as ad valorem taxes are crucial for municipalities. The need for a careful balance in providing incentives while ensuring sustainable funding for public services remains a significant point of contention in discussions surrounding SB1.
Provides for the carry forward rather than the refund of a certain portion of the tax credit for ad valorem taxes paid on inventory. (gov sig) (Item #47) (EN +$17,300,000 GF RV See Note)
Reduces the amount of certain ad valorem tax credits and provides for the carryforward rather than the refund of a certain portion of excess credit amounts (Item #31) (EG +$48,000,000 GF RV See Note)
Provides for the carryforward rather than the refund of a certain portion of the tax credit for ad valorem taxes paid on inventory (EG +$13,000,000 GF RV See Note)
Provides for the reduction of the amount of certain ad valorem tax credits and for carryforward rather than the refund of certain portion of excess credit amount. (gov sig) (OR +$294,000,000 GF RV See Note)
Provides for the reduction of the amount of certain ad valorem tax credits and provides for the carryforward rather than the refund of a certain portion of excess credit amounts. (gov sig) (EG +$253,000,000 GF RV See Note)
Authorizes an income tax credit for certain businesses whose operations were interrupted as a result of the COVID-19 pandemic (Items #26 and 65) (EN DECREASE GF RV See Note)
Authorizes eligibility for the inventory tax credit for certain property held by persons engaged in the short term rental of such items (EN DECREASE GF RV See Note)