Louisiana Senate Bill SB79

Louisiana 2023 Regular Session

• Introduced: 3/29/23
• Refer: 3/29/23
• Refer: 4/10/23
• Report Pass: 4/24/23
• Engrossed: 4/27/23
• Refer: 5/1/23
• Report Pass: 5/23/23

Caption

Provides relative to expenditures utilized to claim income and franchise tax credits. (gov sig) (EG SEE FISC NOTE GF RV See Note)

Impact

The proposed law will be applicable to all taxable periods starting on or after January 1, 2023, marking a significant change in the tax credit landscape in Louisiana. The bill is designed to close loopholes that may have allowed for inappropriate or overlapping claiming of expenditures, which could put a strain on state finances. Additionally, the bill carves out exceptions for incentives managed by the Department of Economic Development, indicating that some areas of economic support may continue to operate independently from these new restrictions.

Summary

Senate Bill 79, introduced by Senator Luneau, aims to regulate the utilization of expenditures associated with income and corporation franchise tax credits in Louisiana. The bill specifically stipulates that expenditures claimed for these tax credits cannot be submitted or used to qualify for any other state credit, rebate, exemption, exclusion, or deduction. The intent of this provision is to prevent the multiple claiming of expenditures across different tax incentives, ensuring a more streamlined approach to tax credits within the state’s fiscal framework.

Sentiment

The sentiment surrounding SB 79 appears to be generally supportive among legislators, with the bill passing unanimously in the Senate with 33 votes in favor and no opposition. This bipartisan support suggests that the legislators recognize the importance of regulating tax credits to safeguard the state's revenue and prevent misuse. However, the bill does face potential contention concerning the implications for businesses that may rely on multiple overlapping tax credits as part of their financial strategy.

Contention

Although there seems to be broad support for the bill, its impact on businesses, particularly those utilized to claiming multiple credits, might be a point of contention. Critics may argue that the new restrictions could hinder economic development initiatives by making it more difficult for businesses to optimize their tax positions. Additionally, the exemption for the Department of Economic Development could raise questions about fairness and whether some businesses may receive more favorable treatment under the new regulations.