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Louisiana House Panel Advances COVID-19 Business Tax Relief Bills 

Posted on June 11, 2020

Bills that would provide tax relief to businesses to help aid in their recovery from the COVID-19 pandemic are advancing in the Louisiana House of Representatives.

The House Ways and Means Committee on June 10 advanced several measures, based on recommendations from the Louisiana Economic Recovery Task Force.

H.B. 11, sponsored by committee Vice Chair John Stefanski (R), was reported favorably on a vote of 13 to 1. The bill would change compensation for vendors that collect and remit sales and use taxes by allowing dealers to keep 1.1 percent of the total amount of taxes due. Existing law allows them to keep 0.935 percent.

“This is a way to directly infuse cash into those small businesses that will allow them some more of that money,” Stefanski said during the committee hearing. “This is targeted, in my opinion, to the small guys.”

In June 9 testimony on H.B. 11, Revenue Secretary Kimberly L. Robinson said the vendor’s compensation for retailers who collect sales tax was changed in 2016 to put the current cap in place. The change was made as a cost-saving measure to reduce the state’s billion-dollar deficit, she said.

“We recognize that the state does have to do its part to help small business, but changing the tax structure that we did put in place to get the stability and keep the state on a stable footing was not one of the things we envisioned doing in this special session. Vendor’s compensation is one of the things I think we reached a level playing field with,” Robinson said.

H.B. 23, sponsored by Rep. Stephen Dwight (R), was reported favorably on a 13–0 vote. The bill would hold a referendum on whether to change payment in lieu of tax (PILOT) agreements.

“What we’re trying to do is allow all commercial businesses to enter into some type of cooperative endeavor agreement with the parishes for some type of payment in lieu of taxes,” Dwight said. The bill is also "trying to have one person or entity be the person that they go to negotiate with.”

Dwight said the difference between this bill and the PILOT bills introduced in the previous session is that H.B. 23 would “open it up to all commercial businesses, not just manufacturing businesses.”

“It offers upfront payment by waiving some of the property taxes in the future — up to nine years,” Dwight added.

H.B. 37, introduced by Rep. Lance Harris (R), was reported favorably 14 to 0 with amendments. The bill would direct the Department of Revenue to waive all penalties and interest imposed for late individual, corporate, fiduciary, or partnership tax returns and payments due for tax years 2019 and 2020.

The waiver would apply only to taxpayers whose health was affected by COVID-19, or taxpayers who relied on a third-party provider for tax filing services that was affected by the virus.

Other tax bills approved by the committee are H.B. 14, H.B. 17, H.B. 13, and H.B. 19.

H.B. 14, introduced by Speaker Clay Schexnayder (R), would hold a referendum on whether local sales and use taxes should be collected by the state rather than local governments; the committee voted 16 to 0 for the measure.

H.B. 17, sponsored by Ways and Means Chair Stuart J. Bishop (R), was reported favorably on a vote of 11 to 5. The bill would extend the temporary suspension of the capital stock tax, known as the corporation franchise tax, for tax periods beginning between July 1, 2020, and June 30, 2024. 

H.B. 13, sponsored by Rep. Mark Wright (R), would allow hotels, restaurants, and retailers to participate in enterprise zone incentives. It was reported favorably on a vote of 11 to 6.

Robinson said hotels and retailers had been removed from the enterprise zone program because those companies make location decisions based on population, traffic that comes through an area, and other factors that aren’t based on incentives. “The economic development professionals prefer not to use economic development incentives to attract retail,” she explained.

H.B. 19, sponsored by Rep. Thomas A. Pressly (R), was reported favorably on an 11–2 vote. The bill would change requirements for the quality jobs program to allow incentives for retailers, hotels, and restaurants.

Meanwhile, consideration of legislation to provide a temporary five-year carryback for net operating losses (H.B. 25, sponsored by Wright) was postponed. After Stefanski expressed concerns about the cost of the bill’s fiscal note, Wright voluntarily deferred the bill, which will be heard again on June 11.

Louisiana Economic Recovery Task Force Chair Jason DeCuir said, “there are a number of ways we would be open to temper this note if that’s what [you all] want to do.”

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