Louisiana's legislators have called a special session that will allow them to continue working on tax legislation after this year’s regular session was disrupted by the COVID-19 pandemic.
Under a May 22 proclamation, lawmakers will convene a 30-day session immediately after the June 1 ending of the regular session.
Under the proclamation, legislators will be limited to addressing 41 items, including the suspension of corporate franchise taxes, fantasy sports taxation, the administration and collection of sales taxes, and state and local tax return filing extensions.
Lawmakers can also address changes to the carryback provisions of the corporate income tax deduction for net operating losses under the federal Coronavirus Aid, Relief, and Economic Security Act, as requested under H.C.R. 76. The resolution was introduced in early May and was approved by both chambers.
Legislation introduced during the 2020 regular session can’t be carried over into the extraordinary session, House Communications Office Director Cory Stewart told Tax Notes May 27. The bills would have to be reintroduced during the special session to be considered.
A House concurrent resolution (H.C.R. 66) addressing corporate franchise taxes was introduced during the regular session. The resolution, introduced by House Ways and Means Committee Chair Stuart Bishop (R), was adopted by the House May 18 and was on its final reading in the Senate May 27.
The measure would temporarily suspend the lower tier of the corporation franchise tax on domestic and foreign corporations as well as the initial tax on business entities subject to the tax. The lower tier of the tax is $1.50 per $1,000 on the first $300,000 of taxable capital. The suspension would apply to franchise tax periods beginning between July 1, 2020 and June 30, 2021.
If the measure is adopted, the suspension would be effective until the 60th day after final adjournment of the 2021 regular legislative session.
During the extraordinary session, legislators can also change the eligibility for several tax credits including the new markets jobs tax credit, the angel investor tax credit, and the research and development tax credit, according to the proclamation.