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Louisiana Tax Bills Await Governor's Action

Posted on July 7, 2020

Bills that would provide tax relief to businesses and some workers amid the COVID-19 pandemic were passed during Louisiana's special session and await action from Gov. John Bel Edwards (D). 

S.B. 24, sponsored by Senate Finance Committee member Jimmy Harris (D), passed the House June 29 on a vote of 98 to 0, after clearing the Senate June 23 on a 36–1 vote.

The bill would make investments in some businesses in federal Opportunity Zones eligible for an enhanced version of the state’s angel investor tax credit. The current credit is 25 percent of a qualifying investment, but the enhanced credit would allow a 35 percent income or corporate franchise tax credit on investments in Louisiana small businesses that are certified by Louisiana Economic Development as "Louisiana Entrepreneurial Businesses,” according to the bill’s digest.

The bill would extend the sunset of the credit program from July 1, 2021, to July 1, 2025. It would alter the terms of both types of the credit from the authorized percent of the investment amount divided into equal portions over three years to the same calculation's result divided into equal amounts over two years.

The entire angel investor tax credit program would be capped at $7.2 million per calendar year, of which $3.6 million per year would be for the enhanced credit.

The Legislature also passed H.B. 69, sponsored by Rep. Daryl Deshotel (R), which would provide a tax break to winning bidders of census blocks in the federal Rural Digital Opportunity Fund Auction, an initiative of the Federal Communications Commission to expand broadband internet access to underserved rural areas.

The bill would provide those businesses a rebate on 50 percent of state and local sales and use taxes paid on fiber optic cable equipment. It would reduce state revenues by an unknown amount, according to the bill’s fiscal note.

H.B. 37, sponsored by Rep. Lance Harris (R), was approved the House 97 to 0 on June 25, after the Senate amended and passed it June 23 on a 36–0 vote.

The bill would require the Department of Revenue to waive all penalties and interest for late tax returns and late payments on taxes due in or for 2019 and 2020 if the original due date was between March 11, 2020, and July 15, 2020. The waiver would apply only to taxpayers diagnosed with COVID-19 or those who used a tax return preparer diagnosed with COVID-19 on or after March 11 and on or before July 15, and would not apply to any tax return filed or tax payment submitted after November 15, 2020.

The bill is expected to reduce state revenues, depending on the number of taxpayers and return preparers who are affected by the disease, according to the bill’s fiscal note.

The Legislature also passed a one-time tax rebate for essential workers who are responding to the COVID-19 pandemic, such as medical residents, nurses, and home healthcare workers. 

H.B. 70, sponsored by Rep. Samuel L. Jenkins Jr. (D), passed the House June 29 by a vote of 97 to 0, after passing the Senate June 26 with amendments by a vote of 38 to 0.

The bill would amend eligibility requirements for the state’s Enterprise Zone program, which provides businesses that create jobs with refundable income and franchise tax credits or state and local sales and use tax rebate payments.

Under the bill, a one-time hazard pay rebate of $250 would be available for “essential critical infrastructure workers” who reported earnings of $50,000 or less on their 2019 tax return. The rebates would be capped at $50 million.

The Legislature also passed a bill (S.B. 6) to suspend part of the state's corporation franchise tax for one year and another bill (H.B. 64) that would tax the net revenue of fantasy sports contests. 

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