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La. Legislature OKs Biz Tax Breaks Expansion Amid Virus

By Asha Glover · 2020-06-30 20:24:06 -0400

The Louisiana Legislature approved two bills that would expand state tax incentive programs to retailers, restaurants and hotels to help them recover from the COVID-19 pandemic, along with a bill to provide tax credits for investments in opportunity zones.

On Monday the Louisiana House passed H.B. 13 and H.B. 19, which seek to allow the state's retail, food service and hospitality sectors to participate in existing job-creation tax incentive programs available to other industries. The House also unanimously passed S.B. 24, which extends program applications for the state's Angel Investor Tax Credit Program through fiscal year 2025.

The Senate had passed H.B. 13 on Sunday and H.B. 19 on Monday, and it had passed S.B. 24 on June 23. All three measures will now go to Democratic Gov. John Bel Edwards for his consideration.

Rep. Sam L. Jenkins Jr., D-Shreveport, who voted for the two tax incentive bills during their final passage but did not vote for either House bill when originally passed, told Law360 that he had concerns with both bills in their original form.

Jenkins said that amendments passed in the Senate influenced him to change his vote, including an amendment to H.B. 19 that limits the relief to businesses that have no more than 50 employees nationwide, including affiliates. Another amendment specifies that the relief is available for pandemic.

"I believe the programs should help local small businesses," Jenkins said.

H.B. 19, which passed the House by 90 to 6, offers to make those industries eligible for the state's Quality Jobs Program. That program allows payroll subsidies for qualifying businesses that create new jobs that pay at least $18 an hour, as well as a sales tax rebate or 1.5% refundable credit similar to that of the Enterprise Zone program. Both bills would allow restaurants, retailers and hotels to enter into the programs between July 1 and Dec. 31, 2021, with the benefits awarded to them through June 30, 2025.

H.B. 13, passed by the House on an 89-to-9 vote, would allow retailers, restaurants and hotels to participate in Louisiana's Enterprise Zone incentive, which offers one-time tax credits of $1,000 or $3,500 per qualifying job created in designated areas. The program also offers a choice of a sales tax rebate on qualifying expenditures or a 1.5% refundable credit on qualifying capital expenditures, according to a fiscal note on the bill.

If signed, both H.B. 13 and H.B. 19 would go into effect July 1.

Under S.B. 24, the state's Angel Investor Tax Credit Program would be expanded to offer an enhanced 35% credit for investments in businesses within federal opportunity zones established by the 2017 Tax Cuts and Jobs Act . Under the current law, the credit is for 25% of eligible investments for applications received before July 1, 2021, according to a fiscal note.

The program's enhanced and non-enhanced credits can be spread over two years, and the annual program credit award cap would increase to $7.2 million from $3.6 million, according to a fiscal note. The measure would go into effect with Edwards' signature.

Edwards and several state lawmakers did not immediately respond to requests for comment Tuesday.

--Editing by John Oudens.

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