‘Tuesday at the Louisiana Legislature’

Tax-related measures on today’s legislative agenda:

Ways and Means. At adjournment in Committee Room 6. Agenda includes:

HB35 Provides for a sales and use tax exemption for sales of certain property to the “Make It Right Foundation”.
HB181 Provides with respect to filing, witness, and mileage fees associated with proceedings before the Tax Court and its small claims division.
HB223 Creates and provides for a Tax Court as an administrative agency in the office of the governor.
HB488 Prohibits the Dept. of Revenue from collecting tax on any transaction for which no clear intent to tax by the legislature exists unless the department promulgates a rule indicating its intention to do so.
HB503 Provides for the tax periods applicable to and amounts of tax credits for the new markets tax credit program.
HB508 Authorizes a state sales and use tax exemption for the purchase and installation of certain adaptive devices for persons with orthopedic disabilities.
HB600 Provides for an individual income tax exclusion for certain persons based on federal adjusted gross income.
HB606 Adds facilities supporting medical physicists residency programs to facilities eligible for the sales and use tax exemption for certain qualifying radiation therapy treatment centers.
HB615 Adds geothermal energy systems to systems eligible for the wind or solar energy systems tax credit.
HB616 Provides for changes to the exemption for ships and ships’ supplies.
HB618 Revises the definition of “hurricane recovery entity” for purposes of the individual income tax deduction for hurricane recovery benefits.
HB620 Excludes from state income taxation certain payments for lost wages and lost income as a result of the Gulf Oil Spill.
HB627 Provides for a sales and use tax exemption for purchases of certain construction and building materials pur-chased by or for NOLA Motorsports Park.


Report: ‘Senate committee advances tax rebate bill’

From the Advocate:

A state Senate panel Monday endorsed a tax rebate for private companies that work with state universities on commercial ventures.

Senate Bill 134 sponsored by state Sen. Dan Claitor, R-Baton Rouge, moves to the full Senate for debate.

The measure, backed by Gov. Bobby Jindal, would allow a rebate from Dec. 31, 2011, until Dec. 31, 2017.

Companies have been eligible for a refundable tax credit through the Technology Commercialization Credit and Jobs Program. The program will now offer the tax rebate instead.




'Commission to find ways to cut state government'

A legislatively-created panel intended to develop a plan for shrinking state government will hold its first meeting on July 27.

The first meeting is expected to be organizational and will elect officers and set a course for work.

The new law calls for the panel to make its initial report to lawmakers and the governor no later than Dec. 15. The commission must prepare its recommendations on reorganizing state government by Jan. 4. Legislative committees must review the plans for possible reorganization by Feb. 1 for possible action at next year’s legislative session.

The Commission on Streamlining Government is charged with examining each state agency’s activities, functions, programs, services, powers and responsibilities to determine which ones can be eliminated, streamlined, consolidated or possibly turned over to the private sector.


Governor Jindal Signs Tax Incentives Into Law

BATON ROUGE - Today, Governor Bobby Jindal announced that he signed nine tax incentive bills into law. Notably, he signed six tax incentives that will continue to make Louisiana more economically competitive, including HB 898 by Rep. Cameron Henry which increases the film production tax credit, HB 458 by Rep. Kirk Talbot which extends the sound recording production and infrastructure tax credit program, SB 277 by Sen. Ann Duplessis which extends and expands the Digital Interactive Media Tax Credit, HB 790 by Rep. Hunter Greene which extends the research and development tax credit, HB 110 by Rep. Jane Smith that provides a tax credit for clean burning motors, and HB 215 by Representatives Hutter, Leger, and Richmond that will create a cargo and infrastructure tax credit for Louisiana ports.

Governor Jindal said, “These tax incentives are critical tools to give Louisiana a bright economic future. By signing these bills, we’re ensuring that we not only have the ability to remain economically competitive, but that we can continue to move our state forward by making Louisiana the greatest place in the world to find a great paying job and raise a family.”

HB 898 by Rep. Cameron Henry is a Governor’s package bill that increases the film production tax credit from 25 percent to 30 percent and eliminates the phase-down of the tax credit program. Current phase out schedule for the film production credit (currently at 25 percent) is 20 percent on July 1, 2010, and then 15 percent on July 1, 2012.

HB 458 by Rep. Kirk Talbot is a Governor’s package bill that extends the sound recording production and infrastructure tax credit program by moving the program’s sunset provision to from 2010 to 2015 in order to stimulate long-term investment by the industry.

The Sound Recording Tax Credits provides credits for two purposes: production and infrastructure. For production there is a 25 percent refundable tax credit based on total in-state expenditures related to the production of a sound recording, and for infrastructure there is a 25 percent refundable tax credit based on total in-state expenditures for the development of sound recording studios.

SB 277 by Sen. Ann Duplessis is similar to Governor’s package bill HB 457, which extends and expands the Digital Interactive Media Tax Credit by permanently extending and increasing the credit by 5 percent creating a single rate of 25 percent of expenditures plus an additional 10 percent for Louisiana resident payroll expenditures (35 percent total credit for resident payroll). The bill also expands the definition of digital media to include technology companies.

HB 790 by Rep. Hunter Greene is similar to Governor’s package bill SB 108, which extends the research and development tax credit until December 31, 2013, and doubles the credit for small and emerging businesses with less than 50 employees. HB 790 also authorizes a taxpayer who receives a federal Small Business Innovation Research Grant to qualify for a tax credit equal to 40 percent of the award received during the taxable year. This is an increase in the current 20 percent credit.

HB 110 by Rep. Jane Smith provides a tax credit for the cost of qualified clean burning motor vehicle fuel property. Prior to the new law, a 20 percent tax credit was available for purchases of “clean burning motor property.” HB 110 will increase the tax credit to 50 percent of the investment and allow the credit to be refundable.

Moreover, prior to the bill for purchases of hybrid vehicles, the taxpayer could elect to take a credit of the lesser of two percent of the vehicle cost or $1,500. Now for purchases of hybrid vehicles, the taxpayer can elect to take a credit of the lesser of 10 percent of the vehicle cost or $3,000. The credit is also increased to 50 percent of the cost of delivery of alternative fuel including compression equipment, storage tanks and dispensing units.

HB 215 by Reps. Hutter, Leger, and Richmond will serve as a tool to help Louisiana ports enhance their competitiveness by creating a cargo and infrastructure tax credit for the state’s ports. The bill will specifically create the “Investor Tax Credit” which equals five percent per year of the total capital costs of a qualifying project and the “Import Export Credit” that relates to the individual income, corporate income, and corporate franchise tax liabilities of those who receive state certification.

Additionally, the Governor announced today he has signed the following tax incentive bills into law:

HB 189 – Rep. Greene

This bill provides for the sales tax exemption of meals furnished to the staff and students of educational institutions and other organizations.

HB 618 – Rep. Greene

This bill eliminates the $10 minimum corporate franchise tax.

SB 52 – Sen. Marionneaux

This bill authorizes an annual “sales tax holiday” for the purchase of firearms and supplies during the Second Amendment Weekend (first consecutive Friday-Sunday in September).


Report: 'States consider oil and gas levies'; Louisiana goes against the grain

The Wall Street Journal reports that Louisiana is bucking a national trend of states attempting to relieve budget shortfalls by increasing taxes on oil production.

Lawmakers in Pennsylvania and California have proposed what are known as severance taxes on oil and natural gas produced in their states. A tax increase took effect in Arkansas at the beginning of the year, and Alaska last year raised its oil-production tax.

Some lawmakers in Louisiana want to take the opposite tack, in a bid to attract more drilling. The state House of Representatives recently approved a package of tax cuts targeted at certain high-cost forms of oil and gas production. Democratic Rep. Nickie Monica, the lead sponsor of one measure in the package, said he hopes to give Louisiana a competitive advantage at a time when other states are raising taxes. “We’re bucking a national trend,” he said.

Mr. Monica’s bill has encountered resistance in the state Senate, however, where lawmakers are concerned about reduced tax revenue.


Report: 'House advances Chelsea's-friendly bill'

The Louisiana House of Representatives advanced a bill that would loosen state restrictions on restaurants that offer drink specials and late-night entertainment.

The measure came in response to actions by the Bureau of Alcohol & Tobacco Control regarding Chelsea’s Cafe, a restaurant in Baton Rouge.

Senate Bill 136 came in response to a January memo from state Alcohol Tobacco and Control chief Murphy Painter, which indicated that more than 5,000 restaurants could be violating the law.

Painter contends some restaurants turn into bars late at night and do not have the proper license.

Painter’s memo said that businesses operating under restaurant licenses that have bar in their name, offer alcoholic drink specials or implement cover charges for late night entertainment could no longer be considered a restaurant, said state Rep. Jeff Arnold, D-New Orleans.

Arnold said Painter was trying to change the definition of restaurant, which has been “clearly understood by all parties” for many years.

Restaurant licenses are easier to obtain than those that allow bars and entertainment venues to operate.

Chelsea’s Cafe in Baton Rouge ran afoul of Painter, who claimed the restaurant was turning into a bar at night. The restaurant has been fighting a license suspension.

SB136 defines what constitutes a restaurant, including that it must make more than 50 percent of its average monthly revenues in food and non-alcoholic beverage sales. It goes on to say that just because a restaurant has bar in its name, offers alcoholic drink specials or entertainment with a cover charge does not mean they are no longer a restaurant.

The bill has the backing of the Louisiana Restaurant Association. The House voted 68-31 in favor.


Report: 'Bill advances, would raise limit for cuts'

From The Advocate:

Legislation aimed at increasing the amount of cuts lawmakers can make in a deficit year and being able to make those cuts every year passed the Louisiana House on Monday.

Senate Bills 1 and 2, sponsored by Senate President Joel Chaisson II, D-Destrehan, withstood many questions as the Legislature came up against one of the deadlines for bill consideration.

SB1 is a proposed constitutional amendment that would allow up to 10 percent — rather than the current 5 percent — of each state statutory dedication to be cut when there is a budget deficit. Anything in excess of 5 percent would have to be approved by the Legislature.

If approved by a two-thirds vote of the Legislature, the state’s voters would have to concur in an October 2010 election.



Report: 'Tax amnesty expected'

From the Times-Picayune Briefing Book:

Tax amnesty expected

Delinquent taxpayers would have a two-month amnesty period to settle their overdue state tax bills with all the penalties and half the interest costs waived, under a bill backed by both the House and Senate. House Bill 720 is headed back to the House, which is expected to send it to a legislative compromise committee so lawmakers can decide how they want to spend the estimated $150 million or more that could be brought in during the amnesty period. Lawmakers are considering whether to use the money to plug budget holes and are questioning whether that’s possible, and Gov. Bobby Jindal’s administration is hoping to use a slice of the money for state debts related to Hurricanes Gustav and Ike. A similar tax amnesty program generated $193 million several years ago, said Sen. Rob Marionneaux, D-Livonia, who handled the proposal in the Senate. The tax amnesty period would fall sometime in the upcoming fiscal year that begins July 1, in a two-month period chosen by the state Department of Revenue, under the proposal by Rep. Jane Smith, R-Bossier City.


Editorial: 'Stretch funds for campuses'

An editorial in the Baton Rouge Advocate urges lawmakers to delay implementation of the expansion of an income tax deduction. The paper’s opinion staff says the state needs the revenue can relieve budget pressure on Louisiana’s institutions of higher learning.

The Baton Rouge Area Chamber is hardly alone in looking down the road and seeing potentially harder times for state colleges and universities. But the chamber deserves credit for tackling the politically sensitive issue head-on, calling for a delay in a scheduled tax cut for three years while the impact of revenue declines can be assessed.

We need more common-sense leadership in this crisis than we’ve been getting from elected officials, from Gov. Bobby Jindal on down. Endless bleating that delaying a tax cut amounts to a tax increase is not only transparently false but ignores the obvious: Legislators phased in the tax cut, and it should properly be reassessed in light of the decline in state revenue.

The chamber’s program for the future includes not only a tough-minded approach to recurring revenue but greater authority for colleges to raise tuition and fees without periodically crawling to the State Capitol for a two-thirds vote of the Legislature.

Read more.


Report: 'Showdown on cigarette taxes, unemployment benefits today at Capitol'

The Times-Picayune’s Jan Moller previews the action expected Monday in the legislature.

As ever, the question is, “how to fund state government?”

By the time the House adjourns this evening, one of the following will almost certainly be true:
a) The (not so) great tax debate of 2009 will be pretty much done with after House Bill 889, which would raise cigarette taxes by 50 cents a pack, fails to get the 70 votes needed to send it to the Senate.

- Or -

b) The debate will be very much alive after the bill by Speaker Pro Tem Karen Carter Peterson, D-New Orleans, goes to the Senate with enough votes to override an expected veto from Gov. Bobby Jindal.

While most of the smart money is on option (a), the smart money hasn’t always been right this session, as everyone learned Thursday when the House unexpectedly ratified the Senate’s version of the $28.7 billion state budget and threw the state spending picture into the kind of disarray we haven’t seen for several years around the Capitol.