Thursday, June 20, 2024

House committee advances tax break proposals

by BIZ Magazine

By David Jacobs | The Center Square

A Louisiana House of Representatives committee on Monday advanced several tax breaks and incentives, including one tied to a constitutional amendment voters will consider next month.

House Bill 78 by Rep. Beau Beaullieu, a New Iberia Republican, would create a PILOT incentive program. The acronym stands for “payments in lieu of taxes.”

The law would allow permits for one or more political subdivisions to grant a manufacturer future tax credits for nine years in exchange for up to two years of property tax payments within a PILOT agreement. Such agreements currently aren’t allowed when property taxes are involved, though a proposed constitutional amendment would change that.

“It’s another tool in the toolbox for economic development, folks,” Beaullieu said.

Critics argued Louisiana gives out too many corporate tax breaks already, forcing other taxpayers to shoulder more of the burden of paying for government services. Rep. Marcus Bryant, a St. Martinville Democrat, said he had decided to support the bill after conversations with local government officials.

“I’m a taxpayer,” said Edgar Cage with Together Louisiana, which often opposes tax breaks. “I would suggest you talk to your constituents, not the parish governments.”

Together Louisiana also spoke out against House Bill 29, which would suspend severance taxes on completed or enhanced oil wells for up to two years or until the owner recovers the cost of the well, whichever happens first. The program would last through 2025.

Supporters said it would create jobs at a time when the oil industry is battered by low prices and the COVID-19-related recession.

“We have a lot of service providers who just are not working,” said Rep. Phillip DeVillier, a Eunice Republican.

The Legislative Fiscal Office estimates the program would cost state finances about $157 million over five years. Rep. John Stefanski, R-Crowley, said he doubted state government would lose money because the program would incentivize work that isn’t already happening.

Other bills the House Ways and Means Committee advanced Monday include:

House Bill 20: Would provide an income tax break of up to $5,000 for parents who transferred their children during the COVID-19 pandemic from a public school that didn’t have in-person learning to a private school that did, or who hired a tutor to help with online learning. Fiscal Office staff said they cannot estimate the cost because they don’t know how widely it will be used.

House Bill 25 and Senate Bill 14: Would allow businesses that are in designated Hurricane Laura “recovery zones” to use the Louisiana New Markets Jobs Act tax credit program, which normally is reserved for businesses in low-income communities. The total value of the program would remain capped at $41.25 million.

House Bill 26: Would establish a state sales tax holiday for this year only on Nov. 21 and 22.

The Fiscal Office predicts taxpayers would save a total of about $4.5 million.

House Bill 30: Would establishe an incentive rebate of up to 10 percent of new payroll for qualified businesses and either a state sales tax rebate for capital expenditures for facilities or a project facility expense rebate for businesses that “re-shore” jobs, services, production, research or manufacturing to Louisiana from overseas. The Fiscal Office says there is no way to predict how much the program would be used.

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