Louisiana lawmakers pass tax breaks as virus recovery effort
AP

Louisiana lawmakers pass tax breaks as virus recovery effort

  • 0
{{featured_button_text}}

BATON ROUGE, La. (AP) — In their special session that ended Tuesday, Louisiana lawmakers agreed to expand and extend business tax credits, exemptions and incentive programs, bills that were pitched as a coronavirus recovery tactic and are estimated to siphon millions from the treasury each year.

Supporters said the measures would help businesses struggling with closures and restrictions mandated by Gov. John Bel Edwards in response to the virus outbreak.

“We have to take care of the businesses that employ people that provides them the income to be able to move forward,” said Sen. Barry Milligan, a Republican from Shreveport. “The more businesses we lose, the more paychecks we lose, the more of our tax base we lose.”

Critics said the approach was haphazard, involved too little study and could worsen the state's budget problems from the virus.

“We know we have fiscal woes ahead,” said Sen. Karen Carter Peterson, a New Orleans Democrat.

Sen. Jay Morris, a Monroe Republican, cautioned his colleagues: “It’s easy to give away. It’s hard to take back.”

The Democratic governor wouldn't say Tuesday evening which measures he will support. He said he worried about the impact on the state's budget and needed to review what the cost of the tax breaks would be.

The bills would cost about $25 million in the budget year that begins Wednesday, according to financial estimates. But in some instances, the financial impact of the bills is not entirely clear — and some of the proposals are back-loaded, so they will cost tens of millions more in later years. The tax breaks, with extensions included, are estimated to total at least $230 million in lost tax collections over five years, but could cost much more, according to nonpartisan bill analyses.

Republicans criticized the financial estimates, suggesting the state will reap tax revenue by stimulating the economy.

One of the largest tax breaks, starting at $11 million in the first year and growing annually, would benefit the state’s gambling industry.

Lawmakers passed bills that would:

—Extend Louisiana's expiring historic tax credit program another four years, to expenses incurred before mid-2026. Lawmakers added a spending cap on the program for applications submitted after July 1.

—Allow businesses required to collect and remit sales taxes to keep a larger portion of those tax collections for themselves.

—Broaden a tax credit program for businesses that create jobs in certain underserved areas deemed Enterprise Zones to allow retailers, restaurants, bars and hotels to participate if they have no more than 50 workers. The expansion would end in mid-2023.

—Expand a payroll subsidy program for certain businesses that offer higher-paying jobs and health benefits to virus-impacted retailers, restaurants, bars and hotels if they have no more than 50 workers. The expansion would end in mid-2023.

—Renew an expiring tax credit program for certain research and development expenses for another four years.

—Deduct from the taxes owed by riverboat casinos, the land-based casino in New Orleans and slot machines at Louisiana’s racetracks some of the money given to gamblers through promotional play wagers.

—Suspend part of the corporate franchise tax for one year.

—Restart an expired program that provides state tax credits for investments in low-income communities through the federal New Markets Tax Credit Program. A total of $45 million in credits could be claimed over four years, starting in the 2023-24 budget year.

—Extend the Angel Investor tax credit program for start-up businesses through mid-2025 and increase the credit for business investments located in federal “Opportunity Zone” neighborhoods.

———

Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Concerned about COVID-19?

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

  • Updated

WASHINGTON (AP) — President Donald Trump wore a mask during a visit to a military hospital on Saturday, the first time the president has been seen in public with the type of facial covering recommended by health officials as a precaution against spreading or becoming infected by the novel coronavirus.

  • Updated

WASHINGTON (AP) — Lt. Col. Alexander Vindman, a national security aide who played a central role in President Donald Trump's impeachment case, announced his retirement from the Army on Wednesday in a scathing statement that accused the president of running a “campaign of bullying, intimidation, and retaliation.”

  • Updated

LOS ANGELES (AP) — Los Angeles Apparel, one of the largest garment makers in the city, was ordered to remain closed after four employees died and more than 300 tested positive for the coronavirus, Los Angeles County health officials announced Friday.

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News