Louisiana’s 2023 Regular Legislative Session has officially adjourned sine die.
At the outset of this year’s fiscal session, legislators introduced numerous measures aimed at implementing significant tax reform. These initial proposals included the elimination of the individual income tax, the gradual reduction or phasing out of corporate income and franchise taxes, the termination of the inventory tax, a reduction of the temporary 0.45% state sales tax rate, and other related measures. However, with it being an election year and with the legislature’s focus centered around state budget discussions, several of these tax proposals were met with concerns over their fiscal impact and struggled to maintain enough momentum to make it to the finish line.
The tax measures that did manage to pass included a package of bills authored by Senator Brett Allain, Chairman of Senate Revenue and Fiscal Affairs Committee. SB 1 modifies current provisions in law pertaining to the reduction of the corporate franchise tax and provides that the tax will be reduced over a six-year period by 25% in each year that certain revenue collection thresholds are met. The bill’s tied legislation, SB 6, will reduce the capital expenditure and sales tax rebate portions of Louisiana’s Quality Jobs Program up to 50% as a “pay for” for any potential reduction of the corporate franchise tax.
Advantous’ team of state and local tax experts actively tracked all key tax-related measures introduced during Louisiana’s 2023 Regular Session on behalf of our clients, partners, and stakeholders. The following is a summary of all key tax measures that were passed:
Income & Franchise Tax
SB 1 (Allain) – For franchise tax periods beginning on or after Jan. 1, 2025 and before Jan. 1, 2031, reduces the corporate franchise tax by 25% in years when corporate income and franchise tax collections exceed $600 million deposited into the Revenue Stabilization Fund. (Tied to SB 6)
SB 6 (Allain) – For advance notifications for LA’s Quality Jobs Program filed after Dec. 31, 2023, reduces the project facility expense rebate (PFER) and sales tax rebate portions of LA’s Quality Jobs Program by one-half of the percentage of any corporate franchise tax reduction. (Tied to SB 1)
SB 3 (Allain) – Changes the month for the annual determination of the individual income and corporate franchise tax automatic rate reduction triggers from April 1st to Jan. 1st of each year. (Effective Aug. 1, 2023)
Act 430 (Nelson) – Repeals the throwout rule for corporate income tax apportionment purposes, eliminating the requirement that a sale be excluded from the numerator and the denominator when calculating the sales factor if the taxpayer is not taxable in a state to which a sale is assigned or if the state of assignment cannot be determined or reasonably approximated. – Previously HB 631**
HB 428 (Pressly) – Extends to estates, trusts, and partnerships the flow-through entity income exclusion allowed to individuals and provides for conditions and requirements relative to the exclusion. (Applicable to tax periods beginning on or after Jan. 1, 2023)
Act 242 (Stine) – Relative to the individual income tax deduction for net capital gains income, requires the LA Dep. of Revenue (LDR) to promulgate regulations that provide for certain documentation and eligibility requirements. (Effective Aug. 1, 2023; Applicable to tax periods beginning on or after Jan. 1, 2023) – Previously SB 89**
Act 262 (Talbot) – Authorizes a taxpayer claiming the construction code retrofitting deduction to additionally receive a grant through the Louisiana Fortify Homes Program. (Applicable to tax periods beginning on or after Jan. 1, 2023) – Previously SB 183**
Act 434 (Allain) – Prospectively and retroactively increases an individual income taxpayer’s federal tax liability for purposes of the federal income tax deduction by the amount by which the taxpayer’s federal income tax was reduced by claiming disaster losses attributable to Hurricane Ida for taxable periods beginning on Jan. 1, 2020, through Dec. 31, 2021. – Previously SB 230**
Act 432 (Foil) – Adds provisions to existing law that exempt LLCs filing as a real estate investment trust (REIT) from corporate franchise tax if 100% of its common stock is owned by a tax-exempt organization. – Previously SB 9**
Act 239 (Stine) – Provides for an income tax check-off pursuant to which an individual can donate all or a portion of his state income tax refund to Holden’s Hope in lieu of that amount being paid as a refund. (Effective Aug. 1, 2023; Applicable to taxable years beginning on and after Jan. 1, 2023) – Previously SB 61**
Sales & Use Tax
Act 15 (Beaullieu) – Repeals the 200-transaction threshold used to determine if marketplace facilitators are required to collect and remit sales and use taxes on remote transactions. – Previously HB 171**
Act 375 (Beaullieu) – Moves responsibility for the management and supervision of the uniform electronic local return and remittance system from LA Dep. of Revenue (LDR) to the Louisiana Uniform Local Sales Tax Board (ULSTB). Additionally requires the ULSTB to design and implement a single remittance system whereby each taxpayer can remit state and local sales and use taxes through a single transaction. (Effective Jan. 1, 2024) – Previously HB 558**
Act 21 (Miller) – Requires extension of the deadline to pay local sales and use taxes when the deadline for payment of the tax falls on certain holidays. – Previously HB 256**
Act 382 (Beaullieu) – Expands the local sales and use tax exemption for the procurement and administration of prescription drugs administered in medical clinics by infusion or injection to include drugs administered by topical system in medical clinics. – Previously HB 629**
Act 62 (Kerner) – Mandates a local sales and use tax exemption for purchases by commercial fishermen and certain seafood processing facilities that own or lease commercial fishing vessels. – Previously HB 161**
Act 425 (Johnson) – Establishes a state and local sales and use tax exemption for the purchase of certain agricultural fencing materials by commercial farmers. Repeals a state sales tax rebate for purchases by commercial farmers of agricultural fencing materials used to replace or repair enclosures in federally declared disaster areas that were damaged or destroyed by hurricanes in 2020 or 2021. – Previously HB 330**
Act 427 (McFarland) – Modifies the definition of the term commercial farmer by removing certain reporting requirements applicable to entities seeking to qualify as commercial farmers for purposes of claiming an available state sales and use tax exemption. – Previously HB 502**
Act 396 (Duplessis) – Relative to the sales and use tax exemption for the sales of original, one-of-a-kind works of art, includes “digital art” in the definition of “works of art.” (Applicable to tax periods beginning on or after July 1, 2023) – Previously SB 227**
Act 414 (Hollis) – Increases the excise tax rate on vapor products and electronic cigarettes and dedicates a portion of the avails of such increase to payment of salaries and related benefits for LA State Police, Dept. of Wildlife and Fisheries enforcement agents, and employees of the office of state fire marshal. (Effective July 1, 2023) – Previously HB 635**
Act 77 (Turner) – Provides for the allowable uses of state sales tax increments in tax increment financing arrangements for local economic development projects. – Previously HB 285**
Act 429 (Landry) – Includes the sale of admissions to any museum that has as its primary purpose the showcasing of LA music and which opened to the public on or after Jan. 1, 2026 in the definition for the term “sales of services.” – Previously HB 619**
Act 274 (DeVillier) – Authorizes the governing authority of the city of Eunice to levy and collect a hotel occupancy tax at a rate not to exceed 2%, subject to voter approval. (Effective July 1, 2023) – Previously HB 355**
Act 248 (Pope) – Authorizes the governing authority of the city of Denham Springs, subject to voter approval, to levy and collect a hotel occupancy tax. – Previously SB 225**
Act 352 (Freiberg) – Authorizes the governing authority of the city of Baton Rouge and the parish of East Baton Rouge to rebate revenue from sales and use taxes collected on the sale of admission tickets to an event that meets certain criteria. – Previously HB 450**
Act 255 (Harris) – Extends the sunset date for the Louisiana Tax Free Shopping Program until July 1, 2024. – Previously SB 118**
Act 288 (Cathey) – Reinstates the Second Amendment sales tax holiday. (Effective July 1, 2023) – Previously SB 56**
Property Tax
HR 75 (Bourriaque) – Urges and requests the La. Tax Commission (LTC), the LA Assessors’ Association, and the Police Jury Association of LA, jointly, to study the process for taxpayer appeals of property assessments at the parish level. Requests that a report of findings of the study be submitted to the House Committee on Ways and Means on or before Feb. 1, 2024.
Act 161 (Adams) – Authorizes the LA Tax Commission (LTC) to convey certain current-year property tax assessment information and requires the LTC to provide certain historical information to any taxpayer upon request. – Previously HB 279**
Act 48 (Hughes) – (CONSTITUTIONAL AMENDMENT) Allows for denial of a property tax exemption for property owned by a non-profit corporation or association and leased as housing if the property is found by a local governing authority to be in such a state of disrepair that it endangers public health or safety. (Election: Oct. 14, 2023; Applicable to all tax years beginning on or after Jan. 1, 2024) – Previously HB 46**
Act 355 (Hilferty) – Provides for a property tax exemption for certain veterans with disabilities. (Applicable to property tax due beginning in tax 2023, regardless of when property tax assessment rolls are completed for tax year 2023) – Previously HB 500**
Act 179 (Duplessis) – (CONSTITUTIONAL AMENDMENT) Authorizes a parish governing authority to approve a property tax exemption of up to $2,500 of the assessed valuation of property receiving the homestead exemption that is owned and occupied by a qualified first responder. (Election Oct. 14, 2023) – Previously SB 127**
Act 361 (Moore) – Authorizes the Monroe City School Board to levy a property tax to fund early childhood care and education. – Previously HB 56**
Tax Credits & Incentives
Act 413 (Willard) – Limits the credit for taxes paid to other states to taxes paid and reported to the other state on taxable income which is computed in accordance with income tax laws and regulations of the other state. – Previously HB 618**
Act 251 (Foil) – Extends the sunset of the research and development tax credit from Dec. 31, 2025, to Dec. 31, 2029. – Previously SB 69**
Act 253 (Harris) – Relative to the Angel Investor Tax Credit Program, extends the sunset date of the program to July 1, 2030 and removes meeting requirements and applicable federal eligibility regulations. (Applicable to tax periods beginning on or after Jan. 1, 2024) – Previously SB 108**
Act 350 (Willard) – Relative to the Research and Development tax credit, exempts certain credit recipients from detailed examinations by the Dept. of Economic Development (LED), and authorizes certain taxpayers to receive incentives from multiple programs. (Applicable to tax years beginning on or after Jan. 1, 2023) – Previously HB 408**
Act 426 (Magee) – Extends the duration of the rehabilitation of historic structures tax credit program and expands eligibility requirements for the program. – Previously HB 483**
Act 411 (Schexnayder) – Extends the sunset date for the Motion Picture Production tax credit to July 1, 2031 and provides for credit eligibility, promotional graphic requirements, expenditure data collection, and issuance cap changes. – Previously HB 562**
Act 433 (Reese) – Relative to the LA New Markets Job Act tax credit, modifies the definition for “rural parish” and further provides for investment requirements for tax credit eligibility. – Previously SB 151**
Act 116 (Hughes) – Extends the termination date of the tobacco tax exemption for cigars and pipe tobacco products sampled at the Premium Cigar Association convention from Dec. 31, 2025 to Dec. 31, 2030. (Applicable to tax periods beginning on or after Jan. 1, 2013) – Previously HB 111**
Act 403 (Landry) – Provides for a non-refundable income tax credit for individuals who purchase firearm safety devices. (Applicable to tax periods beginning on or after Jan. 1, 2023) – Previously HB 247**
Act 310 (Glover) – Authorizes certain investments by businesses issuing life insurance policies to be eligible for the insurance premium tax credit. (Effective Jan. 1, 2024) – Previously HB 411**
Act 428 (Magee) – Authorizes an insurance premium tax credit for retaliatory taxes paid to any other state by a.LA domestic insurer which is authorized to write and does write insurance in LA and in at least one other state. – Previously HB 513**
Act 423 (Schlegel) – Increases the maximum amount of the individual income tax deductions for elementary and secondary tuition, educational expenses for home-schooled children, and educational expenses for a quality public education from $5,000 to $6,000 per student, per year. (Applicable to amounts paid on or after Jan. 1, 2024) – Previously HB 32**
Act 404 (Landry) – Establishes a tax credit against LA income tax for restaurants that donate oyster shells to approved oyster shell recycling programs or activities. (Applies to taxable periods beginning on or after Jan. 1, 2024) – Previously HB 255**
HB 443 (Edmonds) – Authorizes a refundable income tax credit of $5,000 for a taxpayer who adopts a child who is unrelated to the taxpayer and who is less than 18 years of age. (Applicable to adoptions finalized on or after Jan. 1, 2023; Effective upon signature of Governor)
SB 41 (Mizell) – Establishes a tax credit for certain maternal wellness centers beginning Jan. 1, 2025 through Dec. 31, 2030. (Effective Aug. 1, 2023)
Severance Tax
Act 431 (McFarland) – Provides for eligibility for a severance tax exemption for production of natural gas, gas condensate, and oil from any well drilled to a depth of more than 15,000 feet. – Previously HB 634**
Appeals & Disputes
Act 249 (Luneau) – Changes the interest rate applicable to refunds of local sales and use taxes due to taxpayers prevailing in a payment under protest suit to the judicial interest rate set published annually in the Dec. edition of the LA Register. Additionally, eliminates the requirement that a taxpayer in a payment under protest suit for local sales and use taxes pay additional interest beyond the interest already paid under protest when the collector prevails. (Effective Aug. 1, 2023) – Previously SB 8**
Act 284 (Allain) – Provides for alternatives in lieu of payment under protest for challenges to ad valorem tax assessments. Taxpayers challenging the correctness of an assessment who have timely appealed to the Louisiana Tax Commission (LTC) will not be required to pay the disputed taxes under protest as a condition of the appeal. Taxpayers appealing an adverse LTC ruling to a court or the Louisiana Board of Tax Appeals (BTA) may petition the court or BTA to post a bond or other security in lieu of paying the disputed tax amounts under protest. (Effective Aug. 1, 2023) – Previously SB 5**
Act 289 (Connick) – Relative to the assessment of taxes by the LA Dep. of Revenue (LDR), requires the LDR Secretary to send a notice by First-Class Mail International with Electronic USPS Delivery Confirmation if the notice is mailed internationally and specifies that a taxpayer has the right to pay an assessment under protest within 30 calendar days from the date of notice receipt. – Previously SB 75**
Miscellaneous
HCR 55 (Firment) – Memorializes the U.S. Congress to pass the Emergency Savings Accounts Act of 2023 or any similar legislation allowing taxpayers to establish tax-advantaged savings accounts for disaster-related expenses.
**All bills with Act numbers have been signed by Governor Edwards
For more information on Louisiana’s 2023 Regular Session or to schedule a personalized post-session tax update with our team of state and local tax experts, please contact Advantous’ Policy and Legislative Affairs Specialist, Mary Robinson.