Update on Proposed Tax Bills: There is strength in numbers!
Thursday, June 4, 2015
Posted by: Ann Lupo
June 4, 2015
Thank you for contacting your legislators last week regarding the troubling effective date language contained in several tax-related bills that are moving through the legislature. Your efforts resulted in positive action taken in the Senate Finance Committee. Although we didn’t get the best possible solution, we did get some relief through amendments in three of the five problematic bills that will mitigate the impact on the taxpayer.
In HB 629 for example, the statement:
“The provisions of this Act shall apply to all claims for credits on any return filed on or after July 1, 2015, regardless of the taxable year to which the return relates.”
was supplemented with an amendment that states:
“The provisions of this Act shall apply to all claims for credits on any return filed or any transfers to a state agency, on or after July 1, 2015, regardless of the taxable year to which the return or the production to which the transfer relates.
However, any claim for a credit not allowed by the provisions of this Act on a return filed after July 1, 2015, pursuant to an extension of time to file granted prior to July 1, 2015, shall be allowed in the following manner. One-third of any such credit not allowed by the provisions of this Act may be taken as a credit against tax only in each of the taxpayer's tax years beginning during calendar years 2017, 2018, and 2019.”
We have been informed that the 2017–2019 time frame is necessary because it would not require adjustment to the fiscal notes associated with these bills that are an integral part of the proposed budget.
The three bills receiving the amendment were HB 402, HB 624 and HB 629. HB 218 and HB 805 still have the challenging language. All of these bills passed unanimously out of the Senate Finance Committee over the last two evenings and are headed to the Senate Floor.
The aforementioned amendments do not address prior year amended returns. We are working on another amendment that will hopefully be added on the Senate floor to address this problem.
Here are details on the specific bills:
HB 218 – Broadwater
This bill eliminates the NOL carryback election and adds five years to the NOL carry forward. This bill WAS NOT AMENDED. Therefore, any tax return that contains an NOL MUST BE FILED on or before June 30, 2015, to preserve the carry back treatment.
HB 402 – Stokes
This bill adds requirements for eligibility for the income taxes paid in other states. This bill was amended with the language mentioned above.
HB 624 – Jackson
This bill reduces certain corporate income tax exclusions and deductions. This bill was amended with the language mentioned above. Additionally, more good news, S-Corporations have been amended out of the bill.
HB 629 – Jackson
This bill reduces income (including individual) and corporate franchise tax credits. This bill was amended with the language mentioned above.
HB 805 – Adams
This bill provides for the carry forward of a certain portion of ad valorem taxes paid to local governments (Inventory Tax Credit). This bill was NOT AMENDED. Tax returns containing a claim MUST BE FILED on or before June 30, 2015, to avoid the carry forward treatment for a portion of the credit that is contained in this bill.
The Senate Finance Committee is scheduled to debate the Budget Bill HB 1 upon adjournment this evening. We will continue to update you on bill movement through the remainder of the session that ends next Thursday, June, 11, 2015.
Find Your Legislator • Updates on Proposed Legislation
Other State Tax News
Status Update: Louisiana Tax Credit Registry (LAC 61:III.2701 and 2705)
On May 29, 2015, LCPA staff and members with relevant tax experience attended the Louisiana Department of Revenue Policy Services Division Public Hearing regarding the proposed changes to the effective date of the transfer and to the use of transferable credits such as movie and historic credits.
LDR received many of the same written comments from the public. LDR indicated these comments will be seriously considered to the extent they will most likely re-write and re-post the proposed changes with a New Notice of Intent Public Comments and Public Hearing.
LDR offered to have some informal meetings to continue discussions on the issues. LCPA staff and members with relevant tax experience will attend these discussions.
The original notice is posted at LAC 61:III.2701 & 2705 - Louisiana Tax Credit Registry
Attachments to e-Filed Return and LDR Fax Numbers
LDR has requested we communicate with you to clarify the methods for sending documentation with e-filed returns. The preferred method of sending documentation with e-filed returns is by attaching a PDF file to an e-filed return. If this method is unavailable to you, the fax number, 225.231.6221, should be used. This number should only be used for faxing documentation that has been requested by an Office Auditor subsequent to filing a return.
Reminder: Deepwater Horizon Court Supervised Settlement Program
June 8, 2015, has been established as the deadline to submit a claim in the Economic and Property Damages (“E&PD”) Settlement. The claims process can be complex, so if you are eligible to file a claim, you should act now to have time to complete your claim before the June 8, 2015, deadline. Access claim forms, detailed claim protocol and FAQs.
Questions about the content of this Alert or about our legislative outreach can be directed
to Linda Babin.