The 2015 legislative session may not go down in history as the single-worst session for the state’s business community, but it was one of the worst, according to business leaders who weighed in on the recently-ended session this week.
In a recap of the six-week session, which ended June 11, the Baton Rouge Area Chamber says bills passed to help balance the state’s $1.6 billion budget shortfall have set the state’s business climate back and decreased Louisiana’s overall competitiveness.
“The best we can say is the Legislature increased business taxes less than the governor sought to do,” says the BRAC Legislative Review. “While some positive steps were taken and some much worse outcomes were avoided … describing the session as a missed opportunity would be an exercise in understatement.”
Louisiana Association of Business and Industry President Stephen Waguespack put it this way: “You’re talking about $2.2 billion over five years that will be falling primarily on the backs of business. By no means can you call that a successful session.”
The biggest problem with the session, from the business community’s perspective, is a series of legislation that reduces business tax credits, exclusions and rebates. Among other things, those bills will cut the digital interactive media and software tax credit, angel investor tax credit and the inventory tax credit. They also will cap the motion picture tax credit at $180 million a year for the next three years, gut the solar tax credit program, reduce the Corporate Headquarter Relocation Program rebate and limit which businesses are eligible for participation in the Enterprise Zone program.
Also in the wake of the legislative session, the state’s CPAs and tax attorneys are breathing a sigh of relief that some of the language in bills affecting corporate taxes was amended in the final days of the session before the bills passed. Still, the final version of the measures only partially addresses problems that had them concerned, and they say corporate taxpayers are in for a headache.
“It’s better, but it’s still a mess,” says Ronald Gitz II, executive director of the Society of Louisiana CPAs.
At issue are the dozens of bills that roll back business tax credits, exemptions, deductions and rebates. Originally, those bills were to become effective July 1, regardless of the tax year to which a tax return relates. As a practical matter, that would have meant taxpayers who filed for an extension on their 2014 state tax return would have faced a higher tax liability if they filed their return after July 1 than if they did so before then.
