2023 Louisiana Laws › Revised Statutes › Title 22 - Insurance › §22:832. Reduction of tax when certain investments are made in Louisiana

RS 22:832 - Reduction of tax when certain investments are made in Louisiana
A.(1) The amount of the tax payable shall be reduced from the amount otherwise fixed in this Part if the payer files a sworn statement with the annual report required by this Part showing as of the end of each fiscal quarter reporting period that at least the following amounts of the total admitted assets of the payer, less assets in an amount equal to the reserves on its policies issued in foreign countries in which it is authorized to do business and which countries require an investment therein as a condition of doing business, are invested and maintained in qualifying Louisiana investments as hereinafter defined in Subsection C of this Section.
(2) The amount of tax credit granted shall be as provided in Subsection B of this Section and based on the average of the percentage of qualifying Louisiana investments held at the end of each fiscal quarter for the fiscal year.
(3) However, Paragraph (1) of this Subsection notwithstanding, for any taxable year beginning on or after January 1, 2016, and before January 1, 2018, for all payers, except for life insurance companies writing life insurance premiums with total admitted assets of fifteen million dollars or less and health maintenance organizations subject to the tax in R.S. 22:842(B), the amount of the tax credit granted shall not exceed ninety-five percent of the tax credit for the average percentage of qualifying Louisiana investments as provided in Subsection B of this Section.
B. If one-sixth of the total admitted assets of the payer are in qualifying Louisiana investments, then the tax payable shall be thirty-three and one-third percent of the amount otherwise fixed in this Part; if at least one-fifth of the total admitted assets of the payer are in qualifying Louisiana investments, then the tax payable shall be twenty-five percent of the amount otherwise fixed in this Part; if at least one-fourth of the total admitted assets of the payer are in qualifying Louisiana investments, the tax payable shall be fifteen percent of the amount otherwise fixed in this Part; and if at least one-third of the total admitted assets of the payer are in qualifying Louisiana investments, then the tax payable shall be five percent of the amount otherwise fixed in this Part.
C. For the purposes of this Part, beginning January 1, 2017, "a qualifying Louisiana investment" is hereby defined as:
(1) Bonds of this state or bonds of municipal, school, road, or levee districts, or other political subdivisions of this state or bonds approved for issue by the Louisiana State Bond Commission.
(2) Mortgages on property located in this state.
(3) Real property located in this state.
(4) Policy loans to residents of Louisiana, or other loans to residents of this state, or to corporations domiciled in this state.
(5) Common or preferred stock in corporations domiciled in this state.
(6) In addition to the investments provided for in Paragraphs (1) through (5) of this Subsection, for purposes of health maintenance organizations subject to the tax in R.S. 22:842(B), for taxable years beginning on or after January 1, 2017, "a qualifying Louisiana investment" is hereby defined as:
(a) Certificates of deposit issued in Louisiana by any bank, savings and loan association, or savings bank any of which has a main office or branch in Louisiana or by a trust company with a main office or branch in Louisiana if such trust company holds such funds in trust and invests them in certificates of deposit issued by a bank, savings and loan association, or savings bank with a main office or branch in Louisiana.
(b) Cash on deposit in an account in Louisiana in any bank, savings and loan association, or savings bank, or a trust company holding such funds in trust, any of which has a main office or branch in Louisiana.
(c) Such investments shall be considered as qualifying Louisiana investments only when made by a health maintenance organization that meets all of the following criteria:
(i) Offers fully insured commercial or Medicare Advantage products.
(ii) Is domiciled, licensed, and operating in this state.
(iii) Maintains its primary corporate office and at least seventy percent of its employees in this state.
(iv) Maintains in this state its core business functions which may include utilization review services, claim payment processes, customer processes, customer service call centers, enrollment services, information technology services, and provider relations.
NOTE: Paragraph (C)(7) eff. Jan. 1, 2024. See Acts 2023, No. 310.
(7)(a) For purposes of businesses issuing life insurance policies subject to the tax in R.S. 22:842(A), for taxable years beginning on or after January 1, 2024, "a qualifying Louisiana investment" is defined as:
(i) Certificates of deposit issued in Louisiana by any bank, savings and loan association, or savings bank, any of which has a main office or branch in Louisiana, or by a trust company with a main office or branch in Louisiana if the trust company holds funds in trust and invests them in certificates of deposit issued by a bank, savings and loan association, or savings bank with a main office or branch in Louisiana.
(ii) Cash on deposit in an account in Louisiana with any bank, savings and loan association, or savings bank, or a trust company holding funds in trust, any of which has a main office or branch in Louisiana.
(b) An investment shall be considered a qualifying Louisiana investment pursuant to the provisions of this Paragraph only when made by a business that meets all of the following criteria:
(i) Issues life insurance policies.
(ii) Has total admitted assets under three million dollars.
(iii) Is domiciled, licensed, and operating in Louisiana.
(iv) Maintains its primary corporate office in Louisiana and has at least seventy percent of its employees in Louisiana.
(v) Maintains in Louisiana its core business functions, which include but are not limited to the utilization of review services, claim payment processes, customer processes, customer service call centers, enrollment services, information technology services, and provider relations.
D. Recognizing that it is in the public interest to create an incentive for environmentally clean industry to locate in this state and to broaden the economic base; to encourage investment in this state; and to enhance the economic and financial climate of the state, the legislature finds that a premium tax reduction for insurers investing in certain qualified Louisiana assets promotes the public interest.
E.(1)(a) Recognizing that it is also in the public interest to ensure sufficient availability of venture capital for purposes of technological development and job creation, the premium tax reduction for insurers investing in certified capital companies as defined in R.S. 51:1921 et seq., or in industrial or economic development corporations as defined in R.S. 12:951 et seq., shall be computed as one hundred percent of the amount of the investment at the time the investment is made. The premium tax reduction shall be available for, but not limited to, taxes charged on insurance premiums under R.S. 22:439, 831, 836, 838, and 842. Notwithstanding any provision of law to the contrary, the premium tax reduction shall not be available for taxes charged on insurance premiums under R.S. 22:345, 833, 834, 835, 837, and 1476. The investment shall be in the form of cash or debt instruments that are obligations of the investing insurance company to the certified capital company or the industrial or economic development corporation. Such debt instruments shall be converted into cash at a rate of not less than ten percent per year from the date of the investment.
(b) For purposes of this Subsection, the term "investment" shall include the investment of cash or a note by an insurance company in exchange for either (i) equity in a certified Louisiana capital company or (ii) a loan receivable from a certified Louisiana capital company which has a stated final maturity date of not less than five years from the origination date of the loan and shall not be repaid in a manner which results in the loan receivable being repaid faster than if the loan receivable were repaid by level debt service payments.
(2) The premium tax reduction determined as provided in Paragraph (1) of this Subsection shall be subject to the following limitations:
(a) For investments made during any taxable year beginning on or after January 1, 1989, and before January 1, 1990, the tax reduction shall not exceed forty percent of the tax liability for that taxable year.
(b) For investments made during any taxable year beginning on or after January 1, 1990, and before January 1, 1991, the tax reduction shall not exceed thirty percent of the tax liability for the respective taxable year.
(c) For investments made on or after January 1, 1991, and before January 1, 1999, the tax reduction utilized in any year for any group of affiliates shall not exceed twenty-five percent of the gross premium tax liability for such group, before any credits, for the year in which the investment was made.
(d) For investments made after December 31, 2003, no tax reduction shall be allowed.
(3) The tax reduction as determined by Paragraph (1) of this Subsection and as limited in Paragraph (2) of this Subsection shall be applied as follows: (a) for tax reduction credits granted to investors prior to January 1, 2001, the tax reduction shall be applied to the premium tax liability not to exceed ten percent of the premium tax reduction in any one year until one hundred percent of the premium tax reduction has been claimed by the insurer; or (b) for tax reduction credits granted to investors after January 1, 2001, the tax reduction shall not be applied to any premium tax liability generated within two years from the date of investment and shall be applied to the premium tax liability not to exceed twelve and one-half percent of the premium tax reduction in any one year until one hundred percent of the premium tax reduction has been claimed by the insurer; provided, the reduction in any taxable year shall not exceed the premium tax liability for such taxable year. Notwithstanding the provisions of this Paragraph to the contrary, if a holder of premium tax reduction credits authorized under this Subsection does not use credits that are generated after December 31, 1999, and which are eligible to be used in a given calendar year, those premium tax reduction credits may be carried forward and used in any subsequent year until such credits are exhausted; provided, the reduction in any taxable year shall not exceed the premium tax liability for such taxable year.
(4) The premium tax reductions described in Paragraphs (1), (2), and (3) of this Subsection shall have the same rights with respect to transferability accorded to income tax credits, as described in R.S. 51:1924(F) and be subject to the same forfeiture and repayment provisions as income tax credits, as described in R.S. 51:1927(C) and 1928(A).
F.(1) For purposes of a domestic health maintenance organization with no fewer than five hundred employees residing in Louisiana during the 2016 calendar year, when such health maintenance organization invests at least twenty-five million dollars in bonds of this state or bonds of municipal, school, road, or levee districts, or other political subdivisions of this state or bonds approved for issue by the Louisiana State Bond Commission as provided for in Paragraph (C)(2) of this Section for the last two calendar quarters in the 2016 calendar year, then the tax payable for the calendar year 2016 shall be fifty percent of the amount otherwise levied in R.S. 22:842(B). For purposes of determining the number of employees residing in Louisiana and the dollar amount of the investment in the bonds, "domestic health maintenance organization" shall include the domestic health maintenance organization and its affiliates.
(2) This provision shall not be applicable to a health maintenance organization that is eligible for a tax reduction under any other provision of this Section.
(3) The reduction authorized in this Subsection shall not be applicable to premiums collected or received pursuant to Title XIX of the Social Security Act, Subchapter XIX, Chapter 7, of Title 42 of the United States Code.
Acts 1958, No. 125; Acts 1981, No. 662, §1; Acts 1984, No. 537, §1; Acts 1988, No. 130, §1; Acts 1989, 1st Ex. Sess., No. 15, §1, eff. March 17, 1989; Acts 1992, No. 849, §1; Acts 1993, No. 724, §1; Acts 1994, 3rd Ex. Sess., No. 9, §1; Acts 1996, No. 21, §1, eff. June 27, 1996; Acts 1998, No. 70, §1, eff. Oct. 1, 1998; Acts 2002, No. 84, §1, eff. June 25, 2002; Acts 2006, No. 587, §1; Redesignated from R.S. 22:1068 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 478, §2, eff. July 1, 2010; Acts 2009, No. 503, §1; Acts 2016, 1st Ex. Sess., No. 10, §1, eff. Mar. 9, 2016; Acts 2016, 2nd Ex. Sess., No. 7, §1, eff. June 24, 2016; Acts 2017, No. 313, §1, eff. Jan. 1, 2018; Acts 2023, No. 310, §1, eff. Jan. 1, 2024.