2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:6016. New markets tax credit

RS 47:6016 - New markets tax credit
A. The legislature hereby finds and declares that the health, safety, and welfare of the people of the state are dependent upon the continued encouragement, development, growth, and expansion of the private sector within the state, especially increased access to capital in certain disadvantaged areas of the state. Therefore, it is hereby declared that the purpose of this Section is to encourage and attract private sector capital investment to such areas within the state.
B. As used in this Section, the following terms shall have the following meanings:
(1) "Adjusted purchase price" shall mean the product of:
(a) The amount paid to the issuer of a qualified equity investment for such qualified equity investment and which, in turn, has been invested in qualified low-income community investments.
(b) A fraction, the numerator of which is the dollar amount of qualified low-income community investments held by the issuer of the qualified equity investment in the state, determined as of the credit allowance date for which the calculation is made, and the denominator of which is the total dollar amount of qualified low-income community investments made by the issuer, determined as of the credit allowance date for which the calculation is made. For purposes of the initial credit allowance date only, the issuer of the qualified low-income community investment will be deemed to hold the amount of qualified low-income community investments, both in the state and outside the state, that the issuer projects in the applications for the qualified equity investment submitted pursuant to Subsection E of this Section. If the issuer of the qualified equity investment fails to make sufficient investments in the state to match such projections by the first anniversary of its credit allowance date, the state may disallow or recapture a portion of the credits from the holder of the qualified equity investment so that the credit earned for the initial credit allowance date reflects the actual investments made by the issuer.
(c)(i) The maximum amount of qualified low-income community investments that may be issued by a single business, on an aggregate basis with all of its affiliates, and be included in the calculation of the fraction described in R.S. 47:6016(B)(1)(b) for qualified equity investments issued after July 1, 2007, and before April 1, 2008, whether to one or more issuers of qualified equity investments, shall not exceed fifteen million dollars.
(ii) For qualified equity investments issued on or after April 1, 2008, and before December 1, 2009, the maximum amount of qualified low-income community investments that may be issued by a single business, on an aggregate basis with all of its affiliates, and be included in the calculation of the fraction described in R.S. 47:6016(B)(1)(b), whether to one or more issuers of qualified equity investments, shall not exceed five million dollars.
(iii) For qualified equity investments issued on or after December 1, 2009, the maximum amount of qualified low-income community investments that may be issued by a single business, on an aggregate basis with all of its affiliates, and be included in the calculation of the fraction described in R.S. 47:6016(B)(1)(b), whether to one or more issuers of qualified equity investments, shall not exceed seven million five hundred thousand dollars.
(iv) For qualified equity investments issued on or after April 1, 2008, the maximum amount of qualified low-income community investments that may be issued by a single business that are consistent with Department of Economic Development target industries shall not exceed fifteen million dollars. Target industries include but are not limited to the housing industry, the medical industry, and the industries referenced in R.S. 51:2453(2)(b)(i). The Department of Economic Development shall certify that qualified low-income investments are consistent with the target industries. The taxpayer shall include any Department of Economic Development certification with his application to the Department of Revenue for credits.
(aa) The Department of Economic Development shall grant or deny a request for certification as an investment consistent with the target industries no more than sixty days after receipt of the request.
(bb) If a request for certification is not denied within sixty days of the certified delivery date of the request, as evidenced by a receipt from the United States Postal Service or private delivery company, the request is deemed to be granted certifying the investment as consistent with the target industries.
(2) "Applicable percentage" means:
(a) For qualified equity investments issued to taxpayers prior to July 1, 2007:
(i) One percent for the first three credit allowance dates.
(ii) Two percent with respect to the remainder of the credit allowance dates.
(b) For qualified equity investments issued to taxpayers on and after July 1, 2007:
(i) Ten percent for the first two credit allowance dates.
(ii) Five percent with respect to the remainder of the credit allowance dates.
(3) "Credit allowance date" means with respect to any qualified equity investment the date on which such investment is initially made and the first two anniversaries of such date and with respect to qualified equity investments issued prior to July 1, 2007, the date on which the initial investment is made and the first six anniversaries of such date.
(4) "Qualified equity investment", "qualified low-income community investments", "qualified low-income community business" and "qualified business" shall have the same meaning given to them in Section 45D of the Internal Revenue Code, including otherwise qualified businesses located in any special GO Zone Targeted Population or similar census tracts approved as eligible for receipt of qualified low-income community investments under Section 45D of the Internal Revenue Code. No investment shall be considered a "qualified equity investment" unless it has also been designated as a "qualified equity investment" for the same amount and is eligible for tax credits according to the provisions of Section 45D of the Internal Revenue Code.
C. A natural or juridical person who holds a qualified equity investment which, in turn, has been invested in a qualified low-income community investment on a credit allowance date of such investment which occurs during the taxable year may claim a credit against the person's Louisiana income or corporation franchise tax for such taxable year equal to the applicable percentage of the adjusted purchase price paid to the issuer of such qualified equity investment for such investment which, in turn, has been invested in qualified low-income community investments for such credit allowance date.
D. The total of all such credits taken by any person under this Section shall not exceed such person's total combined income and corporation franchise tax liability for that taxable year. Any credits that are not used in the first taxable year eligible for use shall carry forward and be eligible for use in future taxable years for a period not to exceed ten years.
E.(1)(a) The aggregate amount of credit for all qualified equity investments issued to taxpayers before July 1, 2007, under this Section shall not exceed five million dollars, in the aggregate, annually.
(b) The aggregate amount of credit for all qualified equity investments issued to taxpayers on and after July 1, 2007, and before April 1, 2008, under this Section shall not exceed fifty million dollars in the aggregate over the life of the program.
(2)(a) The aggregate amount of credit for all qualified equity investments issued to taxpayers, on or after April 1, 2008, under this Section shall not exceed fifty million dollars in the aggregate over the life of the program, based upon the following schedule:
(i) A maximum of twenty-five million dollars of the total aggregate amount of credit shall be available for issuance during the period beginning April 1, 2008, and ending December 31, 2008.
(ii) A maximum of twelve million five hundred thousand dollars of the total aggregate amount of credit, plus any unissued credits from any prior taxable year, shall be available for issuance during the period beginning on January 1, 2009, and ending on November 30, 2009.
(iii) A maximum of twelve million five hundred thousand dollars of the total aggregate amount of credit, plus any unissued credits from any prior taxable year, shall be available for issuance during the period beginning on December 1, 2009, and ending on December 31, 2010.
(iv) For all taxable periods beginning on or after January 1, 2011, the only amount of credit allowable for issuance shall be the amount of unissued, disallowed, or recaptured credits from any prior taxable year.
(b) For purposes of this Subsection, the term "aggregate amount of credit" shall mean the sum of credits from all applicable credit allowance dates due to an investment.
(c) Qualified equity investments made after July 1, 2008, shall be eligible only for credits available for issuance during the period which includes the initial credit allowance date.
(3)(a) An application for a tax credit pursuant to this Section shall be submitted to the secretary on forms established by the secretary prior to the use of the credit, and the allocation of tax credits under this Section shall be on a first-come, first-served basis; however, all tax credit requests received on the same business day shall be treated as received at the same time, and if the aggregate amount of the tax credit requests received on a single business day exceed the total amount of available tax credits, tax credits shall be approved on a pro rata basis.
(b) The secretary shall review all applications for tax credits and provide a response to the applicant regarding the allocation no more than sixty days after receipt of an application. If a delay in the processing of the application is attributable to the applicant, the sixty-day time limit shall be suspended.
(4)(a) All entities taxed as corporations for Louisiana income tax and franchise tax purposes shall claim any credit allowed under this Section on their corporation income and franchise tax return.
(b) Individuals, estates, and trusts shall claim any credit allowed under this Section on their income tax return.
(c) Entities not taxed as corporations shall claim any credit allowed under this Section on the returns of the partners or members as follows:
(i) Corporate partners or members shall claim their share of the credit on their corporation income tax or franchise tax returns.
(ii) Individual partners or members shall claim their share of the credit on their individual income tax or franchise tax returns.
(iii) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
(5) No credit issued on or after April 1, 2008, shall be claimed on a return due on or before December 31, 2008.
(6) No credit issued on or after December 1, 2009, shall be claimed on a return due on or before December 31, 2010.
F.(1) Any tax credits not previously claimed by any taxpayer against its income or franchise tax may be transferred or sold to another Louisiana taxpayer, subject to the following conditions:
(a) A single transfer or sale may involve one or more transferees. The transferee of the tax credits may transfer or sell such tax credits subject to the conditions of this Subsection.
(b) Transferors and transferees shall submit to the Department of Revenue, in writing, a notification of any transfer or sale of tax credits within ten business days after the transfer or sale of such tax credits. The notification shall include the transferor's tax credit balance prior to transfer, the transferor's remaining tax credit balance after transfer, all tax identification numbers for both transferor and transferee, the date of transfer, the amount transferred, a copy of the credit certificate, price paid by the transferee to the transferor, and any other information required by the Department of Revenue. The notification submitted shall include a processing fee of up to two hundred dollars per transferee.
(i) Failure to comply with this Paragraph will result in the disallowance of the tax credit until the taxpayers are in full compliance.
(ii) The transfer or sale of this credit does not extend the time in which the credit can be used. The carry forward period for credit that is transferred or sold begins on the date on which the credit was originally earned.
(iii) To the extent that the transferor did not have rights to claim or use the credit at the time of the transfer, the Department of Revenue shall either disallow the credit claimed by the transferee or recapture the credit from the transferee.
(2) The transferee shall apply such credits in the same manner and against the same taxes as the taxpayer originally awarded the credit.
G. If any amount of the federal tax credit available with respect to a qualified equity investment which is eligible for a credit under this Section is recaptured pursuant to the provisions of Section 45D of the Internal Revenue Code, the Department of Revenue shall have the right to recapture a portion of the credit granted with respect to such qualified equity investment under this Section. The percentage of the credit granted pursuant to this Section that may be recaptured shall be equal to the percentage of the total federal credit earned with respect to such qualified equity. In addition, if an issuer of a qualified equity investment that earned credits under this Section fails to maintain qualified low-income community investments in this state in an amount at least equal to the amount used in calculating the credits issued hereunder through all anniversaries of the credit allowance date of such qualified equity investment, the Department of Revenue shall have the right to recapture the credits granted with respect to such qualified equity investment under this Section.
H. The Department of Revenue shall promulgate such rules and regulations as may be necessary to carry out the purposes of this Section, including rules to facilitate the application for and transfer of credits earned pursuant to this Section. The Department of Economic Development shall promulgate such rules and regulations that may be necessary to identify targeted industries.
I. Tax credits shall be allowed for qualified equity investments which, in turn, have been invested in qualified low-income community investments until December 31, 2013.
Acts 2002, No. 66, §1, eff. Sept. 1, 2002; Acts 2005, No. 424, §1, eff. July 11, 2005; Acts 2005, 1st Ex. Sess., No. 58, §1, eff. Dec. 6, 2005; Acts 2007, No. 379, §1, eff. July 1, 2007; Acts 2008, 2nd Ex. Sess., No. 4, §1, eff. March 24, 2008; Acts 2009, No. 463, §1, eff. July 8, 2009; Acts 2013, No. 418, §1, eff. June 21, 2013.