2023 Louisiana Laws › Revised Statutes › Title 51 - Trade and Commerce › §51:1924. Income tax credit or premium tax reduction

RS 51:1924 - Income tax credit or premium tax reduction
A. A person, either natural or artificial, who invests in the certified capital of a certified Louisiana capital company may claim either a premium tax reduction pursuant to R.S. 22:832(E) or a credit against the person's Louisiana income tax in the person's taxable year in which the investment is made, as certified by the commissioner, pursuant to rules promulgated by the secretary, to the Department of Insurance or the Department of Revenue.
B.(1) The income tax credit shall be calculated by the commissioner as thirty-five percent of the person's cash investment in the certified capital of a certified Louisiana capital company.
(2) The total income tax credits granted in any calendar year shall not result in an additional reduction of total income tax revenues of greater than two million dollars.
(3) During any calendar year in which this Subsection will limit the amount of certified capital for which income tax credits are allowed, certified capital for which income tax credits are allowed will be allocated among certified Louisiana capital company groups. Requests for allocation shall be prepared for filing not later than December first on a form prescribed by the commissioner, which form shall include an affidavit by the person pursuant to which such person shall become legally bound and irrevocably committed to make an investment of certified capital in a certified Louisiana capital company subject only to receipt of an allocation pursuant to this Subsection. Any requests for allocation filed with the commissioner before December first of any calendar year shall be deemed to have been filed on December first of such year. Requests for allocation shall be allocated as follows:
(a) When aggregate requests for allocation by certified Louisiana capital company groups do not exceed five million seven hundred fourteen thousand two hundred eighty-five dollars, all requests for allocations shall be approved by the commissioner.
(b) When aggregate requests for allocation exceed five million seven hundred fourteen thousand two hundred eighty-five dollars, each certified Louisiana capital company group shall be entitled to receive an allocation to be calculated by dividing five million seven hundred fourteen thousand two hundred eighty-five dollars by the number of certified Louisiana capital company groups requesting allocations. In the event that this allocation results in one or more certified Louisiana capital groups receiving an allocation in excess of the amount which was requested, such excess shall be reallocated to the remaining certified Louisiana capital groups on an equal basis until the entirety of the allocation has been fully distributed.
(c) No certified Louisiana capital company certified after December first of any year shall be entitled to receive an allocation pursuant to Subparagraph (b) of this Paragraph for the same calendar year in which it was certified.
(d) Annually within ten days of December first, the commissioner shall review all requests for allocation of income tax credits and notify the certified Louisiana capital companies of the amount of certified capital for which income tax credits are allowed to such persons that are investors in such companies. During this ten-day period, each certified Louisiana capital company group may allow for the substitution of one investor for another when the initial investor is unable or unwilling to complete the proposed investment.
(e) If a certified Louisiana capital company does not receive an investment of certified capital equaling the amount of the allocation made to it pursuant to Subparagraph (c) of this Paragraph within ten days of receipt of notice of such allocation, that portion of the allocation will be forfeited and reallocated to the remaining certified Louisiana capital company groups pursuant to the allocation procedure set forth in Subparagraph (b) of this Paragraph, substituting the reallocated amount for the total amount to be allocated.
C. A capital company's initial capitalization, at the time of seeking certification, must be two hundred thousand dollars or more.
D.(1) The total insurance premium tax credits granted pursuant to R.S. 22:832(E) in any calendar year shall not result in an additional reduction of total premium tax revenues of greater than five million dollars per year.
(2) During any calendar year in which this Subsection will limit the amount of certified capital for which insurance premium tax credits are allowed, certified capital for which insurance premium tax credits are allowed will be allocated among certified Louisiana capital companies. Requests for allocation shall be prepared for filing not later than October first on a form prescribed by the commissioner, which form shall include an affidavit by the insurance company investor pursuant to which such investor shall become legally bound and irrevocably committed to make an investment of certified capital in a certified Louisiana capital company subject only to receipt of an allocation pursuant to this Subsection. Any requests for allocation filed with the commissioner before October first of any calendar year shall be deemed to have been filed on October first of such year. Requests for allocation shall be allocated as follows:
(a) When aggregate requests for allocation by certified Louisiana capital company groups do not exceed the maximum amount of capital for which insurance premium tax credits may be granted in such calendar year under Paragraph (1) of this Subsection, all requests for allocation shall be approved by the commissioner.
(b) When aggregate requests for allocation exceed the maximum amount of capital for which insurance premium tax credits may be granted in such calendar year under Paragraph (1) of this Subsection, each certified Louisiana capital company group shall be entitled to receive an allocation to be calculated by dividing the maximum amount of capital for which insurance premium tax credits may be granted in such calendar year under Paragraph (1) of this Subsection by the number of certified Louisiana capital company groups requesting allocations. If this allocation results in one or more certified Louisiana capital company groups receiving an allocation in excess of the amount which was requested, such excess shall be reallocated to the remaining certified Louisiana capital groups on an equal basis until the entirety of the allocation has been fully distributed.
(3) No certified Louisiana capital company certified after October first of any year shall be entitled to receive an allocation pursuant to Paragraph (2) of this Subsection for the same calendar year in which it was certified.
(4) Annually within ten days of October first, the commissioner shall review all requests for allocation of insurance premium tax credits and notify the certified Louisiana capital companies of the amount of certified capital for which insurance premium tax credits are allowed to the investors in such company.
(5) If a certified Louisiana capital company does not receive an investment of certified capital equaling the amount of the allocation made pursuant to Paragraph (4) of this Subsection within ten days of its receipt of notice of such allocation, that portion of the allocation will be forfeited and reallocated to the remaining certified Louisiana capital company groups pursuant to the allocation procedure set forth in Paragraph (2) of this Subsection, substituting the reallocation amount for the total amount to be allocated.
(6) Each certified Louisiana capital company shall submit to the commissioner by the first day of September of each year a certified statement stating the amount of certified capital that such company possesses that has not yet been invested to meet the sixty percent investment requirement of R.S. 51:1928(B)(1), if applicable; the amount of certified capital that such company possesses that has not been invested to meet the one hundred percent investment requirements of R.S. 51:1928(B)(2) or (3), if applicable; and the amount of certified capital that such company possesses that has not been invested pursuant to other contractual agreements, if applicable. No certified Louisiana capital company group shall be eligible to submit a request on or before the first day of October of any calendar year for certified capital for which premium tax or income tax credits are allowed if on the first day of September of such year, such certified Louisiana capital company group had certified capital in excess of fifteen million dollars that has not yet met the aforementioned investment requirements of R.S. 51:1928(B)(1), (2), or (3), or other such contractual agreements.
E. The amount of the tax credit which exceeds the person's premium tax and income tax liability for the taxable year for which credits are allowed or the amount of premium and income tax credits that are not used by such person for the taxable year for which such credits are allowed may be carried forward to subsequent years until the credits are exhausted; however, the reduction in any taxable year shall not exceed such person's premium tax or income tax liability for such taxable year.
F. The department shall provide for the transfer or sale of premium and income tax credits under this Chapter. The transfer or sale of income or premium tax credits will be restricted to transfers or sales between affiliates and sophisticated investors, collectively referred to as acquirers. No acquirer shall be able to utilize any premium tax credit earned after July 1, 2002, until at least the second anniversary of the investment date of the investment pool from which the premium tax credits were earned. Furthermore, even though a transfer or sale of credits, known as an election under this Section, may involve several entities, only one election may be made during any calendar quarter. Therefore, an investor in a certified Louisiana capital company may only transfer or sell credits once during a calendar quarter and the entity that purchases the credit may not transfer credits obtained during the quarter in which the credits are transferred or purchased. In any subsequent calendar year, the purchaser of the credits may make one transfer election per calendar quarter.
G. The certified Louisiana capital company shall include in any offering involving the sale of shares to an investor, the following statement: "The state of Louisiana is not liable for damages to an investor in a certified Louisiana capital company. Use of the words 'certified' or 'Louisiana' in an offering does not constitute a recommendation or endorsement of the investment by the Louisiana Department of Economic Development or the Office of Financial Institutions".
Added by Acts 1983, No. 642, §1. Acts 1984, No. 891, §1, eff. July 20, 1984; Acts 1986, No. 695, §1; Acts 1989, No. 496, §1; Acts 1996, No. 21, §§2, 3, eff. June 27, 1996; Acts 1998, No. 70, §2, eff. Oct. 1, 1998; Acts 2001, No. 8, §17, eff. July 1, 2001; Acts 2001, No. 1122, §1, eff. July 1, 2001; Acts 2002, No. 84, §2, eff. June 25, 2002; Acts 2008, No. 415, §2, eff. Jan. 1, 2009.