2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:1517. Tax exemption budget

RS 47:1517 - Tax exemption budget
A. No later than the first day of March the secretary of the Department of Revenue shall prepare and submit to the governor and the legislature a tax exemption budget in the manner set forth in this Section.
B.(1) The annual tax exemption budget shall be published on the LaTrac website, or any subsequent database that may replace the LaTrac system, and shall include the following:
(a) Each tax exemption, its statutory citation, and its purpose.
(b) The revenue loss to the state caused by each tax exemption for the three preceding years, the estimated revenue loss to the state caused by each tax exemption for the current fiscal year, and the estimated revenue loss to the state caused by each tax exemption for the ensuing fiscal year.
(c) The estimated cost of administering and implementing each tax exemption for the three preceding fiscal years, the current fiscal year, and the ensuing fiscal year.
(d) The tax exemption budget shall also include the following:
(i) The number of businesses which receive each tax exemption, credit, exclusion, refund, preferential tax rate, deferred tax liability, or rebate, hereinafter referred to in this Subsection as the exemption.
(ii) The parish or location of each business which receives a tax exemption; provided, that if fewer than ten businesses receive a particular tax exemption, the tax exemption budget may group such tax exemption with another tax exemption which also has fewer than ten businesses receiving it.
(iii) The information shall be displayed in a manner that identifies:
(aa) The industry group by North American Industry Classification System sector.
(bb) The number of taxpayers by industry.
(cc) The total tax burden by industry group by individual tax before the exemption.
(dd) The total value to each industry group for each exemption.
(ee) The total tax value by each industry group by individual tax of the tax collections after the exemption.
(e) The items contained in Subparagraph (d) of this Paragraph shall be published to the extent that the information is available to the department, on a schedule to be determined by the secretary of the department, beginning with the incentive expenditures, and fully implemented by the date of publication of the Fiscal Year 2018-2019 tax exemption budget on or before March 1, 2020. The secretary shall ensure that the publication shall not include confidential information.
(2) The tax exemptions in the annual tax exemption budget shall also be organized in an additional opening schedule as follows:
(a) Agricultural/Rural: a tax exemption that pertains to a business or person being located in a rural area; or, engaging in an agricultural trade/business.
(b) Business Environment: a tax exemption that encourages competitiveness with other states by impacting the tax burden of business entities that engage in specific activities that include holding or maintaining inventory or property in the state, using or deriving benefit from water, electric power, energy or any other utility type resources, or buying, leasing, renting or selling machines or equipment used for the production, modification, creation or facilitation of tangible personal property in the state, or using consumables in the manufacturing process that does not become a part of the final product, including the following:
(i) Inventory Tax Ad Valorem.
(ii) Business Utilities Sales Tax.
(iii) Manufacturing Machinery and Equipment.
(iv) Direct Inputs and Consumables.
(c) Corporate Income Tax Formula: a tax exemption that is unique or specific to Louisiana and relates to assisting, guiding or aiding a business entity in determining the amount of its income for Louisiana tax purposes.
(d) Dealers and Vendors Compensation and Discounts: a tax exemption that encourages either the timely filing of a return, report, form or document or the timely payment of a tax, fee or other amount due.
(e) Educational Breaks for Educational Institutions: a tax exemption that pertains to an entity that engages in a specified activity that provides or facilitates the act of learning, or, an entity or institution who provides or facilitates learning.
(f) Educational Breaks for Individuals: a tax exemption that pertains to an individual who engages in a specified activity that is beneficial to, or provides or facilitates the act of learning.
(g) Incentives: a tax exemption that encourages a particular or specified economic activity by modifying the tax burden of the economic activity or behavior that is taking place. Categories of incentives include those, that spur the hiring of employees by business, or that are administered by and through a contract with the department of:
(i) Economic Development.
(ii) Culture, Recreation & Tourism.
(iii) Environmental Quality.
(iv) Revenue, including those for Severance Tax (that is not a part of the normal taxing scheme of other states).
(h) Louisiana Constitutional Mandates: a tax exemption outlined in the state constitution that modifies the tax burden.
(i) Non-itemized Sales and Use Tax Exclusions and Exemptions: a sales tax exemption that is not individually itemized on a Louisiana sales tax return before March 2016 and is therefore not assigned a value in the Tax Exemption Budget.
(j) Normal Tax Structure: an exemption that is commonly used or implemented in other states; enacted to prevent double taxation; or used to prevent the taxation of direct business inputs. The exemption could be mandated by the federal government, the state to ensure a foreign, tribal, local, municipality or state entity addresses taxes owed to the state, the federal or state government to ensure the protections of commerce across state lines, the state government to determine the taxability of businesses when it incurs losses, or the state government on activities that sever the state's natural resources in a manner that is not unique to Louisiana and widely accepted policy among oil producing states, including the following:
(i) Federal Mandatory.
(ii) Intergovernment.
(iii) Interstate Commerce.
(iv) Net Operating Loss.
(v) Normal Severance.
(k) Personal Income Tax Formula: a tax exemption that assists, guides, or aids an individual in determining Louisiana tax table income after determining Louisiana adjusted gross income.
(l) Retirement, Disability, and Military: a tax exemption that modifies the tax owed by individuals who receive money, including but not limited to wages and interest as a result of this special status or position in life that is recognized by statute.
(m) Specialty Sales Tax Exemptions, including the following:
(i) Sales tax holidays.
(ii) Purchase of a specific item.
(iii) Purchase made by a specific taxpayer.
(iv) Activities of a specific group or organization.
(n) Specialty Income Tax Exemptions, including the following:
(i) Performance of a specific activity.
(ii) Purchase of a specific item.
(iii) Purchase made by a specific taxpayer.
(3) No statute, provision, exemption, exclusion, refundable or nonrefundable credit, rebate or deduction listed in the categories outlined above shall be listed in more than one category without a specific notation of doing such.
(4) The secretary may add additional categories to the additional opening schedule as deemed appropriate and necessary.
C. The annual tax exemption budget shall also include an assessment of each tax exemption based on the following criteria:
(1) Whether or not each tax exemption has been successful in meeting the purpose for which it was enacted, in particular, whether each tax exemption benefits those originally intended to be benefited, and if not, those who do benefit.
(2) Whether each tax exemption is the most fiscally effective means of achieving its purpose.
(3) Unintended or inadvertent effects, benefits, or harm caused by each tax exemption, including whether each tax exemption conflicts with other state laws or regulations.
(4) Whether each tax exemption simplifies or complicates the state tax statutes.
D. The Department of Revenue is authorized to request from any state or local agency or official any information necessary to complete the budget required by this Section. Any such official shall comply with this request.
E. "Tax exemptions" means those revenue losses attributable to provisions of the state tax statutes or rules promulgated pursuant to such statutes, which allow a special exclusion, exemption, or deduction from gross income or sales or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.
F. The House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs, hereinafter referred to as "committees", shall conduct hearings on the tax exemption budget every odd-numbered year, to be concluded thirty days before the beginning of the regular session of the Louisiana Legislature. The committees shall analyze and consider tax exemptions which have caused revenue loss to the state of ten million dollars or more in any one of the last three fiscal years. From time to time, the committees may report to the legislature findings or recommendations developed as a result of the hearings.
Acts 1989, No. 836, §2, eff. July 1, 1989; Acts 1997, No. 658, §2; Acts 2011, No. 365, §1; Acts 2016, No. 592, §1, eff. July 1, 2016; Acts 2018, No. 667, §2.