Establishes an income tax credit for certain amount of annual auto insurance premiums paid by a taxpayer (OR GF RV See Note)
Summary
HB 331 creates a new Louisiana individual income tax credit for resident taxpayers who pay high motor vehicle insurance premiums on vehicles they own. The credit applies only to qualifying premiums that exceed $2,500 per vehicle in a taxable year, and it is limited to no more than two vehicles per taxpayer. The credit amount is capped at the lesser of the excess premium amount or $5,000 per vehicle.
If the credit is larger than the taxpayer’s income tax liability for the year, any unused amount may be carried forward for up to five taxable years, but the credit can never reduce tax below zero in any given year. Taxpayers must keep records to prove eligibility and the amount claimed, and the Department of Revenue must adopt rules to administer the credit. The credit would apply to taxable periods beginning on or after January 1, 2026, and would not be available for taxable years beginning after December 31, 2031.
Impact
The bill would add R.S. 47:297.26 to Louisiana’s individual income tax laws, creating a temporary, refundable? no, nonrefundable income tax credit structure for certain auto insurance premium costs. It would affect resident individual taxpayers who own insured vehicles, while also imposing administrative duties on the Department of Revenue to promulgate implementing rules and verify claims. The measure would reduce state income tax collections for eligible taxpayers and could have a fiscal impact on the general fund, while setting a sunset on credits earned after 2031.
Sentiment
Based on the available context, there is no recorded committee debate or vote history to indicate strong support or opposition, so the bill’s sentiment cannot be measured from discussion. The bill text itself suggests a policy goal of providing tax relief to residents facing high auto insurance costs, which is generally a consumer-relief framing. Because no transcripts or votes are provided, there is no evidence of formal contention in the available record.
Contention
The main policy issue inherent in the bill is that it targets only taxpayers with very high premiums, meaning the benefit would be limited to a subset of vehicle owners and would not assist all drivers. Another likely point of concern is fiscal cost to the state, since the credit would reduce income tax revenue and could create administrative burden for the Department of Revenue. The bill also requires taxpayers to document premiums and ownership, which may raise compliance and verification concerns, but no specific objections or proponents are identified in the provided materials.