Provides for the treatment of certain pass through entities under the inventory tax credit. (gov sig) (EN INCREASE SD RV See Note)
SB 65 revises Louisiana’s tax credit for local inventory taxes paid, which is the credit allowed for ad valorem taxes paid on inventory held by manufacturers, distributors, retailers, and certain natural gas storage property. The bill narrows who may claim the credit by prohibiting C corporations, estates, and trusts from earning new credits for tax payments made on or after July 1, 2026, while preserving the credit for cooperatives in limited circumstances and allowing S corporations to claim it only to the extent the credit flows through to shareholders under existing law.
The bill also changes how excess credits are handled. It extends the carryforward period for taxpayers barred from earning new credits from five years to ten years, but only for credits not already expired before January 1, 2025. It further provides that, beginning with tax periods on or after January 1, 2025, excess credits earned by C corporations are not refundable and may only be used against future Louisiana corporation income tax liability. The act applies to income tax periods beginning on or after January 1, 2025, and becomes effective upon gubernatorial approval or other constitutional enactment.
SB 65 amends R.S. 47:6006, the statute governing Louisiana’s local inventory tax credit, and adjusts related rules for corporations, pass-through entities, cooperatives, estates, and trusts. It changes the tax treatment of certain business entities by limiting eligibility for new credits, clarifying flow-through treatment for S corporations, and modifying refundability and carryforward provisions. The bill affects taxpayers that pay local inventory taxes and claim the credit against Louisiana individual or corporation income tax, and it may reduce near-term state revenue by preserving some credits while restricting others and extending carryforward periods for certain taxpayers.
The bill appears to have been broadly supported and noncontroversial in the legislature. It passed the Senate 36-0, the House 94-0, and the Senate concurrence vote 34-0, indicating unanimous approval in both chambers. The absence of committee transcript material suggests there was little recorded public dispute in the available record.
The main policy distinctions in SB 65 concern which entities should be allowed to benefit from the inventory tax credit and on what terms. The bill excludes C corporations, estates, and trusts from earning new credits after the effective date for those tax payments, while preserving limited access for cooperatives and pass-through treatment for S corporations. Another point of potential contention is the extension of the carryforward period and the elimination of refundability for certain C corporation credits, which shifts the value and timing of the tax benefit. No recorded opposition appears in the vote history, so any disagreement was either resolved before final passage or not reflected in the available materials.