(The Center Square) − Several bills passed by Louisiana lawmakers will eliminate numerous tax rebates, exemptions, credits, and deductions, beginning in 2025.
House Bill 2, which targets a broad range of incentive programs, aims to simplify the state’s tax code and reduce spending on incentives deemed ineffective or low-yielding.
Under the new law, Louisiana will repeal various tax benefits for businesses and individuals, including credits for university research parks, low-income housing, and job creation. Other repealed programs include tax breaks for solar energy investments, historic property renovations, and contributions to educational institutions.
The legislation also scales back the use of tax credits against the state’s corporation franchise tax, targeting incentives like those for recycling equipment and donations to public schools. Many lobbyists and lawmakers advocated for the continuation of film and TV production tax credits. Those efforts were successful. The incentives will remain, albeit with reduced caps, meaning they will cost the public less.
Gov. Jeff Landry’s administration has long argued that many of these credits and exemptions provide a low return on investment for taxpayers.
In addition to eliminating specific tax breaks, House Bill 3 removes eligibility for certain tax credits from the franchise tax, further tightening the scope of available incentives for corporations.
The move to streamline Louisiana’s tax system is part of a broader push to improve state finances, but it has drawn mixed reactions. Proponents of tax reform argue the state needs to cut wasteful spending, while critics warn that eliminating these incentives could stifle business development and job growth.
Among the most notable programs targeted for elimination are those related to housing, job creation, and economic development.
The Low-Income Housing Tax Credit, which has long supported affordable housing projects, is among the programs that will be repealed. Several credits designed to incentivize job creation, including those for hiring full-time, part-time, and re-entry workers, will also be eliminated.
Tax credits for university research and development parks and for corporate research initiatives are also being repealed. These credits were intended to foster innovation and attract companies investing in technology and research.
Other credits affected include the Solar Energy Tax Credit, which incentivized renewable energy investments, and various economic development zone credits, such as those for the Atchafalaya Trace Heritage and Development Zone.
The Cane River Heritage Tax Credit, aimed at promoting preservation projects, will also be eliminated as part of the broad overhaul.
House Bill 3 further targets Louisiana’s corporate franchise tax by removing eligibility for certain credits, such as those for research and development expenses, recycling equipment, and investments in Louisiana’s ports.
In addition to these corporate and industry-specific changes, House Bill 1 repeals numerous smaller tax deductions and credits. These include deductions for disabled individuals, elderly taxpayers, and educational expenses for dependents attending nonpublic schools.
Secretary Richard Nelson of the Department of Revenue said that the department considered these deductions and credits no longer necessary since the income liability for the bottom 20% of filers is wiped out with the doubling of the standard deduction.
