Jul 01, 2020
Louisiana Lawmakers Expand Business Tax Breaks, Citing Virus
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By MELINDA DESLATTE, Associated Press
BATON ROUGE, La. (AP) — In their special session ending Tuesday, Louisiana lawmakers agreed to expand and extend business tax credits, exemptions and incentive programs, bills that were pitched as a coronavirus recovery tactic and are estimated to siphon millions from the treasury each year.
Supporters said the measures would help businesses struggling with closures and restrictions mandated by Gov. John Bel Edwards in response to the virus outbreak.
“We have to take care of the businesses that employ people that provides them the income to be able to move forward,” said Sen. Barry Milligan, a Republican from Shreveport. “The more businesses we lose, the more paychecks we lose, the more of our tax base we lose.”
Critics said the approach was haphazard, involved too little study and could worsen the state's budget problems from the virus.
“We know we have fiscal woes ahead,” said Sen. Karen Carter Peterson, a New Orleans Democrat.
Sen. Jay Morris, a Monroe Republican, cautioned his colleagues: “It’s easy to give away. It’s hard to take back.”
The Democratic governor has not said which measures he will support and which he opposes. He has said he could back “selective” business tax breaks depending on the details.
The bills would cost about $25 million in the budget year that begins Wednesday, according to financial estimates. But in some instances, the financial impact of the bills is not entirely clear — and some of the proposals are back-loaded, so they will cost tens of millions more in later years. The tax breaks, with extensions included, are estimated to total at least $230 million in lost tax collections over five years, but could cost much more, according to nonpartisan bill analyses.
Republicans criticized the financial estimates, suggesting the state will reap tax revenue by stimulating the economy.
One of the largest tax breaks, starting at $11 million in the first year and growing annually, would benefit the state’s gambling industry.
Lawmakers passed bills that would:
—Extend Louisiana's expiring historic tax credit program another four years, to expenses incurred before mid-2026. Lawmakers added a spending cap on the program for applications submitted after July 1.
—Allow businesses required to collect and remit sales taxes to keep a larger portion of those tax collections for themselves.
—Broaden a tax credit program for businesses that create jobs in certain underserved areas deemed Enterprise Zones to allow retailers, restaurants, bars and hotels to participate if they have no more than 50 workers. The expansion would end in mid-2023.
—Expand a payroll subsidy program for certain businesses that offer higher-paying jobs and health benefits to virus-impacted retailers, restaurants, bars and hotels if they have no more than 50 workers. The expansion would end in mid-2023.
—Renew an expiring tax credit program for certain research and development expenses for another four years.
—Deduct from the taxes owed by riverboat casinos, the land-based casino in New Orleans and slot machines at Louisiana’s racetracks some of the money given to gamblers through promotional play wagers.
—Suspend part of the corporate franchise tax for one year.
—Restart an expired program that provides state tax credits for investments in low-income communities through the federal New Markets Tax Credit Program. A total of $45 million in credits could be claimed over four years, starting in the 2023-24 budget year.
—Extend the Angel Investor tax credit program for start-up businesses through mid-2025 and increase the credit for business investments located in federal “Opportunity Zone” neighborhoods.
Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte
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News Source: usnews.com
District 5 awards grants, not loans, to micro-businesses
SAN ANTONIO – A pilot program that began as a way to boost small business development on the West Side became a financial lifeline for micro-businesses there, when the Covid-19 pandemic began spreading throughout the city of San Antonio.
“When Covid-19 hit, we knew that we needed to redirect the funds to small businesses directly,” said Shirley Gonzales, who represents District 5 on City Council.
Gonzales said many of the mom-and-pop establishments, micro-businesses with five or fewer employees, that are the “backbone of our community,” missed out on the controversial Paycheck Protection Program that gave millions in loans to major companies.
RELATED: These San Antonio businesses received millions of dollars in Paycheck Protection Program loans
"They're the ones who are less likely to have relationships with existing banks or lawyers and accountants on staff to immediately help them apply for funds," Gonzales said.
She said that’s why she kept the application process simple.
According to LiftFund, a community-based lender that teamed up with Gonzales’ office, eight micro-businesses were each awarded $5,000 grants, not loans.
She said the city funds she set aside for the program on the West Side are almost depleted.
But, Gonzales said the program will serve as a model for a city-wide program launching next week that will provide not only more funding, but also mentors and other resources to help small businesses.
RELATED: These Texas businesses received $5-10 million in Paycheck Protection Program loans
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