Louisiana lawmakers approve new markets tax credit to boost small businesses

The House Ways & Means Committee of the Louisiana Legislature convened on June 2, 2025, to discuss several key legislative proposals aimed at tax exemptions and credits that could impact small businesses and nonprofit organizations across the state.

The meeting began with a discussion on a new tax exemption aimed at supporting agencies that work with youth. The proposal requires annual renewal, allowing the committee to monitor its impact on the general fund. Representative Farnham inquired about the existing number of tax exemptions, which was estimated to be around 30 to 40 for personal taxes. Concerns were raised about the increasing complexity of the tax exemption system, which can overwhelm taxpayers trying to navigate their options.

Luke Morris from the Department of Revenue acknowledged the challenges posed by the growing list of exemptions, noting that it complicates the tax filing process for citizens. He emphasized the need for a more streamlined approach to tax exemptions to enhance clarity for taxpayers.

The committee then moved on to Senate Bill 162, presented by Senator Reese, which focuses on the collection and administration of sales and use taxes. This bill aims to modernize language related to remote sellers and update economic nexus thresholds. The committee unanimously voted to report the bill favorably.

Next, Senate Bill 186, also introduced by Senator Reese, was discussed. This bill pertains to the new markets tax credit, which is designed to facilitate access to private capital for small businesses in low-income and rural areas. The proposed legislation would allow Louisiana to compete for federal allocations aimed at supporting small businesses, particularly those owned by veterans, women, and minorities. The bill includes provisions for measuring the effectiveness of the tax credit, requiring businesses to report specific data to Louisiana Economic Development over a five-year period.

The committee expressed support for the new markets tax credit, recognizing its potential to inject significant capital into the state's economy. The bill was also reported favorably without objection.

In conclusion, the meeting highlighted the committee's ongoing efforts to refine Louisiana's tax exemption and credit systems, aiming to support small businesses and nonprofit organizations while addressing the complexities faced by taxpayers. The committee plans to continue monitoring the impact of these legislative measures as they move forward.