Committee reports bill clarifying profit interests aren’t wages

Senate Bill 133, presented May 15 to the Louisiana House Labor and Industrial Relations Committee, was reported favorably after the bill’s sponsor told members the measure only clarifies existing law that “profit interest are not wages.”

The clarification matters because it narrows the bill’s scope to the tax and compensation treatment of profit interests rather than changing routine wage rules or payment timing for terminated employees.

Senator Presley, the bill’s sponsor, told the committee the bill “is a relatively short bill. It's simply clarifying existing law that profit interest are not wages. That's what the bill does.” Representative Mallory moved to report the measure favorably. Representative Walters asked why several provisions had been deleted from an earlier draft; Presley said the Senate labor committee had replaced the placeholder language with the narrower clarification.

Representative Tarver asked whether the clarifying language applied to entities taxed as partnerships, including S corporations and limited liability companies taxed under the federal partnership rules. A committee member confirmed the change was intended to apply to “all entities taxed as partnership under the federal tax code.” Michael Williams of the law firm Phelps Dunbar was present and identified for the record during that exchange.

The committee record shows one person present in opposition on the first bill and one present willing to provide information, though no public testimony was taken on the floor during the committee’s discussion. After discussion, the chair announced, “Hearing none, the bill is reported favorably.”

Next steps: the committee reported SB 133 to the House for further consideration; no floor action or roll-call vote on the measure was recorded in the committee transcript provided.

Details drawn from the committee hearing may be used to confirm the bill text and any floor amendments before the House takes further action.