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Committee extends digital‑nomad tax exemption for two years; utilization low to date
Summary
Senate Bill 159 would extend the sunset on Louisiana's digital nomad income tax exemption for two years and clarifies the definition of qualifying nonresident employers; Department of Revenue told the committee 11 taxpayers used the credit in its first full year, producing about $21,000 of revenue loss.
The House Committee on Ways and Means voted Monday to report Senate Bill 159, which extends the sunset of Louisiana's digital nomad income tax exemption by two years and clarifies the definition of qualifying nonresident employers.
Sponsor Senator Kathy said the program was intended to attract remote workers who establish domicile in Louisiana; early uptake has been limited because the program's rules were promulgated late after the law passed. "I'm just asking to extend the sunset two years to get a true five‑year look," Kathy said.
Committee staff described amendments (set 3818) that rework the definition of a "digital nomad" to include individuals who work remotely full time for a unit or division of a nonresident business or for a nonresident business with insubstantial Louisiana‑based activity. The statute also contains a 500‑person cap on total participants in the program (not an annual cap), and the credit exempts up to 50% of qualifying wages (up to $150,000 of income, i.e., up to $75,000 exempt in a qualifying year).
Luke Morris of the Department of Revenue testified that 11 taxpayers claimed the exemption for tax year 2022 (filed in 2023), which amounted to about $500,000 of exempt wages and roughly $21,000 of lost revenue to the state. Morris said the department expects administrative costs in promulgating and administering the program but that the promotion and recruitment role would fall largely to Louisiana Economic Development and local economic‑development organizations.
Committee members debated whether the low utilization meant the exemption should be repealed or whether additional promotion and local economic‑development partnerships could increase uptake. Representative Young said extending the program makes sense to let a multi‑year recruitment effort play out; Representative Farnham and others questioned whether state resources devoted to administration would be justified by the likely returns.
Representative Young moved to report SB 159 with amendments; no committee member objected and Chair Emerson announced the bill will be reported with amendments.
