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2013 Legislative Update: New Tax Credit Registry Administered by LDR

New Tax Credit Registry Will Track Credits, Including Transfers

In this year’s session, the Louisiana Legislature created a new tax credit registry to be administered by the Louisiana Department of Revenue (LDR) in Act No. 418.  When state agencies issue tax credits, they are now required to send information on the tax credit to LDR, who adds it to the registry and assigns the credit a unique number to assist in tracking it. 

Whenever a credit is transferred, both the transferor and the transferee (that is, the person giving or selling the tax credit and the person receiving it) must both notify LDR of the transfer.  Transfers are ineffective unless recorded in the registry.  While previously, the law generally allowed 30 days to notify the state of tax credit transfers, under the new registry system, taxpayers now only have ten days in most cases to notify LDR.  Specifically, the following tax credits are now governed by the 10 day requirement:

  • Motion Picture Investor Tax Credit
  • New Markets Tax Credit
  • Tax Credit for Rehabilitation of Historic Structures
  • Angel Investor Tax Credit Program
  • Brownfields Investor Tax Credit
  • Digital Interactive Media and Software Tax Credit
  • Musical and Theatrical Production Income Tax Credit

Recapture of Tax Credits

The state reserves the right to recapture tax credits that fail to meet the state’s requirements when all is said and done.  If these tax credits were transferred, the new act specifically allows the state to recover the credits from the transferee, whose only recourse is against the transferor who originally received the credits from the state.  However, this Act creates a safe haven for taxpayers who purchase tax credits in good faith, defined as honesty in fact with the observance of reasonable commercial standards for fair dealing.  Under this new law, the state will not recapture credits from a Good Faith Transferee who relied on the registry for the validity of the credits.

Public Records Requests

While information in the registry is expressly confidential and privileged, that privilege is subject to the Public Records Law.  LDR can release any information they are legally obligated to in accordance with a Public Records Request.  Finally, the registry creates a more efficient process for state agencies to share information about tax credits within a framework designed to protect taxpayers’ confidential information.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.