Louisiana – Transferable Tax Credit Registry System

2/05/2013

SALT Report 2117 – The Louisiana Department of Revenue and the Louisiana Economic Development Department announced plans to create a transferable tax credit registry system. The purpose of the registry is to enhance the security and transparency of transfers of state tax credits.

The state’s tax credit registry will create a centralized system that will be managed by the LDR.  It will require timely reporting of all tax credit transfers, including sales by the original holder of the credit as well as any subsequent sales.   Currently, state law requires only that a notice of transfer be filed with the LED and the LDR within 30 days of the transfer, which often results in a lapse. However, once the system is completed, a transfer will not be considered effective until it has been reported in the registry.

Additionally, to minimize the potential for fraud, the state plans to incorporate additional safeguards that will confirm if a tax credit has been used or is no longer valid.  These safeguards will give potential investors access to any records that document when the credit was issued, transferred, or used as well as the dates and identities of the parties involved in the transactions.

The tax credit registry will apply to any transferable tax exemption program that continues to exist following the passage of tax reform legislation later this year.  In the event an exemption is eliminated, the registry will be used to address the final transfer of any tax credits associated with eliminated tax exemption programs.

Also, any tax credit transfer fees collected by the LED will be used to pay for the administrative costs necessary to operate the transferable tax credit registry system.

For Further Information

Louisiana Department of Revenue – News Release