Corporate Tax

Home passes a invoice that might conceal corporate tax break information from the general public

Louisiana lawmakers will meet in the House of Representatives chambers of the State Capitol during the 2020 special session. (Wes Muller / LA Illuminator. Wednesday, September 30, 2020)

House lawmakers voted between 59-38 on Thursday for a bill to amend the Public Records Act to allow the state business development agency to hide certain corporate tax incentive records from the public.

House bill 456, sponsored by Rep. Rick Edmonds (R-Baton Rouge), suggests that certain records be made under the Louisiana Economic Development Tax Incentive Programs (LED), including the industrial tax exemption program, the Louisiana Quality Jobs Program Exemption from Louisiana Public Records Act and Louisiana Enterprise Zone Program.

“It is imperative, Members, that we do not transfer this tool to the other side (to the Senate),” said MP Barry Ivey (R-Central) during the floor debate on Thursday. He said HB 456 was one of the most problematic bills he had ever seen.

As part of the state’s economic development programs, companies often enter into contracts with the state to receive millions in government tax incentives in return for promises to create jobs. These contracts often require these jobs to pay meaningful salaries. Under the Quality Jobs program alone, 123 companies received tax breaks totaling $ 140 million in fiscal 2018-2019. Under current law, the public can judge for themselves whether that $ 140 million was a good investment by searching LED’s records to find out how many jobs each company has created and how many hourly wages they have paid their employees.

Edmonds defended his bill as a necessary measure to protect sensitive employee data from identity theft. He said the tax incentive programs are an agreement between Louisiana Economic Development and a company, but not the company’s employees. Therefore, your personal information should remain confidential.

Nobody has contradicted Edmonds on this point. Instead, those who oppose the bill have stated that it goes beyond hiding employees’ personal information. An additional language in Edmonds’ bill suggests hiding company-level data, including salaries a company pays with money from government tax breaks and other incentives.

If the wages a company pays for each job are kept confidential, Ivey said on the floor of the house on Thursday, it would be impossible for the public to know whether laws related to tax incentive programs are being followed.

Edmonds replied, “I don’t think this type of public recording is even necessary.”

Rep. Buddy Mincey (R-Denham Springs) said residents would lose transparency if the law goes into effect, and Rep. Robby Carter (D-Amite) called it a law against transparency.

“This bill isn’t about protecting the little guy,” said Ivey. “It’s just about covering up these problems for the big companies. That’s what it’s all about: $ 140 million to be given to 123 companies. This bill would not allow any public accountability whatsoever. None. Zero.”

Edmonds said the bill would still allow a company’s total wages paid to remain public, but Ivey said doing so would be of little use. For example, a company might say it created 100 jobs with salaries totaling $ 5 million. This could mean the company pays a salary of $ 50,000 for each position, or the company pays a single executive a salary of $ 1 million while the other 99 employees are part-time or temporary workers, the 10,000 Earn US dollars a year. It would be impossible to know, Ivey said, without line items to correlate salaries with the number of hours worked.

“An individual wage shouldn’t have to be relevant to this issue,” Edmonds said, but he also said he was willing to negotiate with Ivey on the legislation.

Ivey said he hoped they could come to an agreement but said Edmonds would not budge in previous negotiations: “We don’t need the names, we don’t need the positions,” he told the entire chamber. “I even discussed the possibility that if there are fewer than 10 employees, we just give us the aggregate number and we’re good. But if there are more than 10 we should ask for this information. “

Ivey introduced a change on Thursday to try to remove the language of “wages” that would hide wages. It received some bipartisan support but was ultimately rejected by 40-54 votes.

“If we can’t need that one data point – wages so we can tie it to hours – if we can’t ask for that for a program that we can get $ 140 million, about 1.4% of the general state budget, for a Make Program Available Incentive Program – I don’t know what I’m doing here, ”said Ivey. “I’m serious. I don’t know what I’m doing here … one small requirement … It is imperative, members, that we do not transfer this instrument to the other side.”

Edmonds said he supports transparency and believes Ivey opposes the legislation because he has a problem with ITEP and other tax incentive programs.

“It’s about a person who works for a company,” Edmonds said in defense of his bill. “This is not about a person requesting one of these exemptions.”

The law was eventually passed and submitted to the Senate for consideration.

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