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Corporate tax credits cost state $3 billion in five years, legislative auditor says
Source:
nola.com
- Mar 5, 2012
ublished: Monday, March 05, 2012, 11:07 AM Updated: Monday, March 05, 2012, 12:00 PM
Jeff Adelson, The Times-Picayune By Jeff Adelson, The Times-Picayune
Corporate tax credits cost Louisiana about $3 billion over five years, cutting the amount of money the state collected from businesses by more than half, according to a report from the Legislative Auditor's Office.
Between 2005 and 2010, about 55 percent of the $5.4 billion in taxes owed by corporations were taken off the books by a series of tax credits, including the Motion Picture Investor tax credit, according to the report. During the same time, the $16.5 billion in taxes owed by individuals was reduced by $1.8 billion due to individual tax credits, according to the report.
The report did not attempt to quantify the amount of additional economic activity, and the revenue it brings in, generated by the companies receiving the tax credits.
The amount of taxes avoided by the corporate credits appears to be on the upswing, according to the report. In 2005, about 151,000 firms filed tax returns and about 5.5 percent of them received tax credits equal to about 49 percent of the total taxes owed. By 2009, the last year where complete data is available, about 9.4 percent of the 117,268 firms that filed returns sought tax credits and those credits were equal to about 77.6 percent of all taxes owed by businesses.
In addition, the report found that tax credits are largely granted to a small number of firms in each industry. In 2009, for example, just five firms received 78 percent of the Motion Picture Investor tax credit. Their share was equal to about $16 million out of about $20.8 million that was handed out to all 62 firms that received that credit.
Because of a state law that protects the privacy of tax returns, the Legislative Auditor's Office did not identify those firms.
Category: Louisiana
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