La. Revenue and Taxation § 47:6027

Current with changes from the 2024 Legislative Session

Section 47:6027 - Mentor-ProtégéTax Credit Program

A. Purpose. The legislature finds that the welfare of the state is enhanced by a healthy entrepreneurial business environment where smaller, emerging businesses have an opportunity to thrive. This Section is intended to achieve the following purposes:

(1) To create the Mentor-Protégé Tax Credit Program to facilitate the growth and stability of Louisiana's economy by fostering the overall enhancement and development of protégé firms as a competitive contractor, subcontractor, joint venture partner, or supplier to local, state, federal, and private markets.

(2) To encourage companies with proven competencies in business, technology, and the development of sophisticated business solutions to mentor smaller, emerging Louisiana-based businesses to increase the protégé's technical and business capability, industrial competitiveness, client base expansion, and improved financial stability.

(3) To expand the economy of the state by enlarging its base of wealth-creating businesses.

B. Definitions. The following terms shall have the following meanings unless the context clearly indicates otherwise:

(1) "Developmental Assistance" means assistance to a protégé which may include:

(a) Financial, organizational, and overall business planning and management.

(b) Business development.

(c) Technical assistance.

(d) Rent-free use of facilities or equipment.

(e) Property.

(f) Temporary assignment of personnel to protégé for training purposes.

(g) Any other types of permissible, mutually beneficial assistance.

(2) "Mentor" means a business, large or small, that is committed and able to provide professional guidance and support to its protégés to facilitate their development and growth, particularly in the critical areas of private and public procurements in construction.

(3) "Mentor-Protégé Agreement" means a written agreement between the mentor and protégé, and approved by the Department of Economic Development, that includes an assessment of the protégé's needs, a description of the specific assistance that the mentor will provide to address those needs, the term of the agreement (minimum acceptable term of one year), establish the amount of the tax credit, timing of when the tax credit will be granted, and the goals and objectives of the agreement.

(4) "Protégé" means a business that is currently certified active in the Department of Economic Development's Small and Emerging Business Development Program or is registered in the state's small entrepreneurship program and is the recipient of developmental assistance pursuant to a Mentor-Protégé Agreement. "Protégé" shall not include an affiliate or related party of the mentor.

C. Qualifying entities that fulfill the terms of a Mentor-Protégé Agreement may earn, apply for, and be granted a tax credit on any Louisiana income or corporation franchise tax liability. The administration of applications for these credits and the provision of these credits shall be called the Mentor-Protégé Tax Credit Program.

(1) The Mentor-Protégé Tax Credit Program shall be implemented and administered by the Department of Economic Development. In compliance with the Administrative Procedure Act, the department shall adopt and promulgate such rules as are necessary for the efficient and effective administration of this program.

(2) In providing for the implementation and administration of the program, the department shall work closely with the secretary of the Department of Revenue in order to promulgate rules. Such rules shall include provisions for:

(a) The Department of Economic Development to certify the eligibility of a taxpayer applicant for receipt of the tax credit provided for in this Section and the qualification of any taxpayer claimant to claim the credit against state tax liability.

(b) The presentation of a taxpayer's eligibility certification and any other documentation required to be applied for to earn or claim a credit.

(c) Provide for an annual report of the protégé regarding the assistance received from the mentor, goals and objectives achieved, annual revenue, annual profit, number of employees, and any other information requested by the Department of Economic Development.

(3)

(a) To qualify for a mentor tax credit all of the following qualifications shall be required by each mentor:

(i) Must possess a favorable financial health, including profitability for at least the last two years.

(ii) Must demonstrate its capability to provide managerial or technical skills transfer or capacity building.

(iii) Must meet the goals and objectives of the Mentor-Protégé Agreement.

(b) To qualify as a protégé, each protégé must be certified active in the small and emerging business development program or registered and approved in the small entrepreneurship program by the Department of Economic Development and be willing to participate with a mentoring firm. Additionally, each protégé shall identify the type of guidance needed and enter into a Mentor-Protégé Agreement.

(4) The mentor may earn and apply for and, if qualified, be granted a refundable credit on any income or corporation franchise tax liability owed to the state by the mentor. The amount of the refundable credit shall be established by the Department of Economic Development and contained in the Mentor-Protégé Agreement.

(5) The mentor-protégé tax credits granted by the Department of Economic Development in any fiscal year shall not exceed one million dollars.

(6)

(a) The mentor-protégé tax credit shall be deemed earned on the date of the investment and may be claimed in the tax year in which the investment is made. The credit earned by a corporation shall be claimed on the income and franchise tax return of the corporation, and the credit earned by a pass through entity shall be claimed on the income tax returns of members or partners.

(b) A tax credit granted pursuant to this Section shall expire and have no value or effect on tax liability beginning with the twenty-first tax year after the tax year in which it was originally earned, applied for, and granted.

(7) The amount of the tax credits granted pursuant to the provisions of this Section shall not exceed fifty thousand dollars per Mentor-Protégé Agreement.

(8) In the event it is subsequently determined by the Department of Economic Development that the mentor has not complied with the requirements of the Mentor Protégé Agreement or that the mentor was otherwise not qualified to earn a tax credit pursuant to this Part, any tax credits previously earned and applied against the mentor's tax liability shall be recaptured and added to the tax liability of the mentor for the year that such determination is made.

(1) Any person making an application, claim for a mentor-protégé tax credit, or any report, return, statement, or other instrument or providing any other information pursuant to the provisions of the Mentor-Protégé Tax Credit Program who willfully makes a false or fraudulent application, claim, report, return, statement, invoice, or other instrument or who willfully provides any false or fraudulent information, any person who willfully aids or abets another in making such false or fraudulent application, claim, report, return, statement, invoice, or other instrument, or any person who willfully aids or abets another in providing any false or fraudulent information shall be guilty, upon conviction, of a felony and shall be punished by the imposition of a fine of not less than one thousand dollars and not more than fifty thousand dollars or imprisoned for not less than two years and not more than five years, or both.

(2) Any person convicted of a violation of this Section shall be liable for the repayment of all credits which were granted to that person. Interest shall be due on such repayments at the rate of fifteen percent per annum.

F. Repealed by Acts 2010, No. 1034, §3.

G. The provisions of this Section shall become effective for all income tax years beginning on or after January 1, 2007, and franchise tax years beginning on or after January 1, 2008. However, this Section shall become null and void on December 31, 2011.

La. Revenue and Taxation § 47:6027

Acts 2007, No. 356, §1; Acts 2010, No. 1034, §3.