Edwards signs income tax exemption for most COVID-19 relief

(The Center Square) – Louisiana Gov. John Bel Edwards has signed into law an exemption from state income taxes for most COVID-19-related aid programs.

Senate Bill 11 by Rep. Kirk Talbot, a River Ridge Republican, now Act 54, applies to individuals and businesses. It does not apply to unemployment benefits, which the federal government has enhanced during the pandemic.

The bill defines “COVID-19 relief benefit” as “any gratuitous grant, loan, rebate, tax credit, advance refund, or other qualified disaster relief benefit directly or indirectly provided to a taxpayer by the state or federal government,” and includes any potential relief legislation yet to be passed. Examples include the state’s Main Street Recovery Program and Critical Infrastructure Worker’s Hazard Pay Rebate.

Since the bill is forward-looking and retroactive, taxpayers who already paid their state taxes may need to file an amended return to take advantage. Louisiana Department of Revenue Secretary Kimberly Robinson told lawmakers it may take the department a while to process the amended returns.

The state Senate approved House Bill 183 on Monday. It changes the rules around taxing disaster unemployment benefits. The bill would make optional the current requirement that claimants who receive the benefits withhold state income taxes when the claim is filed.

Though the bill has advanced without objection in both chambers, senators added an amendment that likely will be controversial when it gets back to the House that calls for a bump to the state’s unemployment benefits, which are among the nation’s lowest. Under the formula currently in use, the weekly maximum would increase $28 from $247 to $275.

Other bills from this year’s regular session Edwards has signed include:

• House Bill 697, which calls for a 10% tax on net gaming proceeds from on-site betting and a 15% tax on mobile betting. The bill also establishes that the Louisiana Lottery would regulate sports betting kiosks in retail establishments.

• Senate Bill 89, which directs the Louisiana Workforce Commission to calculate employer taxes and worker benefits using the formula that normally is used when the unemployment trust balance is at least $750 million but less than $1.15 billion next year. That’s the formula the LWC currently is using despite the fund’s low balance because of similar measures taken last year.

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