Louisiana § RS 47:297.18 - Tax exemption; digital nomads; requirements; limitations

§ RS 47:297.18. Tax exemption; digital nomads; requirements; limitations

            A. It is the intent of the Louisiana Legislature that the digital nomad tax exemption provided for in this Section be used primarily as an inducement for individuals to locate in Louisiana who will make significant contributions to the development of the economy of the state of Louisiana.

            B.(1) There shall be an exemption from individual income taxes imposed by this Chapter of fifty percent of the gross wages of each taxpayer who qualifies as a digital nomad not to exceed one hundred fifty thousand dollars.

            (2) The exemption shall apply for a period of up to two taxable years during taxable years 2022, 2023, 2024, and 2025.

            (3) The exemption shall apply only to gross wages received from the services performed as a digital nomad.

            (4) The exemption shall apply only to income that is earned from remote work.

            (5) For purposes of this Section, the term "digital nomad" shall mean an individual who:

            (a) Establishes residency in Louisiana after December 31, 2021.

            (b) Is considered a covered person with major medical health insurance.

            (c) Works remotely full-time for a nonresident business as provided for by rule by the secretary of the Department of Revenue.

            (d) Is required to file a Louisiana resident or part-year resident individual income tax return for the taxable year in which the exemption is claimed.

            (e) Has not established residency or domicile in Louisiana for any of the prior three years immediately preceding the establishment of residency or domicile after December 31, 2021.

            (f) Has not been required to file a Louisiana resident or part-year resident individual income tax return for any of the prior three years.

            (g) Performs the majority of employment duties in this state either remotely or at a coworking space.

            C. For the purposes of this Section:

            (1) "Covered person" means a policyholder, subscriber, enrollee, or other individual enrolled in or insured by a health insurance issuer for major medical health insurance coverage.

            (2) "Major medical health insurance coverage" means any hospital, health, or medical expense insurance policy, hospital or medical service contract, health and accident insurance policy, or any other contract of this type providing comprehensive major medical benefits, including a group insurance plan, or any policy of family group, blanket, or association health and accident insurance, a self-insurance plan, an employee welfare benefit plan, or a health maintenance organization subscriber agreement. The term "major medical health insurance" does not include publicly funded programs, including federal governmental benefit plans, that are wholly or partially funded by this state.

            D. The taxpayer claiming the digital nomad exemption shall maintain all records necessary to verify that they meet the requirements of this Section.

            E. The Department of Revenue shall limit the number of taxpayers eligible for the digital nomad exemption to five hundred individuals for the life of the program.

            F. The Department of Revenue shall provide an annual written evaluation of the individual income tax exemption for digital nomads and its effectiveness in inducing individuals to locate in Louisiana and present its findings to the Senate Committee on Revenue and Fiscal Affairs and the House Committee on Ways and Means by January first of each year beginning in 2024.

            G. Recovery by Department of Revenue.

            (1) The tax exemption previously granted to a taxpayer under this Section, but later disallowed, may be recovered by the secretary of the Department of Revenue through any collection remedy authorized by R.S. 47:1561 and initiated within three years from December thirty-first of the year in which the exemption was claimed.

            (2) The only interest that may be assessed and collected on the recovered exemption is interest at a rate of three percentage points above the rate provided in R.S. 9:3500(B)(1), which shall be computed from the original due date of the return on which the exemption was claimed.

            (3) The provisions of this Subsection are in addition to and shall not limit the authority of the secretary of the Department of Revenue to assess or to collect under any other provision of law.

            H. The Department of Revenue may promulgate rules in accordance with the Administrative Procedure Act to carry out the intent and purposes of this Section.

            I. There shall be no exemption pursuant to this Section for any wages earned by a digital nomad after December 31, 2025.

            Acts 2021, No. 387, §1, eff. June 16, 2021.