Proposed Changes to State of Louisiana Economic Development Incentive Programs
Central Louisiana Chamber of Commerce, Alexandria, Louisiana, February 4, 2010--The purpose of this correspondence is to inform business owners of proposed changes to the State of Louisiana's economic development incentive programs, which may impact their ability to utilize said programs, if they are considering a new venture within the State of Louisiana. We hope to alert business owners of possible changes limiting access to State of Louisiana economic development incentives for those companies considering an expansion, joint venture, relocation, acquisition, or real estate/equipment sales/acquisition in all parishes. Some of Louisiana's basic economic development programs are being reviewed and new rules are being drafted and proposed to the Commerce and Industry Board, which further qualifies who can use these programs through new eligibility and review criteria. Further program restructuring may also come as a result of recommendations of the Streamlining Government Commission. The incentive programs currently being reviewed include the Louisiana Enterprise Zone Program, the Quality Jobs Program, and the Industrial Property Tax Exemption Program. The primary reason for updating the rules is due to the numerous statutory changes, which have occured since 2003. The programs currently under review and subject to the most change are:
- The Enterprise Zone (EZ) Program: EZ is a jobs incentive program that provides Louisiana income and franchise tax credits to a business creating a minimum of 5 new permanent jobs in the first two years or increasing current employment by 10% (a minimum of one) in the first 12 months of the project. Additionally, the company must meet the hiring requirement of having at least 35% of net new jobs from one of four targeted groups. While EZs are areas with high unemployment, low income or a high percentage of residents receiving some form of public assistance, a business does not have to be located in a designated EZ to participate in the program. A business must create permanent net new jobs at the project site; however, a business is not required to be located in an EZ to participate. A business does not have to invest money, only create additional jobs. Benefits:
- Provides a one-time $2,500 credit per new job.
- Rebates 4% state sales/use tax on materials, machinery, furniture or equipment; OR
- Earns 1.5% Refundable Investment Credit.
- The Quality Jobs (QJ) Program: QJ provides a cash rebate to companies that create well-paying jobs and promote economic development. Set wage rates and a healthcare benefit requirement must be met in order for the job to be considered a "quality job". Benefits:
- Provides 5% or 6% cash rebate of annual gross payroll for new direct jobs for up to 10 years.
- Allows for 4% state sales/use tax rebate on capital expenditures; OR
- 1.5% investment tax credit for qualified expenses.
Proposed changes being considered could limit access to the programs.
If you are considering any activity which will result in the creation of new jobs and/or direct investment into buildings, land and/or capital expenditures, we encourage you to file advance notification as soon as your project allows. This filing can be done online or a modest fee.
To review the state business incentives programs in their current form, please visit www.louisianaforward.com. Advance notifications can be filed through the FastLane system online with Louisiana Economic Development at https://fastlane.louisianaeconomicdevelopment.com. If you are unsure and have questions, please e-mail ranson@cenlachamber.org. You may also wish to contact your private professional service provider for further guidance.
Time is of the essence: If you are considering an expansion in the next 6 months and you do not file advance notification in the next 60-90 days, you may be limited to the benefits you can receive under these programs.