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STATE PROGRAMS

Louisiana Business Incentives.

Your Competitive Advantage Starts Here.

Expanding? Relocating? Starting up? Louisiana’s tax credits and incentive programs can give your company a competitive edge.  A detailed listing of all incentives can be found here.

The 2017 Legislative session made significant changes to many of the state’s incentive programs. Click here for a high-level overview of the changes. 

Information updated August 2017

Industrial Ad Valorem Tax Exemption Program (ITEP)

Effective June 24, 2016, changes apply to the Industrial Tax Exemption Program, pursuant to an Executive Order from the Louisiana Governor’s Office. View the Executive Order here.

Not all changes effective June 24, 2016 are reflected below. FAQs and Eligibility Scenarios are currently being updated to reflect the new rules. Please check again, as updates are ongoing.

The Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP) is an original state incentive program which offers an attractive tax incentive for manufacturers within the state. The program abates, up to eight years, local property taxes (Ad Valorem) on a manufacturer’s new investment and annual capitalized additions related to the manufacturing site.

Eligibility

Businesses must be classified as a manufacturer or related to the manufacturing project in order to receive the benefits of the ITEP program. ITEP is only available for activities related to manufacturers:

  • A manufacturer, as identified by the federal government, has a North American Industry Classification System (NAICS) code that begins with 31, 32 or 33.
    • The NAICS is used as a preliminary qualification criterion. If the company does manufacturing but does not have the manufacturing NAICS code, and 50+% of the activities at the site are considered manufacturing, then additional steps are required to determine eligibility.
      • A detailed description of the activities to be considered manufacturing is provided by the company.
      • A site inspection will be performed by LED to determine if the activity is manufacturing.
  • The program can be used by manufacturers new to Louisiana and is also available to existing manufacturers in Louisiana with new investments to existing facilities.

Program Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

 

Foreign Trade Zones

Imported materials/components into the U. S. pay no duty until they enter the market

  • Goods shipped out of the country, from the foreign trade zone, are duty free
  • Located at the Port of Shreveport-Bossier

 

Enterprise Zone

Learn more about Enterprise Zones >

  • Not all changes effective July 1, 2017 are reflected below. Please check again, as updates are ongoing. For a complete overview of changes made, click here.

    The Enterprise Zone, or EZ program is a jobs incentive program that provides Louisiana income and franchise tax credits to a new or existing business located in Louisiana creating permanent net new full-time jobs, and hiring at least 50% of those net new jobs from one of four targeted groups. The benefit provides:

    • Either a one-time $3,500 or $1,000 tax credit for each net new job created.
    • A rebate of state sales and use taxes paid on qualifying materials, machinery, furniture, and/or equipment purchased or a 1.5% refundable investment tax credit on the total capital investment, excluding tax exempted items. The rebate shall not exceed $100,000 per net new job.

Eligibility

This incentive program is open to Louisiana businesses (new or existing) that will:

  • Create a minimum of five permanent net new full-time jobs within 24 months of their project start date or increase their current nationwide workforce by 10% within the first 12 months.
  • Hire 50% of the net new jobs created from one or more of the certification requirements from these targeted groups:
    1. Residents: someone living in Enterprise Zone within the state.
    1. People receiving an approved form of public assistance.
    2. People lacking basic skills. A person performing below a ninth grade proficiency in reading, writing or mathematics.
    3. People unemployable by traditional standards.

The following employers or persons shall not be eligible to participate in the program:

  • Employers engaged in the gaming industry or residential developments
  • Churches
  • Retail employers assigned NAICS Code Sections 44 and 45
  • Employers assigned NAICS Code Sections, 721, 722 and 5613

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Louisiana Quality Jobs Program

Learn more about the Louisiana Quality Jobs Program >

  • The Quality Jobs, or QJ, program provides a cash rebate to companies that create well-paid jobs and promote economic development.
    • The program provides up to a 6% cash rebate on 80% of gross payroll for new direct jobs for up to 10 years. Effective July 1, 2018, the rebate is available on 100% of gross annual payroll.
    • Provides a state sales/use rebate on capital expenditures or a 1.5% project facility expense rebate on the total capital investment, excluding tax exempted items.

Eligibility

 

  • Bioscience, Manufacturing, Software, Clean Energy Technology, Food Technology, Advanced Materials, Headquarters of Multi-State Businesses, Back-Office Operations, Aircraft MROs or Oil & Gas Field Service

 

OR

  • Must have at least 50% of annual sales out-of-state and/or to in-state customers or buyers if the product or service is resold by the purchaser to an out-of-state customer or buyer or to the federal government

OR

  • The employer is a business that spends fifty percent or more of its time performing services for its out-of-state parent company. These services include but are not limited to legal, marketing, finance, information technology, order management, distribution center operation, or overall operations support.

OR

The following employers or persons shall not be eligible to participate in the program:

  • Retail employers identified by NAICS Code Sections 44 and 45
  • Business associations and professional organizations identified by NAICS Code 8139
  • State and local government enterprises
  • Real estate agents, operators and lessors
  • Automotive rental and leasing
  • Local solid waste disposal, local sewage systems and local water systems businesses
  • Employers engaged in the gaming industry identified by NAICS Code sections 713210 and 721120
  • Attorneys
  • All businesses identified by NAICS Code 5613
  • Nonprofit organizations, unless the department determines that the new direct jobs created by the organization would have a significant impact on Louisiana
  • Professional service firms are ineligible except for the case in which at least 50% of its services are provided for out-of-state customers or for a multi-state (parent) company
  • Construction companies are ineligible except for the case in which it is the corporate headquarters of a multi-state business or can demonstrate that at least 50% of its sales are to out-of-state customers
  • Medical professionals are ineligible except for those engaged in biomedical or biotechnology, servicing rural hospitals, or those in which at least 50% of its patient base is from out-of-state.

Job and Payroll Requirements for Eligibility

If an employer employs:

  • 50 or fewer employees state-wide prior to the start date of the contract, an employer must create at least 5 new direct jobs with new direct job annual payroll of at least $225,000
  • 51 or more employees state-wide prior to the start date of the contract, an employer must create at least 15 new direct jobs with new direct job annual payroll of at least $675,000
  • These jobs must be full time, (full-time employees — working 30 hours or greater per week)
  • Provide a basic healthcare plan that is in compliance with federally mandated healthcare requirements or, if no federally mandated healthcare requirements exist, shall be determined to have a value of at least one dollar and twenty-five cents per hour.
  • Coverage must become effective no later than the first day of the month 90 days after the date of hire

Minimum Wage Requirement

  • The minimum wage requirement for new direct jobs are $18 per hour in wages

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Freeport Law
  • Exempts goods and commodities in public/private storage from property tax while moving through Louisiana in interstate commerce
  • Exempts goods imported into Louisiana from outside the U.S. from property tax as long as goods remain in original containers
Restoration Tax Abatement

Learn more about Restoration Tax Abatements >

  • The Restoration Tax Abatement (RTA) program provides an up to ten-year abatement of ad valorem property taxes on the renovations and improvements of existing commercial structures and owner-occupied residences.
    Five-year contract; option for a five-year renewal with local governing authority approval.

Eligibility

This incentive is open to all Louisiana businesses and homeowners with existing structures to be expanded, restored, improved or developed in qualifying locations, and as approved by the local governing authority.

If property taxes have been paid on the improvements a business or homeowner is not eligible to apply for the exemption. 

Qualifying locations for properties include:

  • Downtown Development Districts
  • Historic Districts (includes properties listed on the National Register of Historic Places) 
  • Economic Development Districts*
    *Different from Enterprise Zones and Economic Development Zones

Eligible expenses:

  • Building and materials 
  • Machinery and equipment (only that which becomes an integral part of the structure)
  • Labor and engineering

Non-eligible expenses:

  • Acquisition cost of the structure or land
  • Movable and personal property

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Motion Picture Investor Tax Credit Program
  • For a complete overview of changes made in 2017, click here.

    For applications received on or after July 1, 2017, Louisiana’s Motion Picture Production Tax Credit program provides motion picture productions up to a 40% tax credit on total qualified in-state production expenditures, including resident and non-resident labor.

    • Provides up to a 40% tax credit (25% base credit; 10% increase for Louisiana screenplay productions, 5% increase if outside of the New Orleans Metro Statistical Area).
    • $50,000 minimum in-state expenditure requirement for Louisiana screenplay productions.
    • $300,000 minimum in-state expenditure requirement on all other eligible productions.
    • The maximum amount of credits that can be issued is $150 million per fiscal year.
    • The maximum amount of credits that can be claimed is $180 million per fiscal year.
    • Tax credits may be used to offset personal or corporate income tax liability in Louisiana.
    • Tax credits may be transferred back to the State for 90% of face value (requires a 2% transfer fee which results in an 88% net).

Eligibility

The program is open to all motion picture production companies headquartered and domiciled in Louisiana producing nationally or internationally distributed motion pictures with total Louisiana expenditures exceeding $300,000, or $50,000 for Louisiana screenplay productions.  

Base Investment Credit Rates (applicable to entire eligible spend):

  • 25% base credit
  • 10% increase for Louisiana screenplay productions (if production is based on a screenplay created by a Louisiana resident, with expenditures greater than $50,000, but no greater than $5 million)
  • 5% increase for out of NOLA zone filming (if production’s office base and at least 60% of principal photography occurs outside of the New Orleans Metropolitan Statistical Area)
  • Base investment credit rate increases may be combined as follows;
    • 30% total – 25% base plus 5% out of zone filming; or
    • 35% total – 25% base plus 10% LA screenplay increase; or
    • 40% total – 25% base plus 5% out of zone filming, and 10% LA screenplay

Additional Credits (applicable to the particular spend only):

  • 15% Louisiana resident payroll credit: Compensation for services paid directly to a Louisiana resident shall be eligible for a 15% payroll tax credit on the qualified Louisiana payroll only. Payments made to a loan-out company are not eligible for this credit.
  • 5% visual effects (VFX) credit: If at least 50% of the production’s VFX budget is expended for services performed in Louisiana by an approved Qualified Entertainment Company (QEC) or a minimum of $1 million on qualified VFX expenditures are made in Louisiana, the production shall be eligible for an additional 5% credit on the qualified VFX spend only.

**Total Credits cannot exceed 40% of the base investment

Qualifying productions include:

  • Feature-length motion pictures
  • Television pilots, series or movies of the week
  • Animated feature films
  • Animated short films
  • Webisodes or any other digitally distributed motion picture
  • Documentaries
  • Commercials

Non-qualifying productions include:

  • Televised news
  • Sporting events
  • Music Festivals

Eligible Production Expenditures

  • Up to $3 million in qualifying payroll expenditures per person, whether paid directly or indirectly through a loan our corporation
  • Producer fees for services performed in Louisiana
  • Rentals/purchases of tangible goods from a source within the state and directly used on 
    a state-certified production in Louisiana
  • Camera rentals
  • Soundstage rental
  • Hotel
  • Props rental
  • Lumber and other building materials directly related to the state-certified production
  • Lighting and grip
  • Makeup
  • Wardrobe
  • Leasing of vehicles
  • Visual FX packages for services performed in Louisiana
  • Editing services performed in Louisiana
  • Film processing performed in Louisiana by a Louisiana processing company
  • Sound mixing
  • Other post-production services performed in Louisiana
  • Marketing and promotion expenses on certain Louisiana expenditures

Non-eligible Production Expenditures

  • Qualifying payroll expenditures in excess of $3 million per person, whether paid directly or indirectly through a loan our corporation
  • Salaries for services performed outside of Louisiana
  • Rentals/purchases of tangible goods from a source outside of Louisiana
  • Rentals/purchases of tangible goods from a source within Louisiana but used outside of the state
  • Related-party finance fees
  • Application fee
  • Expenditures for marketing and distribution
  • Non-production related overhead
  • Costs related to the transfer of tax credits
  • State/local taxes
  • Above the line salaries exceeding 40% 
  • Above the line salaries –  related party transactions exceeding 12% 
  • Verification report fee
  • Airfare
  • Bonds, fees, insurance premiums, finance fees, loan interest fees (except those paid to certain Louisiana companies)
  • Catering (unless obtained from a source within the state)

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Sound Recording Investor Tax Credit Program
  • The Sound Recording Investor Tax Credit provides an 18% tax credit for sound recording projects made in the State of Louisiana. Louisiana also offers some of the world’s finest talent and great recording studios to complement the attractive financial benefits of recording in state. Sound recording investor tax credits are issued as rebates. The Sound Recording Investor Tax Credit provides: 

    • A project based production credit of 18% for eligible production expenditures.
    • Program is subject to a cap of $2.16 million per year. Projects are subject to a $100,000 cap, per year.

Eligibility

The program incentivizes sound recording, defined as a recording of music, poetry or spoken-word performance made in Louisiana and produced in Louisiana in whole or in part. A $25,000 minimum in expenditures is required, with a $10,000 minimum expenditure requirement for Louisiana residents.

Qualifying sound recordings include:

  • Recording, tracking and overdubbing of music and vocal performances
  • Recording of film scores
  • Recording of spoken word performance
  • Recording of live musical performances

Eligible expenditures:

  • Studio rental fees and associated fixed costs
  • Artist and musician salaries directly related to a certified recording project
  • Producer fees directly related to a certified recording project
  • Mixing and mastering of a recording made in whole or in part in the State of Louisiana
  • Instrument and equipment rental
  • Hotel, airfare (when booked through a Louisiana Travel Agent), and catering expenditures directly related to a certified recording project

Non-eligible expenditures:

  • Mixing, mastering or any post-production expenditures for projects not originally recorded in Louisiana are considered non qualifying
  • Producer fees in excess of 20% of the entire project budget are considered non-qualifying
  • Studio rental fees may be limited if they are found to be in excess of fair market value
  • Expenditures associated with related party transactions may be limited as detailed in cost report guidelines
  • All costs associated with duplication, packaging, marketing and distribution are non-qualifying

Program Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Research & Development Tax Credit Program

Not all changes effective July 1, 2017 are reflected below. Please check again, as updates are ongoing. For a complete overview of changes made, click here.

The Research and Development Tax Credit encourages existing businesses with operating facilities in Louisiana to establish or continue research and development activities within the state.

  • Provides up to a 40% tax credit on qualified research expenditures incurred in Louisiana — with no cap and no minimum requirement.

View new Research and Development Tax Credit Agreed Upon Procedures for CPAs.

Eligibility

The Tax Credit Incentive is open to companies who have incurred research and development expenditures in Louisiana and who meet certain requirements (where listed). Only research and development conducted in Louisiana will qualify for the Tax Credit Incentive.

In order for credits to be awarded, a taxpayer must claim the expenditures within one year after December 31 of the year in which the expenditure was incurred.

Ineligible Businesses

The following businesses will be ineligible to participate in the Research and Development tax credit program, unless specifically invited by the Secretary of LED to:

  1. Professional services firms that do not have a pending or issued United States patent related to the qualified research expenditures claimed; and
  2. Businesses primarily engaged in custom manufacturing and custom fabricating that do not have a pending or issued United States patent related to the qualified research expenditures claimed.

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Musical and Theatrical Production Tax Incentive Program

Whether you’re launching a national concert tour or staging a new theatrical production, we’ll help you hit your mark. Louisiana offers a unique tax incentive for musical and theatrical productions.

  • Provides a 7% tax credit for certified Louisiana expenditures between $100,000 and $300,000.
  • Provides a 14% tax credit for certified Louisiana expenditures between $300,000 and $1,000,000.
  • Provides an 18% tax credit for certified Louisiana expenditures over $1,000,000.
  • Provides an additional 7% tax credit for payroll expenditures to Louisiana residents.
  • Program is subject to a $10 million cap per year (with 50% or $5 million being reserved for not-for-profit organizations). Projects are subject to a $1 million cap, per year.
  • The tax credit is refundable or transferable on a one time basis.

Eligibility

Louisiana’s musical and theatrical production income tax credit program is open to concert, theatrical and other live productions that originate or debut in the State of Louisiana. There is a $100,000 minimum in-state expenditure requirement.

Qualifying productions include:

  • Pre-Broadway engagement or remounts
  • Tour or resident production remounts
  • Pre-Broadway tryouts
  • Resident or regional productions
  • National touring companies producing their first public performance in Louisiana
  • Concert tours producing their first public performance in Louisiana

Eligible production expenditures:

  • Salaries directly related to the development of in-state certified productions (up to the first $1 million per person)
  • Physical production costs directly related to an in-state certified production
  • Artist compensation directly related to performance days in Louisiana (up to the first $1 million per person)
  • Creative team compensation directly related to work performed in Louisiana
  • Local and touring crew compensation directly related to work performed in Louisiana (up to the first $1 million per person)
  • Hotel and airfare expenditures directly related to an in-state certified production
  • Venue rental and associated fixed costs

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Digital Interactive Media & Software Development Incentive

Louisiana’s Digital Interactive Media and Software Development tax credit — the strongest of its kind in the nation — is helping innovative digital media and software development companies of all sizes gain a competitive edge.

  • Provides a 25% tax credit on qualified payroll for in-state labor and 18% for qualified production expenditures.
  • No cap and no minimum requirement.
  • Tax credit can be applied to state income tax liability and the state will refund any overages OR applicants can opt for 85% of the value earned as a rebate any time during the year.
Angel Investor Tax Credit Program

Learn more about the Angel Investor Tax Credit >

  • Not all changes effective July 1, 2017 are reflected below. Please check again, as updates are ongoing. For a complete overview of changes made, click here.

    Louisiana’s Angel Investor Tax Credit (AITC) encourages accredited investors to invest in early stage, small wealth-creating Louisiana businesses that seek startup and expansion capital.

    • Provides a 25.2% tax credit on investments by accredited investors who invest in businesses certified by Louisiana Economic Development as Louisiana Entrepreneurial Businesses (LEB).
    • $3.6 million annual program cap.
    • Investors can invest $720,000 per business per year and $1.44 million per business over the life of the program.
    • The AITC Program sunsets on July 1, 2021.

Eligibility

The incentive is available to Louisiana businesses that are not involved in retail, real estate, professional services, gaming or gambling, natural resource extraction or exploration, or financial services, including venture capital funds.

Qualifying uses of investment funds include:

  • Capital improvements
  • Plant equipment
  • Research & development
  • Working capital

Non-eligible uses of investment funds include:

  • Pay dividends
  • Redeem shares
  • Repay debt
  • Repay shareholders’ loans

What qualifies as an LEB?

  • The principal business operations are in Louisiana, with Louisiana as the primary place of employment for the employees of the business.
  • The business must possess a fully developed business plan that includes all appropriate long and short term forecasts and contingencies of business operations, including research and development, profit, loss and cash flow projections, and details of expenditure of angel investor funding.
  • The business must have a Louisiana Tax Identification Number.
  • The business has either gross annual sales of less than $10 million or a business net worth of less than $2 million.
  • The business employs 50 or fewer full-time employees.
  • The business must demonstrate that it will create quality jobs in the state.
  • The business is not primarily engaged in the business of retail sales, real estate, professional services, gaming or gambling, natural resource extraction or exploration, or financial services including venture capital funds.
  • The business has a plan of progression through which more than 50% of its sales will be derived from outside of Louisiana.

Who qualifies as an Accredited Investor?

  • An Accredited Investor is defined as:
    1. A natural person who has an individual or joint net worth with a spouse exceeding $1 million at the time of the investment.
    2. A natural person who has individual income exceeding $200,000 or joint income with a spouse exceeding $300,000.
    3. An Angel Pool, all of whose participants shall be Accredited Investors.

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Downtown Development Area

Permit fees for City Codes and Ordinances will be waived in the Downtown Development Area.

• Eligibility requirements:
> Rehabilitation or renovation of buildings and structures located in the Downtown
Development Area
> Buildings and structures must have been constructed prior to 1960.

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