| Property Taxes | There is no state property tax in Louisiana, but local city and parish governments may levy property taxes on facilities, land, equipment and inventory. Assessors are required by state law to uniformly assess business and industrial property at 15% of fair market value (land at 10%). Because of different millages, property taxes vary from parish to parish, but the average statewide rate on property is 1% of fair market value. Manufacturing facilities that qualify for Louisiana"s industrial tax exemption enjoy freedom from property taxes on facilities and equipment for a period of 10 years. Private residences are assessed at 10% of fair market value. However, a provision in the Louisiana Constitution provides that no property tax will be charged on the first $75,000 of fair market value of an owner-occupied home (referred to as the ³Homestead Exemption²). |
| Corporate Franchise Tax | The state corporate franchise tax is levied annually at the rate of $1.50 per $1,000 on the first $300,000 of capital stock, surplus, undivided profits, and borrowed capital employed in Louisiana. The rate is $3.00 per $1,000 after the first $300,000. The minimum tax is $10.00 per year. Waiver of the corporate franchise tax is allowable under certain incentive programs. (See Incentives, Chapter 8.) |
| Corporate Income Tax |
The state corporate income tax ranges from 4 percent to 8 percent of the net taxable income. The effective rate of taxation is somewhat less because federal income tables are deductible in computing Louisiana Net taxable income. € 4% up to $25,000 € 5% over $25,000 € 6% over $50,000 € 7% over $100,000 € 8% over $200,000 A partial waiver of corporate income taxes is allowable under State sales tax. |
| Sales Tax | The Louisiana State sales tax is 4%. It is levied on the retail sale of personal property, on goods used or stored for use in Louisiana, and on leases and rentals of tangible personal property and certain services. Basic consumer commodities such as food for home consumption and prescription drugs are exempt from state sales tax. Currently there is a 0.5% parish sales tax in force for Assumption Parish and a 1% sales tax for schools in addition to the 4% state sales tax. An additional 2% sales tax is levied by the city of Napoleonville. Under provisions of state law, all state and most local sales taxes may be waived on the construction materials and operating equipment of companies locating in Enterprise Zones. |
| Individual Income Tax | Louisiana"s individual income tax is one of the lowest in the nation. The tax rates for individuals filing as single, married but filing separately, or as head of household are 2% of the first $10,000 of taxable income, 4% on the next $40,000 and 6% on the taxable income over $50,000. For married persons filing a joint return, the dollar amount in each bracket is doubled. The state simplified income tax law includes a combined personal exemption and standard deduction of $4,500 ($9,000 for heads of households and married taxpayers filing joint returns). The deduction for each dependent is $1,000. The credits and deductions allowed on the federal return are also allowed in computing the Louisiana tax. |
| SUTA-State Unemployment Tax | Louisiana"s unemployment insurance tax currently ranks 50th among the states in terms of amount of weekly benefits paid. Once Louisiana has achieved its $400 million reserve target, rates will be cut an additional 10%. The rate is 1.4% (on first $15,000 in wages). This will disappear in 8-9 years, once the state"s bonds for refinancing the unemployment fund are retired. The primary rate is determined by SIC-code applicable to the business or industry until sufficient data are available to compute an average computation rate; e.g., A new chemical enterprise would be taxed at a rate of 3.8% on the first $8,500 in wages. By the end of the fourth year, a new business will have sufficient unemployment tax history to have reached its ³computation rate² ‹ then, the business is switched from the SIC classification to a computed average having these parameters: € Maximum unemployment tax level = 6.19% (or $540/employee) € Minimum unemployment tax level = 0.13% (or $26/employee) |
| FUTA-Federal Unemployment Tax | The federal unemployment tax is 6.2% on the first $7,000 of wages‹however, if the state tax is paid on a timely basis (monthly), the filer is entitled to a deduction of 5.4%, regardless of the applicable SIC tax rate (effective rate then is 0.8% on the first $7,000). |
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Jim Edmunson, Executive Director South Central Planning & Development P.O. Box 846 Thibodaux, La 70302 (504) 446-0514 |
John Foltz, Executive Director South Louisiana Economic Council P. O. Box 2048 Thibodaux, LA 70302 (504) 448-4485 |
State of Louisiana Department of Economic Development P.O. Box 94185 Baton Rouge, LA 70804-9185 (504) 342-3000 |
| Ten Year Industrial Ad Valorem Tax Exemption Program |
This program provides parish and local property tax exemptions for up to ten years for new or expanding manufacturers that create jobs. The exempted taxes may include school taxes. The initial period of the tax exemption is limited to five years; after the initial five-year exemption, the manufacturer may apply to the Louisiana Board of Commerce and Industry for an additional five-year exemption. Exemptible property includes buildings, machinery, equipment, and furniture and fixtures for new, expanded or renovated facilities. Exemptions cannot be granted for land, raw materials, or finished products. However, materials that are an integral part of the manufacturing process but do not form part of the finished product, such as solvents or catalysts, may be exempted. As with other business incentives provided by the State of Louisiana, in considering applications for property tax exemptions, the Board of Commerce and Industry gives special attention to those applicants that agree to use the products and services of Louisiana manufacturers and suppliers. |
| Jobs Tax Credit Program | Companies can elect to take advantage of a one time tax credit ranging from $100 up to $225 for each net new job created as the result of the start-up of a new business or expansion of an existing one. The credits can be used to satisfy state corporate income tax obligations. Manufacturing companies can elect to take credit in lieu of industrial property tax exemption or the benefits of the Enterprise Zone Program. |
| Enterprise Zones | Companies located in specially designated Enterprise Zones are eligible for a package of tax incentives in addition to those available elsewhere in the state. Enterprise Zone incentives include a one-time tax credit of $2,500 for each net new job created at start-up or added to the payroll during the first five years of the program. (Credits are $5,000 for SIC"s 3720 and 3760). Credits may be used against either the business" state income or state franchise tax bill. The business must create a minimum of five new jobs and fulfill other employee criteria, including certifying that at least 35% of its employees were previously considered unemployable due to a lack of basic skills, were previously receiving some form of public assistance, are residents of the enterprise zone, etc. There is also an exemption from all state and local sales and use taxes (except where local sales taxes are encumbered toward payment of bond indebtedness or are school taxes) for purchases of building construction materials and operating equipment by businesses that build or renovate facilities in Enterprise Zones. This exemption is affected through monthly tax refunds of sales taxes paid. The sales tax exemption is for the duration of the construction project. Enterprise Zone companies also receive special consideration for several federal aid programs and qualify for an additional 5% venture capital state tax credit. There are 13 Enterprise Zones in Assumption Parish, 3 of which are ³designated² by local governments. Napoleonville, the only incorporated area of the parish, has one enterprise zone. The remaining 12 are in other unincorporated areas of the parish. |
| Venture Capital Programs | Because venture capital is the life"s blood of the bold, new business enterprises, Louisiana has taken steps to insure it will be in plentiful supply to companies in the state. Recent banking reforms have expanded the scope of the state banks. An incentive program adopted by the legislature provides for state income tax credits to both corporate and private investors in capital companies that make funds available to promising new Louisiana based enterprises. |
| Pollution Abatement Bonds | When used for pollution abatement projects, industrial development bonds may be issued in unlimited amounts. They provide a method of financing these critical projects at interest rates that are generally lower than conventional financing. |
| Freeport Law | Louisiana"s Freeport Law allows property tax exemptions on the following items: € Goods imported into the United States, so long as they remain on the public property of the port or the docks of the common carrier in which they entered the state or are held in public or private storage in their original containers or for raw materials, in bulk. Goods held for export outside the state or the United States, if the goods are held on the public property of a port, docks of a common carrier, warehouse, public storage facility, etc. € Goods in public or private storage that are in transit through the state in interstate commerce. The point of origin and final destination must both be outside Louisiana, and the goods must remain in the original containers. |
| Corporate Headquarters Tax Equalization Program | This program provides partial corporate franchise tax exemptions for companies that move their corporate headquarters to Louisiana, in order for the corporation"s Louisiana franchise tax to be competitive with the existing headquarters" tax or the tax for proposed new headquarters" sites other than in Louisiana. The exemption is effective for five years; an additional five year exemption may be negotiated. New corporate headquarters receiving this exemption must set aside at least 10% of their procurement of goods and services for purchases from minority businesses. |
| Tax Equalization Programs | Industrial Tax Equalization Program ‹ Provides refunds for sales taxes paid by manufacturers for purchases of raw materials used directly in the manufacturing process. For a manufacturer to receive refunds under this program the company must obtain approvals from the governor and the Board of Commerce and Industry. Warehouse and Distribution Program ‹ Same as above for warehouse and distribution companies. |
| Louisiana Economic Development Corporation |
Act 888 creates the Louisiana Economic Development Corporation to consist of nine members who serve as the single review board for all financial assistance, grants, and investment programs administered by the Department of Economic Development, excluding those under the jurisdiction of State Board of Commerce and Industry. The following programs will be administered by the corporation: The Louisiana Small Business Innovation Research Matching Grant Program This program supports innovative private sector research and development activities intended to generate commercial products, processes or services by issuing grants to Louisiana small businesses that have received Small Business Innovative Research (SBIR) Phase One grant funds. Funds may match on a one-to-one basis, the SBIR grant funding not to exceed $50,000. The grant must be repaid if business moves out of state. The Louisiana Venture Capital Incentive Program This program stimulates availability of venture capital and encourages formation of seed and venture capital funds in Louisiana. Three sub-programs have been created. They are: € The Louisiana Venture Capital Co-Investment Program‹Venture capital funds with at least $7.5 million under their management and with at least five years experience in venture capital activities are eligible to participate. A venture capital firm is eligible for a 25% co-investment from the Louisiana Economic Development Corporation for investment in Louisiana businesses. The Corporation"s co-investment shall not exceed 25% of the total venture capital investment with a maximum of $500,000. € The Louisiana Venture Capital Match Program‹Venture capital funds organized and based in Louisiana that have at least $5 million under management and are managed by experienced venture capital fund managers are eligible to participate in this sub-program. The Corporation may invest $1.00 for every $2.00 raised privately by a Louisiana-based venture capital fund for investment in small business, not to exceed $2.5 million. € The Louisiana Minority Venture Capital Match Program‹Minority venture capital funds organized and based in Louisiana that have at least $250,000 under management and are managed by experienced venture capital fund managers are eligible to participate in this sub-program. The Corporation may invest $1.00 for every $2.00 invested privately by a Louisiana organized and based venture capital fund for investment in minority small businesses, not to exceed $2.5 million. The Louisiana Minority and Women"s Business Development Program This program authorizes the Corporation to issue direct, participation or guaranteed loans to qualified minority and woman-owned businesses. It has loan/guarantee limits up to $250,000. Louisiana Small Business Equity Program This program leverages loans to qualified small businesses in Louisiana on a participating and guaranty basis with commercial lending institutions and licensees. There is no limit on the level of funds available to small businesses under this program. |
| Industrial Development Bonds |
Development bonds can be used to finance industrial sites and buildings, equipment, storage facilities for manufacturing and pollution abatement and control projects. The facilities are in turn leased to the participating company at a rental sufficient to retire the bonds. Development bonds may be issued in amounts up to $10 million and, depending on the type of issuing authority, may have a maturity of 25, 30, or 40 years. At the end of the lease period a company has the opportunity to negotiate a new lease or purchase the facility outright. |
| Innovative Financing | Special divisions of the Department of Economic Development are assigned the task of assisting businesses in the location of financing sources. In addition, the state encourages the formation of venture capital companies whose purpose is to invest in small to medium-sized firms. These Department of Economic Development groups expedite development by designing combinations of incentive programs and special financing. |
| Ten Year |
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One of the South Central States, Louisiana is bounded to the north by Arkansas and Mississippi, the east, by Mississippi and the Gulf of Mexico, the south, by the Gulf of Mexico and the west by Texas. The Mississippi River flows along part of the eastern boundary, then enters the state and creates the rich Delta region. Coastal marshes, alluvial plains and rolling pine hills are part of the varied topography.
From Louisiana, a manufacturer can realistically expect third-day truckload service to major markets in 31 states and the District of Columbia. Within this 31-state area are 69 percent of the nation"s population and 70 percent of its manufacturing plants. |