Chapter Chapter 5. Industrial Ad Valorem Tax Exemption Program

A. New Rules 1. These rules amend and restate prior rules and upon adoption are to implement two important policies for the industrial property tax exemption. The first is as a competitive incentive for job creation and under compelling circumstances, job retention. The second is…

Addition to a Manufacturing Establishment— 1.a. a capital expenditure for property that would meet the standard of a new manufacturing establishment if the addition were treated as a stand-alone establishment; b. a capital expenditure for property that is directly related to the …

A. An advance notification of intent to apply for tax exemption shall be filed with the department on the prescribed form prior to the beginning of construction or installation of facilities on all projects for tax exemption except as provided in §505.A and B of these rules. An a…

A. The renewal of miscellaneous capital addition contracts approved in accordance with JBE 16-26 and 16-73 shall be treated in accordance with prior rules. B. Miscellaneous capital additions which had pending contractual applications on June 24, 2016, and which provide for new jo…

A. The board shall consider for tax exemption buildings and facilities used in the operation of new manufacturing establishments located within the state of Louisiana (subject to the limitations stated in §§517 and 519) and additions to manufacturing establishments within the sta…

A. Property that is an integral part of the manufacturing operation is eligible for the tax exemption. B. The following activities are considered to be integral to the manufacturing process: 1. quality control/quality assurance; 2. packaging; 3. transportation of goods on the sit…

A. Capital expenditures for the rehabilitation or restoration of an existing establishment may be exempted if it is not maintenance. If replacements or upgrades are made as part of a rehabilitation or restoration to an establishment, only the capital expenditures in excess of ori…

A. A manufacturing establishment moved from one location in the state to another place within the state shall be eligible for the unexpired consecutive years, if any, of the tax exemption contract granted at the original location. B. If a manufacturing establishment moves from on…

A. Used equipment is eligible for tax exemption provided no ad valorem property taxes have been paid in Louisiana on said property.

A. Maintenance capital, required environmental capital upgrades and new replacements to existing machinery and equipment, except those replacements required in the rehabilitation or restoration of a facility, are not eligible for the tax exemption. B. If the establishment or addi…

A. The land on which a manufacturing establishment is located is not eligible for tax exemption.

A. The following are not eligible for tax exemption: 1. inventories of raw materials used in the course of manufacturing; 2. inventories of work-in-progress or finished products; 3. any other consumable items.

B. The effective date of tax exemption contracts for property located in parishes other than Orleans Parish shall be December 31 of the year in which effective operation began or construction was essentially completed, whichever occurs first. The effective date of tax exemption c…

A. The owner of a new manufacturing establishment or addition shall document the beginning date of operations and the date that construction is substantially complete. The owner must file that information with the department on the prescribed project completion report form not la…

A. Within six months of the beginning of operations, completion of construction, or receipt of the executed contract, whichever occurs last, the owner of a manufacturing establishment or addition shall file on the prescribed form an affidavit of final cost showing complete cost o…

A. Application for renewal of the exemption must be filed with LED through its online Fastlane portal not more than six months before, and not later than, the expiration of the initial contract. A renewal fee, and late filing fee if applicable, shall be filed with the renewal app…

A. The board reserves the right, on its own initiative or upon written complaint of an alleged violation of terms of tax exemption rules or documents, to conduct an inspection. During the inspection, the department may cause to be made a full investigation on behalf of the board …

A. The department is to be notified immediately of any change which affects the tax exemption contract. This includes, but is not limited to, any changes in the ownership or operational name of a firm holding a tax exemption contract. A fee of $250 shall be filed with a request f…

A. In the event an applicant should sell or otherwise dispose of property covered by a contract of exemption, the purchaser of the said plant or property may, within three months of the date of such act of sale, apply to the board for a transfer of the contract. A fee of $250 sha…

A. The applicant shall file annually with the assessor of the parish in which the manufacturing establishment is located, a complete taxpayer’s report on forms approved by the Tax Commission, in order that the exempted property may be separately listed on the assessment rolls. B.…

A. Purpose 1. Louisiana values its manufacturers and their contributions to its economy. 2. Article VII, Section 21 (F) of the Louisiana Constitution of 1974 provides that the Board of Commerce and Industry (“Board”), with the approval of the Governor, may enter into contracts fo…

Addition to a Manufacturing Establishment— 1.a. a capital expenditure for property that would meet the standard of a new manufacturing establishment if the addition were treated as a stand-alone establishment; b. a capital expenditure for property that is directly related to the …

F. Once the ITEP contract has been executed by the company and the board, the ITEP contract, including any Local ITEP Committee recommendation, included as an exhibit to the ITEP contract, shall be submitted to the governor for review and consideration. G. The governor may approv…

A. The following items may be eligible for the tax exemption: 1. Buildings and Facilities Used in Manufacturing. The board shall consider for tax exemption buildings and facilities used in the operation of new manufacturing establishments located within the state of Louisiana (su…

A. A project application for tax exemption may be filed with LED through its online Fastlane portal, subject to the following conditions: 1. the filing shall be prior to the beginning of construction or installation of facilities on all projects for tax exemption; 2. an applicati…

A. Establishment 1. If local governmental entities wish to provide input to the Governor or BCI on pending ITEP Project Applications, local officials or employees, collectively comprising an ad hoc Local ITEP Committee (the Committee) shall follow the procedures outlined in this …

A. LED will provide a copy of the project application and all relative information to the Louisiana Department of Revenue (LDR) for review. LDR may require additional information from the applicant. LED must receive a letter-of-no-objection or a letter-of-approval from the LDR, p…

A. After its review and determination of eligibility, LED will prepare the project application information in a format suitable for presentation to the board. B. The board must approve the project application prior to a contract being issued. C. Applicant or its representatives w…

A. Eligibility of the applicant and the property for the exemption, including whether the activities at the site meet the definition of manufacturing, will be reviewed by the board based upon the facts and circumstances existing at the time the project application is considered b…

A. Upon board approval of a project application and receipt of the Local ITEP Committee’s recommendation, if any, LED shall draft an ITEP contract setting forth the terms and conditions, which may include but not be limited to the following: 1. an initial term of no more than fiv…

A. Company or its named affiliates listed on Schedule I shall file an annual project property report (APPR) with LED on or before March 31 of each calendar year (or before October 31 for assets located in Orleans Parish) following Board approval of the project application and sha…

A. Application for renewal of the exemption must be filed with LED through its online Fastlane portal within the final year of the initial contract term but prior to expiration of the initial contract. A renewal fee shall be filed with the renewal application, in accordance with …

A. The board reserves the right, on its own initiative or upon written complaint of an alleged violation of terms of tax exemption rules or documents, to conduct an inspection. During the inspection, LED may cause to be made a full investigation on behalf of the board and shall h…

A. LED shall be notified in writing on or before December 31 of any proposed amendments to company’s ITEP contract. 1. ITEP Contract amendments that do not require Board approval include: a. A physical change of the manufacturing location occurring in the same Parish. i. A physic…

A. In the event a named contract holder should sell or otherwise dispose of all property covered by a contract of exemption, to an unrelated third party, the purchaser of the said plant or property may, within three months of the date of such act of sale, apply to the board for a…

A. The applicant shall file annually with the appropriate taxing authority of the parish in which the manufacturing establishment is located, a complete taxpayer’s report on forms approved by the Tax Commission, in order that the exempted property may be separately listed on the …