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      RS 51:1787     

  

§1787. Incentives

            A. The board, after consultation with the secretaries of the Department of Economic Development and Department of Revenue, and with the approval of the governor, may enter into contracts not to exceed five years to provide:

            (1) For either:

            (a)(i) The rebate of sales and use tax imposed by the state and imposed by its political subdivisions upon approval of the governing authority of the appropriate municipality or the appropriate parish where applicable, or both, and of the governing authority of any other political subdivision, including the office of sheriff in the case of a law enforcement district, for the following:

            (aa) The use of customer-owned tooling in a compression molding process.

            (bb) Purchases of the material used in the construction of a building, or any addition or improvement thereon, for housing any legitimate business enterprise and machinery and equipment used in that enterprise.

            (ii) Final application for the payment of any rebate of sales and use taxes granted pursuant to this Subsection shall be filed no later than six months after the Department of Economic Development signs a project completion report and sends it to the Department of Revenue, the political subdivision, and the business, or no later than thirty days after the end of the calendar year in the case of customer-owned tooling used in a compression molding process. The project completion report cannot be signed until the project is complete and the contract has been approved by the board and the governor. The amount to be rebated shall in no case be greater than the total of the actual amount of the sales and use taxes paid.

            (iii) Sales and use taxes imposed by a political subdivision which are dedicated to the repayment of bonded indebtedness or dedicated to schools shall not be eligible for rebate. All other state and local sales and use taxes shall be eligible for rebate.

            (iv) Requests for rebates of state sales and use tax pursuant to this Section and R.S. 51:2456(B) shall be processed by the Department of Revenue as follows:

            (aa) A properly completed rebate request shall be submitted to the Department of Revenue on forms provided by the Department of Revenue. For purposes of this Section, a properly completed rebate request shall mean a rebate request that includes the general information required on the face of the request, is signed and includes a copy of the executed incentive contract, a copy of each invoice over fifteen thousand dollars, and all required schedules. The request shall be submitted electronically unless the secretary of the Department of Revenue grants permission to submit the request in an alternate form.

            (bb) Within ten business days of the receipt of a properly completed rebate request, the Department of Revenue shall rebate eighty percent of the total amount claimed for rebate in the rebate request. Within three months of the date of filing the rebate request, the Department of Revenue shall audit the rebate request. During such three-month period, the Department of Revenue shall disallow items determined to be ineligible for rebate. Within ten business days following the expiration of such three-month period, the Department of Revenue shall rebate the remaining twenty percent of the amount claimed on the rebate request less any amounts properly disallowed during the three-month audit period. The Department of Revenue shall make such rebates from the current collections of the taxes collected pursuant to Chapter 2, Chapter 2-A, or Chapter 2-B of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950, as amended. Any sales and use tax rebate issued shall be subject to subsequent audit by the Department of Revenue, and any rebate amount determined to be in excess of that which should have been allowed shall be subject to collection by the Department of Revenue.

            (cc) Failure of the Department of Revenue to timely pay rebates as provided herein shall entitle the taxpayer to interest, which shall begin to accrue three months after the completed rebate request is received at the rate established pursuant to the provisions of R.S. 13:4202. Payments of interest authorized according to the provisions of this Section shall be made from the current collections of taxes collected pursuant to Chapter 2, Chapter 2-A, or Chapter 2-B of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950, as amended.

            (v) Requests for local sales and use tax rebates authorized pursuant to the provisions of this Section and R.S. 51:2456(B) shall be processed in accordance with the provisions of this Item. Within ninety days from the date that a properly completed rebate request submitted by a taxpayer is received by the appropriate local taxing authority, the taxing authority shall review the rebate request and issue a rebate check to the taxpayer for allowed items and shall notify the taxpayer of any disallowed items. For purposes of this Item, a properly completed rebate request shall mean a rebate request that includes the general information required on the face of the request, is signed, and includes a copy of each invoice and all required schedules. Within sixty days from receipt of the notification of disallowed items, the taxpayer shall resubmit a properly completed rebate request for disallowed items to the taxing authority for reconsideration. The time periods for reconsideration of disallowed items in a rebate request shall be the same as the time periods for consideration of the initial rebate request. Rebate requests may be submitted electronically with the approval of the local taxing authority. Failure by a local taxing authority to timely process and pay a local sales and use tax rebate in accordance with the provisions of this Item shall entitle the taxpayer to interest on the amount of the allowed items contained in the properly completed rebate request. Interest shall begin to accrue on the date the properly completed rebate request or reconsideration of disallowed items in a properly completed rebate request is received by the taxing authority at the rate established pursuant to the provisions of R.S. 13:4202.

            (b) A refundable investment income tax credit equal to one and one-half percent of the amount of qualified expenditures. For purposes of this Paragraph, the term "qualified expenditures" shall mean amounts classified as capital expenditures for federal income tax purposes plus exclusions from capitalization provided for in Internal Revenue Code Section 263(a)(1)(A) through (L), minus the capitalized cost of land, capitalized leases of land, capitalized interest, capitalized costs of manufacturing machinery and equipment to the extent the capitalized manufacturing machinery and equipment costs are excluded from sales and use tax pursuant to R.S. 47:301(3), and the capitalized cost for the purchase of an existing building. When a taxpayer purchases an existing building and capital expenditures are used to rehabilitate the building, the costs of the rehabilitation only shall be considered qualified expenditures. Additionally, a taxpayer shall be allowed to increase their qualified expenditures to the extent a taxpayer's capitalized basis is properly reduced by claiming a federal credit. A taxpayer earns the investment tax credit in the year in which the project is placed in service, but the taxpayer may not claim the investment tax credit until the Department of Economic Development signs the project completion report or such other time as provided for by rule or regulation. The project completion report for the refundable investment tax credit shall adhere to the same requirements found in Subparagraph (a) for the sales and use tax rebate.

            (2)(a) Except as provided in Subparagraph (b) of this Paragraph, for a two thousand five hundred dollar tax credit per net new employee as determined by the company's average annual employment reported under the Louisiana Employment Security Law during the taxable year for which credit is claimed. This tax credit may be applied to any state income tax liability or any state corporate franchise tax liability, but not liabilities for penalty or interest, due or outstanding at the time the credit is generated. However, credits may be applied to a due or outstanding tax liability attributable to tax years prior to the year in which the credit is generated only if the tax liability is the result of an assessment, administrative, or judicial proceeding by the Department of Revenue after an audit, provided that no further interest or penalty shall be accrued on such tax liability after the credit is generated. If the entire credit cannot be used in the year claimed, the remainder may be applied against the income tax or corporate franchise tax for the succeeding ten taxable years or until the entire credit is used, whichever occurs first. These credits shall also apply to those tax liabilities, but not liabilities for penalty or interest, identified in tax years where existing contracts generate the credit.

            (b) In lieu of the tax credit provided in Subparagraph (a) of this Paragraph, for aviation or aerospace industries as defined in North American Industry Classification System (NAICS) Code 336411, 336412, 336413, and 332912, for a five thousand dollar tax credit for each new job created. This tax credit may be applied to any state income tax liability or any state franchise tax liability within a ten-year period from the date that the contract becomes effective or until the entire credit is used, whichever occurs first.

            (c) Until June 30, 2009, in lieu of the tax credit provided in Subparagraph (a) of this Paragraph, for the motor vehicle parts manufacturing industry as defined in the 3363 NAICS Code Title, for a five thousand dollar tax credit for each new job created. This tax credit may be applied to any state income tax liability or any state franchise tax liability within a ten-year period from the date that the contract becomes effective or until the entire credit is used, whichever occurs first. As used in this Subparagraph, the term "NAICS" means the North American Industrial Classification System.

            (d) Until June 30, 2012, in lieu of the tax credit provided in Subparagraph (a) of this Paragraph, for the rubber manufacturing industry as defined by NAICS Code 326211, a five thousand dollar tax credit for each new job created. This tax credit may be applied to any state income tax liability or any state franchise tax liability within a ten-year period from the date that the contract becomes effective or until the entire credit is used, whichever occurs first.

            (3) The tax credit provided in Paragraph (2) of this Subsection shall be applicable only to a position within the state that did not previously exist in the business enterprise and that is filled by a person who is a citizen of the United States and who is domiciled in Louisiana, or who is a citizen of the United States and becomes domiciled in Louisiana within sixty days after his employment in such position, performing duties in connection with the operation of the business enterprise as a regular, full-time employee. The total number of credits allowed to a business enterprise for employees who are citizens of the United States and who become domiciled in Louisiana within sixty days after employment shall not exceed fifty percent of the total number of credits allowed to the business enterprise under the contract.

            B. The board may enter into the contracts provided in Subsection A of this Section provided that:

            (1) The business and its contractors give preference and priority to Louisiana manufacturers and, in the absence of Louisiana manufacturers, to Louisiana suppliers, contractors, and labor, except where not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operational efficiency.

            (2)(a) The request for such a rebate of sales and use tax is accompanied by an endorsement resolution approved by the governing body of the appropriate municipality, parish, port district, industrial development board, or other political subdivision or the written approval of the office of sheriff in the case of a law enforcement district, in whose jurisdiction the establishment is to be located. The endorsement resolution or letter of approval is to be submitted by the governing body or sheriff's office within ninety days of receipt of notification that the department has received an advance notification to file an application for benefits under this Chapter. The department shall notify the appropriate local governing body or sheriff's office of receipt of the application by certified mail.

            (b) If the governing body of the appropriate jurisdiction has not submitted an endorsement resolution, written reasons for denial, or a written request for delay of consideration of the application, the board may take unilateral action, for the rebate of sales and use taxes imposed by the state only, in approving or denying the request.

            (c) If there are no local sales and use taxes that can be rebated, as in the event that all such taxes are dedicated, no endorsement resolution shall be required of a local governing authority before the board considers its application for benefits under this Chapter.

            (3)(a) The business certifies that at least fifty percent of its employees meet at least one of the following qualifications:

            (i) Are residents of either:

            (aa) Any enterprise zone in Louisiana, for a business located in an urban enterprise zone or a business not located in either an enterprise zone or an economic development zone.

            (bb) The same parish as the location of the business, or any enterprise zone in Louisiana, for a business located in a rural enterprise zone, an economic development zone, or an enterprise zone in Calcasieu Parish.

            (ii) Were receiving some form of public assistance during the six-month period prior to employment.

            (iii) Were considered unemployable by traditional standards, or lacking in basic skills.

            (b) In addition to the requirements of Subparagraph (a) of this Paragraph, eligibility for a retail business which is assigned a North American Industry Classification Code of 44 or 45 and has more than one hundred employees nationwide including affiliates prior to the contract effective date shall be limited to grocery stores and pharmacies located in an enterprise zone, as such terms are defined by the department by rules promulgated in accordance with the Administrative Procedure Act. Notwithstanding any other provision of law to the contrary, a retail business which is assigned a North American Industry Classification Code of 44, 45, or 722 and whose contract is not entered into before July 1, 2015, shall be ineligible to receive benefits pursuant to the provisions of this Section, unless the related advance notification form was filed before July 1, 2015. If the related advance notification form was filed before July 1, 2015, benefits are available provided the related claim for benefits is filed on or after July 1, 2016.

            (c) The certifications required by Subparagraph (a) of this Paragraph shall be updated annually if the business is to continue receiving the benefits of this Chapter.

            (4)(a) The business makes its request for rebate of sales and use tax or the tax credit either:

            (i) Prior to beginning construction of its building, or any addition or improvement thereon,

            (ii) Prior to installation of the machinery or equipment to be used in the enterprise zone, or

            (iii) Prior to beginning use of customer-owned tooling used in a compression molding process.

            (b) At any time subsequent to the deadlines established in Items (i), (ii), and (iii) of Subparagraph (a), if the board determines that the business was unable, due to good cause, to file the request within the time frame provided, the board may consider a late request, but the business shall have the burden to establish good cause.

            (5)(a) Except as provided in Subparagraph (b) of this Paragraph, the business creates a minimum of the lesser of five net new permanent jobs to be in place within the first two years of the contract period, or the number of net new jobs equal to a minimum of ten percent of the existing employees, minimum of one, within the first year of the contract period.

            (b) A business which has an estimated construction period for its building greater than two years may, for good cause shown, obtain an extension of not more than two years to comply with the requirements of Subparagraph (a) of this Paragraph.

            (c) Provided the business entering the contract provided in Subsection A of this Section is a nonprofit organization organized to finance the development and construction of buildings and infrastructure to serve a public institution of higher education, the new permanent jobs required in Subparagraph (B)(6)(a) of this Section may be created by the public institution of higher education.

            (d) The provisions of this Section shall be applicable to all contracts entered into under the provisions of Subsection A after January 1, 2002.

            C. A transit-oriented development shall be eligible for the contract provided for in Subsection A of this Section only if all of the following conditions are met:

            (1) Advance notification for the development is filed with the department after June 30, 2011, and before January 1, 2012.

            (2) Construction of the development begins no later than one hundred eighty days after the project beginning date stated on the advance notification.

            (3) The development and the business applying for enterprise zone incentives meet all other requirements of the Enterprise Zone Program.

            D. Repealed by Acts 2007, No. 400, §2, eff. July 10, 2007.

            E. The department, in cooperation with the Louisiana Workforce Commission, may enter into agreements with employers located in either urban or rural enterprise zones or in economic development zones under which the employers may receive Workforce Innovation and Opportunity Act funds, to the extent that these funds are received from the federal government.

            F. No governing authority of a political subdivision or sheriff's office shall charge any fee or require any employment practice that conflicts with state or federal law as a precondition to authorizing tax benefits under this Chapter. The governing authority of each political subdivision or sheriff's office shall, after all requirements of this Chapter have been met, promptly rebate any sales and use taxes to the entity entitled to such rebate.

            G. The board, after consultation with the secretaries of the Department of Economic Development and the Department of Revenue, and with the approval of the governor, may enter into agreements with employers located in either urban or rural enterprise zones or in economic development zones under which employers may receive a two-year tax credit for a total of two thousand five hundred dollars for each FITAP participant who is employed full time for a period of not less than two years for compensation which will disqualify such person from continued participation in the FITAP program. This tax credit may be applied to any state income tax liability or any state franchise tax liability and shall be used for the taxable year in which the increase in average annual employment occurred. However, an employee shall be limited to two years participation under the program. No employer shall obtain a credit for more than ten employees in the first year of participation in the program authorized by this Section. Employers shall be eligible for tax credits under the program for ten years.

            H. Repealed by Acts 2007, No. 400, §2, eff. July 10, 2007.

            I. If the collecting agencies receive notice that the rebate or credit, or any part thereof, has ceased by reason of a violation of the terms of the contract under which it was granted, then the amount of the credit for the year in which the violation occurred and for each year thereafter in which the violation is not remedied shall be considered a tax due as of December thirty-first of the year in which the violation occurred, and for each year thereafter in which a credit is used and the violation is not remedied, and it shall be collected by the collecting agencies in the same manner and subject to the same provisions for the collection of other tax debts.

            J. For purposes of filing the application provided for in Paragraph (A)(1) of this Section, the business filing the application, upon request, shall receive a thirty-day extension of time in which to file its application, provided such request for extension is received by the Department of Revenue prior to the expiration of such filing period. The Department of Revenue is also authorized to grant the business an additional extension of time, not to exceed sixty days, in which to file its application provided that the business shows reasonable cause for granting such extension.

            Acts 1995, No. 194, §1, eff. June 14, 1995; Acts 1995, No. 581, §2, eff. June 18, 1995; Acts 1997, No. 624, §1; Acts 1997, No. 1155, §5; Acts 1997, No. 1172, §10, eff. June 30, 1997; Acts 1999, No. 386, §1; Acts 1999, No. 977, §1; Acts 2000, No. 46, §1, eff. July 1, 2000; Acts 2002, No. 36, §2, eff. June 25, 2002; Acts 2003, No. 1203, §1; Acts 2003, No. 1240, §1, eff. July 1, 2003; Acts 2005, No. 388, §1, eff. June 30, 2005; Acts 2005, No. 339, §1, eff. June 30, 2005; Acts 2005, No. 443, §1, eff. July 1, 2005; Acts 2006, No. 844, §1, eff. July 5, 2006; Acts 2007, No. 271, §1, eff. July 6, 2007; Acts 2007, No. 279, §1, eff. July 6, 2007; Acts 2007, No. 400, §§1, 2, eff. July 10, 2007; Acts 2008, No. 720, §§1, 2, eff. July 1, 2008; Acts 2008, No. 743, §7, eff. July 1, 2008; Acts 2011, No. 359, §1, eff. June 29, 2011; Acts 2013, No. 423, §1, eff. June 21, 2013; Acts 2015, No. 114, §1, eff. June 19, 2015; Acts 2015, No. 126, §1, eff. July 1, 2015; Acts 2015, No. 426, §6.

NOTE: See Acts 2013, No. 423, §2, regarding applicability.



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