Louisiana Tax Credits Amended in the 2013 Legislative Session

There were many changes to the system of Louisiana tax credits administered by Louisiana Economic Develop in the 2013 Louisiana Legislative Session.  To close out our 2013 Legislative Update series, here are some highlights of changes to the state’s tax credit regime.

Louisiana New Market Jobs Act

In Act No. 265, the legislature enacted the Louisiana New Market Jobs Act.  This Act creates a system for awarding premium tax credits in return for Qualified Equity Investments and Qualified Low-Income Community Investments.  Credits under this program are fully transferable and any unused credits can be carried forward for up to 10 years.  Unlike tax credits governed by the new Tax Credit Registry, taxpayers have 30 days to notify the Department of Insurance about the transfer.  In the event something goes south with the investment generating the credit, the Department of Insurance reserves the right to recapture the credit from the taxpayer holding the credit, even if that is not the person who originally applied for and received the credit.  However, the Department is first required to give six months notice of problems with the credit before recapturing in order to give the taxpayer an opportunity to cure the problem. 

Enterprise Zone

In Act No. 423, the legislature made changes to the Enterprise Zone program.  Whereas the program previously provided credits for part-time employees, now only new full-time employees qualify.  In addition, the Act increased the percentage of employees who must meet the program’s requirements.  Now, 50% of the company’s employees must qualify (business located in enterprise zone, employee received public assistance, employee considered unemployable by traditional standards, or employee lacks basic skills).  Finally, the Act creates a new requirement for retail companies.  Retail companies with 100 or more employees nationally will only qualify for the program if they are a pharmacy or a grocery store.

Rehabilitation of Historic Structures

Act No. 263 amends the tax credit program for the rehabilitation of historic structures.  Now, instead of the credits being administered through the state historic preservation office, the program will be handled by the Department of Revenue and be included in the new Tax Credit Registry.  Additionally, the sunset for the program was extended by two years.  Now, the program will not expire until 2018.

Ports of Louisiana

Finally, Act No. 431 made three changes to the Ports of Louisiana tax credit.  First, the act lowered the price point for qualifying projects.  While projects previously had to have a capital cost of at least $5 million to qualify, projects of at least $1.5 million will now qualify for the program.  Second, the Act expanded the discretion of the Department of Economic Development Commissioner to vary the amount of the credit awarded based on the extent of the positive economic benefit to the state.  This additional discretion is, however, balanced out by a total cap of $2.5 million in credits per project.  Finally, the Act pushed back the sunset date by three years to January 1, 2020.

For more information on tax credits available through the state, see Louisiana Economic Development.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.