Tax & Accounting Blog

Louisiana Proposes Exemption For Non-Manufacturing Businesses

ONESOURCE, ONESOURCE Property Tax July 26, 2012

In November, Louisiana businesses that are considered non-manufacturing face changes under a proposed constitutional amendment contained in L. 2012, H674. The proposed  amendment would authorize the State Board of Commerce and Industry to grant ad valorem tax exemption contracts to targeted non-manufacturing businesses located in parishes that choose to participate in a program established for the granting of such contracts. The tax exemption would be available for property owned or leased by, and used by, such businesses in the operation of their facilities, including buildings, improvements, equipment, and other property necessary or beneficial to such operation, pursuant to the exemption contract and the governing program.

Companies that are considered “non-manufacturing” meet the following criteria: a business that makes at least 50% of its total annual sales from a Louisiana site or sites to out-of-state customers or buyers, to in-state customers or buyers if the purchaser resells the product or service to an out-of-state customer or buyer for ultimate use, or to the federal government, or any combination thereof. The business also must undertake a project to establish a new or expanded facility in Louisiana, and its primary activities at the facility must be among the following targeted non-manufacturing business activities: corporate headquarters, distribution facilities, data services facilities, research and development operations, and digital media and software development centers. Within the time period provided in the contract, the business would make capital expenditures of at least $25 million for the facility, and create and maintain at least 50 new direct jobs.