Industrial Tax Exemption
The Hayes Companies, Pineville
LED-Incentives_Industrial_Hayes-1920x540
As of July 2018, all forms and documents related to this program must be submitted online via the next generation of FastLane.

Industrial Tax Exemption Program

The Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP) is an original state incentive program, which offers an attractive tax incentive for manufacturers who make a commitment to jobs and payroll in the state. With approval by the Board of Commerce and Industry and local governmental entities, the program provides an 80% property tax abatement for an initial term of five years and the option to renew for five additional years at 80% property tax abatement on a manufacturer’s qualifying capital investment related to the manufacturing process in the state. 

Manufacturers who filed Advance Notification after June 24, 2016 and prior to July 1, 2018 have the option of proceeding under the 2017 rules.  To review the process, click here.


Eligibility

Businesses must be classified as a manufacturer or related to the manufacturing project at the project site in order to receive benefits of the ITE Program.

A manufacturer, as identified by the federal government, has a North American Industry Classification System (NAICS) code that begins with 31, 32 or 33. The NAICS is used as a preliminary qualification criterion. A detailed description of the activities to be considered manufacturing must be provided by the company.

The program can be used by manufacturers new to Louisiana and is also available to existing manufacturers in Louisiana with new investments to existing facilities.

Program Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.


Getting Started

  1. Advance Notification. Submit advance notification and pay online using FastLane prior to construction, hiring, and/or making purchases toward the project's capital investment.
  2. Initial Review.  Once submitted, the advance notification will be reviewed for completion. Projects deemed routine maintenance, repairs, environmentally required, or do not provide for job creation will not be considered by the Board of Commerce and Industry. A compelling reason for job retention will be required if no jobs are being created, but are being retained.
  3. Confirmation. Email will be sent upon completed review of advance.
  4. Expiration.  Advance notification expires unless an application is filed online with Louisiana Economic Development (LED) within 12 months of the estimated project end date as stated in the advance notification, which can be amended if requested before the project end date.

Next Steps

Upon LED’s receipt of the advance notification and fee, the project may begin following these steps:

  1. Unemployment Insurance Identification Number. Contact the Louisiana Workforce Commission to apply for an unemployment identification number. A North American Industrial Classification System (NAICS) code will be assigned to your company to identify the type of activities occurring at site.
  2. Program Application. Application is to be submitted online in FastLane no later than 90 days after start of operations or end of construction, whichever occurs first. Failure to file application within the prescribed timeframe will result in expiration of the Advance Notification.
    Note: LED may grant an extension of up to six months for the filing of an application, provided that the request for extension is received prior to the filing deadline.
  3. Contract Affidavit must be completed, signed and notarized. Affidavit with original signatures must be uploaded as an attachment to the application.
    Note: If you are a consultant and filing on behalf of a company, you must complete and submit the Disclosure Authorization form via FastLane.
  4. Application Review. Upon receipt of application, affidavit and fee, LED will review the application for compliance, verify submitted information, and provide a copy of the application for review to LDR.
  5. LDR Review.  LDR reviews the application and must issue a letter-of-no-objection or a letter-of-approval prior to the application’s presentation to the Board of Commerce & Industry (“Board”) for consideration.  
  6. Exhibit A. Exhibit A is the agreement between LED and the applicant specifying the terms and conditions of the granting of the exemption contract.  Exhibit A must be fully executed prior to the application’s presentation to the Board for consideration.
  7. Board Review. Upon meeting the above requirements, the application is presented to the Board of Commerce and Industry for consideration. Applicants will be notified by email within seven days of scheduled board meeting. The board convenes every other month, meeting six times per calendar year.
  8. Local Approval. Within three business days of Board approval, LED will forward approved application and Exhibit A to local governmental authorities, the assessor, and notice of the approval will be posted on the LED Board website. The posted date will begin the 30-day period for the local governing authorities to initiate action to approve or reject the board’s action.
    • Within the 30-day period, a local governing authority may put the application on a public meeting agenda notice and LED shall be notified of this action within three business days.
    • Local governmental entities who provide LED timely notice that an application has been placed on a public meeting agenda will have an additional 30 days (for a total of 60 days from start of notice period) to approve or deny the board-approved application, and shall notify LED of the action within three business days.
    • If a local governmental entity does not take action or provide notice as required in the ITEP rules, the application will be deemed approved by that entity.
  9. Contract. Upon application approval by the local governmental entities, a contract will be sent electronically from LED to the designated contract signatory via Adobe Sign within 30 days of receipt. Please note, on the signature page, the company contact refers to an employee of the company. A fully executed contract by the Board and the Governor will be emailed to you.
    For contracts executed prior to the beginning of operations or end of construction of the project, an annual report must be filed by December 31 of the year following board action.
  10. Project Completion Report and Fee. File with LED within 90 days of the start of operations, completion of construction, or receipt of the fully executed contract, whichever occurs last.
  11. Affidavit Final Cost and Fee. File with LED within six months of the start of operations, completion of construction or within 90 days of the receipt of the executed contract, whichever occurs last.
  12. Contract Renewal Request. Renewal application and contract affidavit must be submitted online not more than six months before, and not later than, expiration of the initial five-year contract. Eligibility of the applicant and the property for renewal will be reviewed using the same criteria that was used for the initial contract and consideration will be based upon the applicant’s performance during the initial term of the contract. Upon LED receipt and review of the completed renewal application and attached affidavit, the renewal application will be presented to the Board. The Board has the option of submitting an approved renewal application to the local governmental entities for approval in accordance with the procedures for approval of the initial exemption contract.   


Eligibility Scenarios

Q:  Am I eligible to continue my tax exemption contract if our facility shuts down due to current market conditions?
A:  If this is a temporary shutdown, the Board of Commerce and Industry may allow the contract to continue for an additional year with the approval from local taxing authorities, as well as updates on the status of your facility.

Q:  Will I be eligible for the program if my manufacturing company purchases another manufacturing company, which has a tax exemption contract?
A:  A Transfer of Contract form will need to be filed for all active contracts. Once approved, all the remaining years of those contracts will be transferred to the new owner.

Q:  If I own a new building in which a manufacturer will be operating, am I eligible for the program?
A:  You may be eligible for the exemption as a company affiliated with a manufacturer.

Q:  Are all assets at the manufacturing site eligible for the exemption?
A: No, only assets directly involved in the manufacturing process are eligible. Administrative buildings, storage and warehouses, and the land that the manufacturing facility is located, are not eligible for the exemption.


FAQs

Q: What is Exhibit “A” and how do I obtain Exhibit “A”?
A: Exhibit “A” is a fully executed agreement between the department and the applicant specifying the terms and conditions of the granting of the exemption contract.

To obtain Exhibit “A”, LED must first receive and review the application and LDR must subsequently review and issue a letter-of-no-objection or a letter-of-approval. Upon receiving, LED will draft the Exhibit “A” which will be returned to the company for signature. After all required signatures are obtained, the Exhibit “A” may be sent to the Division of Administration for approval.

Q: What types of jobs are eligible to be considered new jobs?
A: New jobs must be permanent, full-time, based at the manufacturing site, and may be employed directly, by an affiliate, or through qualified contract labor. Construction jobs are not considered new jobs.

Q: My company currently has an active ITE contract. What is required to transfer the contract or specific assets relate to a contract?
A: Amendments to contracts must be approved by the Board. The appropriate form must be filed. For contracts with Advance Notifications filed after June 24, 2016, local endorsement is necessary if the parish in which the contract is located changes.

Q: What happens if a company, with an active ITE contract, changes their name or changes the location of the contract site?
A: Amendments to contracts must be approved by the Board. The appropriate form must be filed. For contracts with Advance Notifications filed after June 24, 2016, local endorsement is necessary if the parish in which the contract is located changes.

Q: When does my contract become active?
A: For all parishes except Orleans, the contract effective date is December 31 of the year in which the assets become operational or complete. For Orleans Parish, the contract effective date is July 1 of the year in which the assets become operational or complete.

Q: Can my contract be renewed?
A: If the Advance Notification was filed on or prior to June 24, 2016, your contract may be renewed for 5 years at 100% abatement. If the Advance Notification was filed after June 24, 2016 and before July 1, 2018, Exhibits “A” and “B” will determine the length and terms of renewal. These contracts may be renewed for up to three years at up to 80% abatement. If the Advance Notification was filed on or after July 1, 2018, your contract may be renewed for 5 years at 80% abatement.

Q: Is a site inspection by LED required and what will happen during the inspection?
A: A site inspection may be performed by LED to determine if the activity at the site is considered manufacturing. LED will want to see specific assets that are being exempted by the contract and an overview of the manufacturing process.

Q: What are the fees associated with applying for the Industrial Tax Exemption Program?
A: The fees associated with the Industrial Tax Exemption can be found here.

Q: Who is the Board of Commerce & Industry?
A: The Board is composed of individuals appointed by the governor of Louisiana, who review and approve applications for certain tax incentive programs, including Enterprise Zone, Industrial Tax Exemption, Quality Jobs and Restoration Tax Abatement.