Industrial Tax Exemption
The Hayes Companies, Pineville
LED-Incentives_Industrial_Hayes-1920x540

Effective June 24, 2016, changes apply to the Industrial Tax Exemption Program, pursuant to an Executive Order from the Louisiana Governor’s Office. View the Executive Order here.

The Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP) is an original state incentive program which offers an attractive tax incentive for manufacturers within the state. With local approval, the program provides up to a 100% property tax abatement for an initial term of up to five years and the option to renew for up to three additional years at up to 80% property tax abatement on a manufacturer’s qualifying capital investment related to the manufacturing process.


Eligibility

Businesses must be classified as a manufacturer or related to the manufacturing project in order to receive the benefits of the ITEP program. ITEP is only available for activities related to manufacturers.

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 is 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

Submit your advance notification and pay online before you start construction, hire, and/or make purchases towards the project's capital investment.

Secure all necessary local endorsements (Exhibit B’s) and provide these endorsements to LED.

View sample local endorsement resolutions and letters here:

Execute a Cooperative Endeavor Agreement (CEA), also referred to as Exhibit A, with the State.

Submit your program application and all required exhibits on FastLane with fee no later than 90 days after your project completion date.


Next Steps

After LED's Business Incentive department receives your advance notification and fee, you are now ready to start your project:

  • Begin your project. This includes construction, purchase of equipment, building and materials items, hiring and other capital investment transactions.
  • File for an Unemployment Insurance Identification Number (if you do not have one). Contact the Louisiana Workforce Commission at 225.342.3171 to apply for an unemployment identification number. They will also assign a North American Industrial Classification System (NAICS) code to your company. This will identify the type of activities that occur at the site.
  • Secure all necessary local endorsements (Exhibit “B”) and provide these endorsements to LED. An Exhibit “B” consists of a letter from the sheriff, resolutions adopted by the parish governing authority, the school board, and any municipality in which the facility is located, if required, approving the project.
  • Enter into a Cooperative Endeavor Agreement (CEA), also referred to as Exhibit “A”. An Exhibit “A” consists of a fully executed CEA between the state, Louisiana Economic Development and the applicant specifying the terms and conditions of the exemption contract.
  • Submit your program application. Submit your application and all required exhibits on FastLane with fee no later than 90 days after your project completion date.
    • The contract affidavit must be completed, signed and notarized. This affidavit with original signatures must be mailed and received by LED before the application can be presented to the Board of Commerce and Industry. The affidavit allows an explanation of its responses, if necessary. There will be no action taken by the Board of Commerce and Industry based upon the information contained in the affidavit without notice and the opportunity to appear before the Board.
    • If you are a consultant and filing on behalf of a company, you must complete and submit the Disclosure Authorization Form.
  • Review of application. Once LED receives your application, fee, exhibits, and affidavit, the office staff will review for compliance and provide a copy of the application to the Louisiana Department of Revenue (LDR) for review. Applications will not be presented to the board until a letter of no objection is received. After all information is verified, LED will present your application to the Board of Commerce and Industry for consideration. Applicants will be notified within 14 days of their scheduled board meeting.
  • Board review. Your application is presented to the Board of Commerce and Industry for consideration. The board convenes every other month, meeting six times per calendar year.
  • Contract Issuance. After an application is approved by the Board of Commerce and Industry, the contract will be sent to you for signatures.
  • Submit Project Completion Report. File with LED within 90 days after the beginning of operations, completion of construction or receipt of the fully executed contract, whichever occurs last. This report requires a $250 fee.
  • Submit Affidavit of Final Cost. File with LED within six months of the beginning of operations, completion of construction or within 90 days of the receipt of the executed contract, whichever occurs last. This affidavit requires a $250 fee.
  • Annual Report. This form is due by May 1 of the year following board action.
  • Contract Renewal Request. A Contract Renewal Request and Contract Affidavit must be submitted to LED not more than six months before and not later than, the expiration of the initial five year contract.
    • The contract affidavit must be completed, signed and notarized. This affidavit with original signatures must be mailed and received by LED before the application can be presented to the Board of Commerce and Industry. The affidavit allows an explanation of its responses, if necessary. There will be no action taken by the Board of Commerce and Industry based upon the information contained in the affidavit without notice and the opportunity to appear before the Board.

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 cooperative endeavor agreement (CEA) between the state, Louisiana Economic Development, and the applicant specifying the terms and conditions of the exemption contract. It will be drafted by LED after Exhibit B resolutions and letters are received.

To obtain Exhibit A, receive your Exhibit B resolutions and letters from the locals and submit them to LED.  LED will draft the Exhibit “A” which will be returned to the company for signature. After all required signatures are obtained, the CEA will be sent to the Division of Administration for approval.

Q: What is Exhibit “B” and how do I obtain Exhibit “B”?
A: Exhibit “B” are resolutions adopted by the parish governing authority (speaking on behalf of the parish and all parish bodies who are located outside the boundary of the affected municipality, where applicable, who receive a millage), the school board, and any municipality (speaking on behalf of the municipality and all municipal bodies who receive a millage) and a letter from the sheriff approving the project in which the manufacturing establishment is or will be located signifying whether each of these authorities is in favor of the project.

To obtain Exhibit B, contact the local governing authorities directly, or contact your local economic development officials.  

Q: If my advance was filed on or prior to June 24, 2016, are these exhibits required?
A: No, only those applications with an advance notification filed after June 24, 2016, are subject to the 2017 rules changes.  

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 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, 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.

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.