A ‘totally new’ ITEP process is in the works

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At its meeting Tuesday, the Louisiana Board of Commerce and Industry will consider sweeping changes to the state’s Industrial Tax Exemption Program.

Under ITEP, eligible manufacturers are offered an 80% property tax abatement for up to 10 years on new investments and capitalized additions. The program is designed to incentivize companies to invest in Louisiana.

The changes to be considered were proposed by local industry consulting firms and come as a result of an executive order signed by Gov. Jeff Landry in February. That order did away with rules requiring businesses participating in ITEP to prove they will create and retain local jobs, among other changes.

The proposal to be put before the Board of Commerce and Industry on Tuesday outlines a “totally new process” for ITEP participation that backers say is intended to streamline the program.

Notably, should the proposed changes go into effect, advance notice would no longer be required for those planning to seek an exemption. Current rules require companies looking to participate in ITEP to file an advance notification of their intent to apply for an exemption. Once submitted, the notification is reviewed to ensure that the investment in question meets the requirements of the program. Only then can a formal application be submitted.

The new process would allow a company to submit an application without filing an advance notification, though that application would be “prospective only,” just as advance notifications currently are. Only assets placed in service after an application has been submitted would be considered for exemption.

Among the other new rules to be considered:

  • Shortening the application process from 90-plus days to about 45 days.
  • Allowing applicants with 50 or fewer employees to apply for a 100% property tax abatement in an effort to boost small businesses.
  • Allowing applicants with 50 or more employees that plan to spend $1 billion or more over the span of three or more consecutive years to apply for a 93% property tax abatement under certain conditions.
  • Eliminating project completion reports for incomplete projects.
  • Doing away with affidavits of final cost in favor of “annual lists of exempt assets.”

At the Board of Commerce and Industry’s April 24 meeting, Board Chairman Jerry Jones expressed his intent to move “aggressively” to finalize a new set of rules by the board’s August meeting. Read the full proposal here.