The Louisiana Board of Commerce and Industry, which oversees the state’s Industrial Tax Exemption Program, is scheduled to get its first look this week at a new set of uniform guidelines Gov. John Bel Edwards’ administration has worked up to help local governments administer the incentive program.
Louisiana Economic Development Secretary Don Pierson is scheduled to present the rule changes to the board at its regular monthly meeting Wednesday morning.
Earlier this month, Edwards told Daily Report the rule changes, as envisioned, would cap property tax abatements awarded to qualified manufacturers at 80% for 10 years. Local governments would therefore be able to start collecting at least some property tax revenues from year one of the incentive, while manufacturers would have an element of much-needed predictability as to their state tax liability.
“What we’re trying to do is to make it easier not only on the local taxing authorities but on the companies so they know what they’re eligible to get when they’re applying,” Edwards told Daily Report. “This would bring them more predictability and certainty.”
The proposed ITEP rule changes come more than 18 months after Edwards upended what had been one of industry’s most lucrative tax incentives by giving local governing authorities more say over whether to grant the abatements. Prior to that, the state routinely exempted plants from paying property taxes, thereby depriving local governments of badly needed revenues.
Since Edwards’ 2016 executive order, local governments—including a committee of Capital Region representatives of the Metro Council, school board and sheriff’s office—have been grappling, with varying degrees of success, with how to evaluate ITEP applications and award exemptions.
Early this year, amid growing concern from the business community that the confusion and lack of action at the local level was harming the state’s economic competitiveness, the state started working on a set of rules for all 64 parishes that local taxing authorities could follow.
While Pierson will present the new rules Wednesday, the C&I board is not expected to approve them immediately. Robert Adley, who chairs the board’s rules committee, says his committee will need to meet several times before finalizing them.
“It’s going to take months for them to finally pass,” he predicts.
In the meantime, Metro Councilman Matt Watson is moving forward with plans to introduce a set of guidelines that would help determine whether ITEP applicants should be granted tax abatements in East Baton Rouge Parish.
Watson says his proposed rules, which he will introduce at Wednesday’s council meeting, will not contradict those being put forward by LED.
“The state is now setting the guidelines for what the abatement levels should be,” he says. “But we still need rules to help us determine whether to grant the abatements in the first place.”
The C&I board meets at 9:30 a.m. Wednesday at the LaSalle Building, 617 N. Third St.
