Industrial Tax Exemption
The Hayes Companies, Pineville
LED-Incentives_Industrial_Hayes-1920x540
Starting in July 2018, all forms and documents related to this program must be submitted online via the next generation of FastLane. Therefore, we will no longer be accepting paper forms after June 25th. Any documents received after that date will be mailed back to the sender.


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

Getting started is just a click away. Submit advance notification and pay online using FastLane prior to construction, hiring, and/or making purchases toward the project's capital investment.

View fees associated with this incentive. View fees associated with this incentive. 

*Fees are nonrefundable

  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. Application must be filed online with Louisiana Economic Development (LED) within 12 months of the estimated project end date as stated in the advance notification.
  3. Estimated Project End Date as stated in the advance notification may be amended by the applicant if the amendment is requested prior to the estimated project end date.
  4. Advance Notification once submitted LED will review for eligibility. Projects deemed routine maintenance, repairs, environmentally required, or do not provide for job creation or retention will not be considered by the Board of Commerce and Industry. A compelling reason for job retention is required if no jobs are being created, but are being retained.
  5. Confirmation email will be sent upon completed review of advance.

*Note: For Advance Notifications filed before July 1, 2018, applicants may elect to follow the incentive process found here.


Next Steps

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

  1. Begin Project. Includes construction, purchase of equipment, building and materials, hiring, and other capital investment transactions.
  2. 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.
  3. 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 the request for extension is received prior to the filing deadline.
  4. Contract Affidavit must be completed, signed and notarized. Affidavit with original signatures must be uploaded as an attachment to the application. Without affidavit, the application cannot can be presented to the Board of Commerce and Industry. The affidavit allows an explanation of its responses, if necessary. No action will be 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.
    Note: If you are a consultant and filing on behalf of a company, you must complete and submit the Disclosure Authorization form via FastLane.
  5. Application Review. Upon receipt of application, affidavit and fee, LED will review application for compliance, verify submitted information, and provide a copy of the application for review to the Louisiana Department o Revenue (LDR). Upon approval by LDR, application is presented for consideration to the Board of Commerce & Industry. Applicants will be notified by email within seven days of their scheduled board meeting.
  6. Cooperative Endeavor Agreement (CEA). (Exhibit “A”) includes a fully executed CEA specifying the terms and conditions of the exemption contract between the state, Louisiana Economic Development and the applicant.
  7. Board Review. Upon application verification by LED, 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. Upon Board approval, within three business days, LED will forward a copy of the approval and Exhibit A to local governmental authorities, the assessor, and approval will be posted on the LED 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, the local governing authorities may put the application on a public meeting agenda notice and shall notify LED within three business days.
    • Local governmental entities placing the application on a public meeting agenda will have an additional 30 days (for a total of 60 days from start of notice period) to conduct a public meeting issuing a resolution approving or rejecting 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 the entity.
  9. Contract. Upon application approval by the Board of Commerce & Industry, a contract will be sent electronically from LED to the designated contract signatory via Adobe Sign. Contract should be reviewed and signed, 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 with the Governor’s signature will be emailed to you.
  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 of 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. Annual Report. This form is due by May 1 of the year following board action.
  13. 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. The affidavit with original signatures must be uploaded as an attachment to the renewal application. Upon LED receipt of the completed renewal application and attached affidavit, the renewal application will be presented to the Board of Commerce and Industry. The affidavit allows an explanation of its responses, if necessary. No action will be 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.