Louisiana – Competitive Projects Payroll Incentive Program

SALT Report 1568 – The Louisiana State Legislature recently enacted the Competitive Projects Payroll Incentive Program. The program is an expansion of the existing Louisiana Quality Jobs Program, which offers a payroll rebate and either a sales tax rebate or a personal income, corporate income, or franchise tax investment credit.
The bill targets manufacturers of durable goods, pharmaceuticals, conversion of natural gas to various fuels, and data storage services. The expanded program provides additional Louisiana state and local sales and use tax rebates to qualified businesses.
State and Local Sales and Use Tax Rebates
Under the terms of the bill, a “qualified business” is defined as a business certified by the Department of Economic Development as meeting all eligibility requirements and contractually agrees to the terms and conditions of the program.
Qualified businesses will be entitled to the sales and use tax rebate for capital expenditures. Or, in place of a sales and use tax rebate, qualified businesses may choose the project facility expense rebate equal to 1.5% of the capital expenditures for the facility designated in the contract.
Contract Rebate Provisions
Contracts for all qualified businesses will include the following provisions:
  • The maximum percentage of new payroll eligible for the rebate is 15%
  • The number of new jobs, newly created payroll requirements, and any other performance obligations required to remain eligible for participation in the program
  • Designation of the eligible facility or facilities
  • Performance standards, consequences for failure to perform, contract violations, and
  • The term of contract and any additional renewal terms provided at the discretion of the secretary
Eligibility Requirements
A business is eligible for participation in the program if all of the following requirements are met:
  • At least 50% of the total annual sales of the Louisiana business are to out-of-state customers or to in-state customers who will resell the product or service to an out-of-state customer, the federal government, or any combination thereof, and
  • The business offers, or will offer within ninety days of the effective date of qualifying for the incentive rebates a basic health benefits plan to its employees
Qualified Businesses
The business must be primarily engaged in one of the following activities:
  • Manufacturing of automobiles, motorcycles or other passenger vehicles, or components; aircraft or components; spacecraft or components; medical devices; batteries or other power storage devices; motors, engines, turbines or components; environmental control systems; household appliances; computers, computer peripherals or components; communications equipment; audio or video equipment; semiconductors; consumer-oriented electronic devices or components; industrial machinery; or heavy construction equipment such as excavators
  • Manufacturing of pharmaceutical products
  • Conversion of natural gas to diesel, jet fuel, or other refined fuels
  • Data storage or data services – at least 75% of sales must be to out-of-state customers, or
  • Other activities recommended by the secretary and approved by the Joint Legislative Committee on the Budget
Incentive Limitations

Qualified businesses are prohibited from receiving any other incentives administered by the Department of Economic Development for any expenditures or jobs that the taxpayer has received a rebate from the Competitive Projects Payroll Incentive Program.

For Further Information:

Louisiana State Legislature – HB 958