In the pipeline this legislative session is a proposed, five-year pilot income and corporate franchise tax credit program for certain capital-intensive manufacturing projects in Louisiana. Sponsored by state Rep. Gary Carter, D-New Orleans, Louisiana Economic Development would grant up-to-50% tax credits-not to exceed $1 million per project-to cover construction costs for new manufacturing facilities costing at least $1.5 million that are located in federally designated qualified Opportunity Zones.
Tax breaks can’t exceed $10 million over the pilot’s five-year lifespan. His effort comes at a time when Louisiana already has the nation’s lowest effective tax rate for capital-intensive manufacturing projects, largely due to the industrial tax exemption program.
The state’s tax competitiveness ranking is likely to drop, considering Gov. John Bel Edwards changed ITEP rules in 2016 and Baton Rouge rejected a pair of ExxonMobil requests earlier this year. Louisiana currently has the nation’s best effective tax rate-0.1%-for new projects for petrochemical and oil and gas companies, according to the Tax Foundation. Still, Carter says he’s intentionally pushing the tax credit program as a pilot so it can be tested out.