2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:6036. Ports of Louisiana tax credits

RS 47:6036 - Ports of Louisiana tax credits
A. Purpose. The primary purpose of this Section is to encourage private investment in and the use of state port facilities in Louisiana. Because public funding sources for ports and port infrastructure facilities have not kept pace with the need to expand our ports and port facilities, it is determined that private investment and public-private partnerships should be encouraged as a means to assist the state in financing improvements to our state ports and port infrastructure facilities. The development, improvement, expansion, and maintenance of the state's ports and port infrastructure facilities, and the utilization of public port facilities for the import and export of their cargo to or from distribution, manufacturing, fabrication, assembly, processing, or warehousing sites in Louisiana, are essential to Louisiana's economic health and the ability of business and industry associated with the maritime industry to compete cost effectively on a regional, national, and global scale.
B. Definitions. For purposes of this Section, the following words shall have the following meanings unless the context clearly indicates otherwise:
(1) "Breakbulk cargo" shall mean machinery, equipment, materials, products, or commodities, including but not limited to palletized or unpalletized bagged, packaged, wrapped, drummed, baled, or crated goods and commodities. Breakbulk cargo shall mean offshore drilling platforms and equipment. Breakbulk cargo shall not include any liquid or dry commodities that are handled in bulk.
(2) "Capital costs" shall mean and include all costs and expenses paid after July 1, 2013, by one or more investing companies in connection with the acquisition, construction, installation, and equipping of a qualifying project during the period commencing with the date on which the acquisition, construction, installation, and equipping commences and ending on the date on which the qualifying project is placed in service. Capital costs shall include, but not be limited to the following:
(a) The costs of acquiring, constructing, installing, equipping, and financing a qualifying project, including all obligations incurred for labor and to contractors, subcontractors, builders, and materialmen.
(b) The costs of acquiring land or rights in land and any cost incidental thereto, including recording fees.
(c) The costs of contract bonds and of insurance of any kind that may be required or necessary during the acquisition, construction, or installation of a qualifying project.
(d) The costs of architectural and engineering services, including test borings, surveys, estimates, plans, and specifications, preliminary investigations, environmental mitigation, and supervision of construction, as well as for the performance of all the duties required by or consequent upon the acquisition, construction, and installation of a qualifying project.
(e) The costs associated with installation of fixtures and equipment; surveys, including archaeological and environmental surveys; site tests and inspections; subsurface site work; excavation; removal of structures, roadways, cemeteries, and other surface obstructions; filling, grading, paving, and provisions for drainage, storm water retention, installation of utilities, including water, sewerage treatment, gas, electricity, communications, and similar facilities; off-site construction of utility extensions to the boundaries of the property.
(f) All other costs of a nature comparable to those described, including but not limited to all project costs required to be capitalized for federal income tax purposes pursuant to the provisions of 26 U.S.C. 263(A).
(g) Costs otherwise defined as capital costs incurred by the investing company where the investing company is the lessee under a lease that contains a term of not less than five years and is characterized as a capital lease for federal income tax purposes. Capital costs shall not include property owned or leased by the investing company or a related party before the commencement of the acquisition, construction, installation, or equipping of the qualified project unless such property was physically located outside the state for a period of at least one year prior to the date on which the qualifying project was placed in service.
(3) "Containerized cargo" shall mean any machinery, equipment, materials, products, or commodities including but not limited to containers which are rigid, sealed, reusable metal boxes in which merchandise is shipped by vessel, truck, or rail.
(4) "Import cargo" and "export cargo" shall mean any breakbulk or containerized cargo brought to the state of Louisiana from a foreign country or from the state of Louisiana to a foreign country.
(5) "International business entity" shall mean a taxpayer corporation, partnership, limited liability company, or other commercial entity, all or a portion of whose activities involve the import or export of breakbulk or containerized cargo to or from manufacturing, fabrication, assembly, distribution, processing, or warehousing facilities located within Louisiana.
(6) "Investing company" shall mean and include any corporation, partnership, limited liability company, proprietorship, trust, or other business entity, regardless of form, making a qualified investment.
(7) "Oceangoing vessel" shall mean any vessel, ship, barge, or watercraft that floats, including offshore oil exploration platforms.
(8) "Port or port and harbor activity" means trade or business activity conducted on premises in which a duly recognized port authority has an ownership, leasehold, or other possessory interest and such premises are used as part of the operations of a duly recognized port authority, which is a trade or business described in the 2012 North American Industry Classification System (NAICS) within Subsector 493 (Warehousing and Storage), Industry Number 488310 (Port and Harbor Operations), or Industry Number 488320 (Marine Cargo Handling), Industry Number 336611 (Ship Building and Repair), Industry Number 213112 (Support Activities for Oil and Gas Operations), including the above trades and businesses as they may hereafter be reclassified in any subsequent publication of the NAICS or similar classification system developed in conjunction with the United States Department of Commerce and Office of Management and Budget.
(9) "Project" shall mean and include any land, building, or other improvement, and all real and personal properties deemed necessary or useful in connection therewith, whether or not previously in existence, located or to be located in a public port of this state.
(10) "Public port" shall mean any deep-water port commission or port, harbor and terminal district as defined in Article VI, Section 44 of the Constitution of Louisiana, and any other port, harbor, and terminal district established under Title 34 of the Louisiana Revised Statutes of 1950.
(11) "Qualified cargo" shall mean any breakbulk or containerized machinery, equipment, materials, products, or commodities owned by an international business entity which are imported or exported to or from a manufacturing, fabrication, assembly, distribution, processing, or warehouse facility located in Louisiana and which are so moved by way of an oceangoing vessel berthed at a public port facility during the taxable year.
(12) "Qualifying investment" shall mean and include the undertaking by one or more investing companies of a qualifying project.
(13) "Qualifying project" shall mean and include a project to be sponsored or undertaken by a public port and one or more investing companies that has a capital cost of not less than one and one-half million dollars and at which the predominant trade or business activity conducted will constitute warehousing or port and harbor operations and cargo handling, including any port or port and harbor activity. However, "qualifying project" shall not mean bulk liquid or gas facilities.
(14) "Ton" shall be a net ton of two thousand pounds and in the case of containerized cargo it shall exclude the weight of the container.
C. Investor tax credit.
(1)(a) There are hereby authorized the following credits against state income and corporate franchise tax:
(i) An investor tax credit as provided for in Subsections A through H of this Section for the total capital costs of a qualifying project in the manner and according to the provisions of those Subsections.
(ii) An Import Export Cargo Credit as provided for in Subsection I of this Section in the manner and according to the provisions of that Subsection.
(b) The investor tax credit provided for in this Subsection shall be granted by the Department of Economic Development for a qualifying project if the commissioner of administration, after approval of the Joint Legislative Committee on the Budget certifies to the secretary of the department that securing the project will result in a significant positive economic benefit to the state. "Significant positive economic benefit" means net positive tax revenue that shall be determined by taking into account direct, indirect, and induced impacts of the project based on a standard economic impact methodology utilized by the commissioner, and the value of the credit, and any other state tax and financial incentives that are used by the department to secure the project. If the commissioner with the approval of the committee so certifies, then the Department of Economic Development may grant a tax credit equal to seventy-two percent of the total capital costs of such qualifying project to be taken at five percent per tax year or shall grant such other amount of tax credit to be taken at such other percentage which is warranted by the significant positive economic benefit determined by the commissioner, but no tax credit granted for a qualifying project shall exceed one million eight hundred thousand dollars per tax year. However, the total amount of tax credits granted on a qualifying project shall not exceed the total cost of the project. In addition, the investor tax credits granted by the department to any recipient pursuant to this Section shall be limited to an amount which shall not result in a reduction of tax liability by all recipients of such credits to exceed four million five hundred thousand dollars in any fiscal year.
(c) Any tax credits granted pursuant to Subparagraph (b) of this Paragraph shall be earned by investors at the time expenditures are made by an investing company; however, such tax credits shall not be applied against a tax liability before July 1, 2014, and not until capital cost expenditures are certified by the department. The Department of Economic Development shall certify capital cost expenditures no less than twice during the duration of the qualifying project unless the investing company agrees, in writing, to reimburse the Department of Economic Development for the costs of any additional certifications.
(2) Prior to issuance of any tax credit pursuant to the provisions of this Subsection, a cooperative endeavor agreement shall be fully executed between the investing company or entity proposing the qualifying project and the public port in whose geographic jurisdiction the proposed qualifying project is to be located indicating cooperation and support among all of the parties. Failure to fully execute the cooperative endeavor agreement shall render the qualifying project ineligible for the tax credit authorized by this Subsection.
(3) If the tax credit allowed pursuant to this Subsection exceeds the amount of taxes due for such tax period, then any unused credit may be carried forward as a credit against subsequent tax liability for a period not to exceed ten years.
(4) Application of the credit.
(a) All entities taxed as corporations for Louisiana income tax purposes shall claim any credit allowed under this Subsection on their corporation income tax return.
(b) Individuals, estates, and trusts shall claim any credit allowed under this Subsection on their income tax return.
(c) Entities not taxed as corporations shall claim any credit allowed under this Subsection on the returns of the partners or members as follows:
(i) Corporate partners or members shall claim their share of the credit on their corporation income tax returns.
(ii) Individual partners or members shall claim their share of the credit on their individual income tax returns.
(iii) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
D. Certification and administration.
(1) The secretary of the Department of Economic Development shall determine through the promulgation of rules and regulations in accordance with the Administrative Procedure Act, which projects and capital cost expenditures, including amounts expended in this state on qualifying projects, qualify for tax credits. The Department of Economic Development shall take the following factors into consideration when determining which projects qualify:
(a) The economic impact of the qualifying project on similar or existing publicly owned or privately owned projects located within fifty miles of the qualifying project. The Department of Economic Development may require the investing company or entity proposing the qualifying project to conduct a public meeting, properly noticed in accordance with the open meetings law, in the geographic area the proposed project is to be located.
(b) The impact of the qualifying project on the immediate and long-term objectives of the tax credit provided for such investment.
(c) The impact of the qualifying project on the employment of Louisiana residents.
(d) The impact of the qualifying project on the overall economy of the state.
(e) The availability of similar infrastructure or facilities within fifty miles of the proposed qualifying project.
(2)(a) Application. An applicant for the ports of Louisiana investor tax credit shall submit an application for initial certification of the qualifying project to the Department of Economic Development that includes the following information:
(i) A preliminary budget including the actual or if not known, the estimated capital costs of the qualifying project and the qualifying project's estimated Louisiana payroll.
(ii) A detailed description of the qualifying project.
(iii) A statement that the proposed project will qualify as a qualifying project.
(iv) Estimated start and completion dates. The estimated start date shall include the estimated date on which the acquisition, construction, installation, or equipping of the qualifying project was commenced or is expected to commence.
(v) The name of each investing company, or the name or names of its shareholders, partners, members, owners, or beneficiaries to become entitled to the tax credit.
(vi) Any other information required by the Department of Economic Development.
(b) If the application is incomplete, additional information may be requested prior to further action by the Department of Economic Development.
(c) The Department of Economic Development shall submit its initial certification of a project as a qualifying project to the investing company and to the secretary of the Department of Revenue. The initial certification shall include a unique identifying number for each qualifying project, the total amount of tax credits issued for the capital costs of the qualifying project, and the amount to be taken at five percent per tax year.
(d) Prior to any certification of a qualifying project, the investing company shall submit to the Department of Economic Development a cost report of project expenditures which the Department of Economic Development may require to be prepared by an independent certified public accountant. Additionally, the Department of Transportation and Development shall inspect the construction site of the qualifying project and shall verify that the capital costs expenditures for which the investing company is applying for tax credits has been expended by the investing company. The Department of Economic Development shall review such expenditures and shall issue a tax credit certification letter to the investing company indicating the amount of tax credits certified for the state-certified qualifying project and the amount to be taken at five percent per tax year.
(3) The secretary of the Department of Economic Development, in consultation with the Department of Revenue, shall promulgate rules and regulations in accordance with the Administrative Procedure Act as are necessary to carry out the intent and purposes of the tax credit for port investors. All rules promulgated to implement the provisions of the tax credit for port investors shall be subject to oversight and approval by the House Ways and Means Committee and the Senate Committee on Revenue and Fiscal Affairs.
(4) Any taxpayer applying for the credit shall be required to reimburse the Department of Economic Development for any audit required in relation to granting the credit.
(5) Repealed by Acts 2010, No. 1034, §3.
E. Recapture of credits.
If the Department of Economic Development finds that funds for which an investing company received credits according to the provisions of Subsection C of this Section are not invested in and expended with respect to capital costs of a qualifying investment, the investing company's state income tax for such taxable period shall be increased by an amount necessary for the recapture of credit provided by Subsection C of this Section.
F. Recovery of credits by the Department of Revenue.
(1) Credits previously granted to a taxpayer, but later disallowed, may be recovered by the Department of Revenue through any collection remedy authorized by R.S. 47:1561 and initiated within three years from December thirty-first of the year in which the credits were earned.
(2) The only interest that may be assessed and collected on recovered credits is interest at a rate of three percentage points above the rate provided in R.S. 9:3500(B)(1), which shall be computed from the original due date of the return on which the credit was taken.
(3) The provisions of this Subsection are in addition to and shall not limit the authority of the secretary of the Department of Revenue to assess or to collect under any other provision of law.
G. Termination of investor and import-export cargo tax credits.
The provisions of Subsections C and I of this Section shall be effective until July 1, 2025, and no investor tax credit or import-export cargo tax credit pursuant to the provisions of this Section shall be granted with respect to any application received and approved after this date.
H. No new employees shall be hired by the Department of Economic Development for the implementation of the investor tax credit provided for in this Section.
I. Import-export cargo tax credit.
(1) Certification of taxpayer. Only those taxpayers who have received certification from the secretary of the Department of Economic Development shall be eligible to take the tax credits provided for by this Subsection and then only for the taxable year or years and for the amount provided for in the commissioner of administration's certification, approved by the Joint Legislative Committee on the Budget, provided for in Item (2)(a)(ii) of this Subsection as allocated by the secretary. The secretary shall promulgate rules in accordance with the Administrative Procedure Act which establish the process by which a taxpayer shall apply for certification.
(a) Taxpayers eligible for certification include those international business entities which provide to the department a verified statement of cargo volume data for the calendar year prior to the year of the application, specifically including the total annual volume and tons of breakbulk or containerized cargo imported and exported from or to, manufacturing, fabrication, assembly, distribution, processing, or warehousing facilities located in Louisiana.
(b) In no event, however, shall an applicant be certified if its exports and imports are limited to bulk commodities.
(c) The secretary shall provide a statement of certification to each taxpayer which he has certified as eligible to take the tax credit after approval of the Joint Legislative Committee on the Budget, which shall contain the taxable year or years for which the taxpayer is allowed the tax credit and the amount of tax credit allocated for such taxable year or years. The secretary shall also transmit a copy of such statement to the secretary of the Department of Revenue.
(2)(a)(i) For taxable years beginning on and after January 1, 2014, there shall be allowed a credit against the individual income, corporation income, and corporation franchise tax liability of a taxpayer who has received certification pursuant to the provisions of Paragraph (1) of this Subsection, provided that the credit shall be allowed only against the tax liability of the international business entity which receives the certification. The amount of the credit shall be equal to the product of multiplying three dollars and sixty cents by the taxpayer's number of tons of qualified cargo for the taxable year which exceeds the pre-certification tonnage or the product of multiplying the number of dollars by the taxpayer's number of tons of qualified cargo for the taxable year or portion of a taxable year which exceeds the pre-certification tonnage which is warranted by the significant positive economic benefit determined by the commissioner pursuant to Item (ii) of this Subparagraph, whichever is less. For purposes of this Item, "pre-certification tonnage" means the number of tons of cargo which meets the definition of qualified cargo for purposes of this credit, and which was owned by the international business entity receiving the credit, were imported or exported to or from a manufacturing, fabrication, assembly, distribution, processing, or warehouse facility located in Louisiana, and which were so moved by way of an oceangoing vessel berthed at public port facilities in Louisiana during the calendar year prior to the year in which the application is submitted. However, each tax credit granted to a taxpayer shall be subject to the same limit as is provided for a qualifying project pursuant to Subparagraph (C)(1)(b) of this Section. In addition, the import-export cargo tax credits granted by the department to any recipient pursuant to this Section shall be limited to an amount which shall not result in a reduction of tax liability by all recipients of such credits to exceed four million five hundred thousand dollars in any fiscal year.
(ii) The tax credit provided for in this Subsection shall be allowed if the commissioner of administration certifies to the secretary of the Department of Economic Development that the increased utilization of public port facilities and other activity in Louisiana associated with the import or export of the international business entities qualified cargo will result in a significant positive economic benefit to the state. "Significant positive economic benefit" means net positive tax revenue that shall be determined by taking into account direct, indirect, and induced impacts of the port and state activity based on a standard economic impact methodology utilized by the commissioner, and the value of the credit, and any other state tax and financial incentives that are used by the department to secure the port and state activity because of the tax credit, and such certification is approved by the Joint Legislative Committee on the Budget, which approval shall not be granted earlier than July 1, 2014.
(b) In the event that the tax credits allowed pursuant to this Subsection exceed the total tax liability of the taxpayer in the taxable year, the amount of the credit not used as an offset against such tax liability may be carried forward as a credit against subsequent individual and corporation income, or corporation franchise tax liabilities for a period not to exceed five taxable years.
J. The Department of Economic Development may promulgate rules and regulations in accordance with the Administrative Procedure Act as are necessary to implement the provisions of this Section subject to oversight by the House ways and means and the Senate revenue and fiscal affairs committees.
K. Repealed by Acts 2017, No. 245, §2, eff. June 14, 2017.
Acts 2009, No. 474, §1; Acts 2010, No. 1034, §3; Acts 2011, No. 146, §1, eff. June 24, 2011; Acts 2013, No. 431, §1, eff. July 1, 2013; Acts 2015, No. 125, §2, eff. July 1, 2015; §5, eff. July 1, 2018; Acts 2015, No. 357, §1, eff. June 29, 2015; Acts 2016, 1st Ex. Sess., No. 29, §2; Acts 2017, No. 245, §§1, 2, eff. June 14, 2017; Acts 2017, No. 400, §§1 and 4, eff. June 26, 2017; Acts 2021, No. 81, §1, eff. June 4, 2021.
NOTE: See Acts 2015, No. 125, §7, regarding applicability.
NOTE: See Acts 2016, 1st Ex. Sess., No. 29, §2, regarding effectiveness.