2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:4331. Corporate Tax Apportionment Program; definitions; eligibility requirements; contract approval

RS 47:4331 - Corporate Tax Apportionment Program; definitions; eligibility requirements; contract approval
A. Definitions. For purposes of this Section, the following words shall have the following meanings unless the context clearly indicates otherwise:
(1) "Business" shall mean any individual, firm, joint venture, association, corporation, estate, partnership, business trust, receiver, syndicate, or any other legal business entity.
(2) "Department" shall mean the Department of Economic Development.
(3) "Headquarter jobs" shall mean executive, administrative, or professional jobs based at a principal or regional office located in Louisiana, in which are located the principal or regional executive officers normally constituting a principal or regional headquarters providing corporate governance. Such principal or regional executive officers include but shall not be limited to chief executive officer, chief operating officer, and other senior level officers or appropriate regional equivalents.
(4) "Program" shall mean the Corporate Tax Apportionment Program established pursuant to the provisions of this Section, under which a qualified business may utilize the single sales factor.
(5) "Qualified business" shall mean a business certified by the secretary of the department as meeting the eligibility requirements of Subsection B of this Section and approved to participate in the program.
(6) "Secretary" shall mean the secretary of the Department of Economic Development.
(7) "Shared service center jobs" shall mean jobs based at a business located in Louisiana that perform specific corporate operational tasks for the business, or its affiliates, or customers, such as accounting, human resources, payroll, or purchasing.
(8) "Significant positive economic benefit" means the generation of net positive tax revenues. This shall be determined by taking into account direct, indirect, and induced impacts based on a standard economic impact methodology utilized by the department, the value of the single sales factor apportionment, and any other state tax and financial incentives that are used by the department to secure the qualified business.
(9) "Single sales factor" shall mean the single sales factor apportionment percent for manufacturing, merchandising, and other businesses as provided for in R.S. 47:287.95(F)(2)(b) and 606(A)(3)(b).
B. Eligibility requirements. (1) A business shall be eligible for participation in the program if all of the following requirements are met:
(a) At least fifty percent of the total annual sales of the business from a Louisiana site or sites is to out-of-state customers or buyers, or to in-state customers or buyers who resell the product or service to an out-of-state customer or buyer for ultimate use, or to the federal government, or any combination thereof.
(b) The activities of the business at a Louisiana site or sites include corporate headquarters, logistics, warehousing, data center, clean technology, destination health care, research and development, renewable energy, digital media and software development, or other business sector targeted by the secretary as a focus of the department's economic development efforts.
(2) The secretary, in his discretion, may include sales by affiliates of the business in determining the percentage of sales meeting the requirements of this Subsection. Except in the case of a business providing at least twenty-five new headquarter jobs or shared service center jobs, a business primarily engaged in retail sales, real estate, professional services, natural resource extraction or exploration, financial services, or venture capital funds, shall not be eligible for this program. No business engaged in gaming or gambling shall be eligible for the program.
C. Applications and contract approval. (1) At the invitation of the secretary, a business may apply for participation in the program by submitting to the department certified statements and substantiating documents as the department may require.
(2) The secretary may certify the eligibility of the business and request Joint Legislative Committee on the Budget approval of a contract providing for its participation in the program on terms and conditions specified by the secretary, if the secretary determines that the business meets the eligibility requirements provided for in Subsection B of this Section, that participation in the program is needed in a highly competitive site selection situation to encourage a new business to locate in the state or to encourage an existing business to expand in this state, and that securing the project will result in a significant positive economic benefit to the state.
(3)(a) The Joint Legislative Committee on the Budget shall review the secretary's certification of the business and may approve the contract for participation in the program for an initial term of up to twenty years, renewable at the discretion of the secretary for up to an additional twenty years. Upon the approval by the Joint Legislative Committee on the Budget of the secretary's certification of eligibility, the business shall be qualified for participation in the program and may utilize the single sales factor in the same manner as provided for in R.S. 47:287.95(F)(2)(b) and 606(A)(3)(b). The department shall submit a copy of the approved certification, and any renewals thereof, to the Department of Revenue.
(b) No new contract shall be approved on or after July 1, 2017, but contracts existing on that date may continue and may be renewed.
D. Annual certification of eligibility. Prior to utilization of the single sales factor for a particular tax year, the qualified business shall submit to the department certification that it met the eligibility requirements for participation in the program and all performance obligations of the contract for that year, which certification shall be subject to audit by the department. If a qualified business fails to maintain the eligibility requirements for participation in the program or fails to meet all performance obligations of the contract, the secretary may suspend or terminate its participation in the program. If the secretary suspends or terminates a qualified business' participation in the program, the secretary shall notify the Department of Revenue that the business is not qualified to utilize the single sales factor.
E. Economic Analysis Verification. Prior to the implementation of the program, an independent third-party economist selected by the Legislative Fiscal Office and the department, and retained by the department after approval of the Joint Legislative Committee on the Budget, shall verify the standard economic impact methodology utilized by the department.
F. Rules. The department may promulgate rules and regulations after approval of the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs meeting jointly within forty-five days of publication of such rules and regulations in the Louisiana Register.
G. No contracts shall be entered into under this program on or after July 1, 2017.
Acts 2012, No. 415, §1, eff. July 1, 2012; Acts 2013, No. 220, §21, eff. June 11, 2013; Acts 2017, No. 323, §1, eff. June 22, 2017.