2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:3204. Contracts of exemption; renegotiation; violations; lists; priority of exemptions

RS 47:3204 - Contracts of exemption; renegotiation; violations; lists; priority of exemptions
A. The Board of Commerce and Industry may, after the requirements of R.S. 47:3203 have been satisfied, enter into contracts with manufacturing establishments, headquarters, or warehousing and distribution establishments under which contracts such establishments are granted exemption from taxes imposed by this state as provided in this Section, upon the terms and conditions specified in this Chapter and subject to such other terms and conditions as the board on the recommendation of the Department of Economic Development deems to be in the best interests of the state.
B.(1)(a) Except as otherwise provided in this Subsection, each contract of exemption entered into under authority of this Chapter shall be reviewed and reevaluated, and shall be subject to renegotiation, five years from the date of the execution of the contract and may be renewed for an additional five-year period.
(b)(i) Subsequent renewals for additional periods of five years or less may be granted to a contract holder whose contract has not expired as of the date of application for renewal if the applicant can demonstrate the conditions of the initial contract were met and the activities of the applicant in the state of Louisiana generate economic benefits to the state that exceed twenty times the benefit to the applicant of the incentive provided by this Chapter for the year preceding the request for renewal. Such benefit to the state shall be determined by the application of nationally recognized multipliers as appropriate and set forth in the Regional Input-Output Modeling System ("RIMS II"), or its successor publications, for the business operations of the applicant as published by Regional Economic Analysis Division BE-61, Bureau of Economic Analysis, U.S. Department of Commerce, Washington, D.C. 20230.
(ii) The contract holder's application for subsequent renewal shall include an attestation by an independent public accounting firm of the calculation of the economic benefit to the state.
(iii) In addition to the requirements of R.S. 47:3203, the Board of Commerce and Industry shall forward its recommendations, together with the proposed contract and all supporting documents, to the Department of Economic Development and the Joint Legislative Committee on the Budget. Upon receipt of the recommendations and proposed contract, the Joint Legislative Committee on the budget shall have thirty days to approve or reject the renewal contract.
(c) At the invitation of the governor, contracts of exemption for which the initial five-year renewal period ended on or after December 1, 2002, but before February 2003 may be further renewed for up to two additional five-year periods provided that the total number of years of exemption shall not exceed twenty years. The first of the additional two renewals authorized by this Subparagraph shall commence with the first taxable period following August 15, 2005 and need not be contiguous with the preceding renewal period.
(2) For purposes of this Paragraph, "headquarters" shall be defined as it is defined in other definitions contained in law. In addition, it shall be a requirement to enter the new contract provided in this Paragraph that:
(a) After the move of such headquarters, ninety percent of the establishment's employees shall reside in Louisiana.
(b) Ninety percent of the company's officers and managers shall have their primary office in Louisiana.
C. The Department of Economic Development shall review and reevaluate exemption contracts and make recommendations to the governor and Board of Commerce and Industry in respect to renegotiation thereof if necessary.
D. Noncompliance with any of the terms and conditions of the contract under which exemptions are granted is grounds for termination of the contract. If the Board of Commerce and Industry determines that noncompliance with the terms and conditions of the contract under which exemptions are granted has occurred, it shall notify the business entity of the determination. If the violation is not corrected within ninety days, the Board of Commerce and Industry shall hold a hearing to determine whether the contract of exemption should be terminated.
E.(1) All exemptions from taxation granted under contracts entered into under authority of this Chapter shall be listed by the board, and a copy of each such listing shall be submitted to the agencies of the state which collect the taxes from which such exemptions have been granted. Each such collecting agency shall make and maintain a list of all such exemptions in effect. Whenever any exemption, or any part thereof, ceases by reason of a violation of the terms of the contract under which it was granted, or for any other cause, the board shall notify the collecting agencies.
(2) If the collecting agencies receive notice that the exemption, or any part thereof, has ceased by reason of a violation of the terms of the contract under which it was granted after the establishment has already received the exemption, then the amount exempted for the year in which the violation occurred, and for each year thereafter in which the violation is not remedied, shall be considered a tax due as of December thirty-first of the year in which the violation occurred, and for each year thereafter in which an exemption is used and the violation is not remedied and it shall be collected by the collecting agencies in the same manner and subject to the same provisions for the collection of other tax debts.
F. When entering into a contract, the Board of Commerce and Industry shall grant to a manufacturing establishment, headquarters, or warehousing and distribution establishment only such amount of tax exemption or exemptions as is necessary to effect equality in amount between the taxes payable in Louisiana and the taxes which are or would be payable in the state in which such establishment is located or is contemplating locating as determined in this Section.
G. The contract of tax equalization shall, on an annual basis, effect equality in amounts between the taxes payable in Louisiana and the taxes which would have been payable in the competing state. The Department of Economic Development may make and promulgate such rules and regulations necessary to determine the annual equalization amount.
H. Unless the Department of Revenue for valid written reasons recommends otherwise, exemptions for a new or retained manufacturing establishment shall be granted from state taxes only in the following priority:
(1) The corporation franchise tax.
(2) The corporation income tax.
(3) Sales and use tax on machinery and equipment to be used in manufacturing.
(4) The sales and use taxes imposed by the state upon materials and supplies necessary for the manufacture or production of the product of the new manufacturing establishment.
(5) Any other taxes imposed by the state to which like businesses are subject.
I.(1) Unless the Department of Revenue for valid written reasons recommends otherwise, exemptions from taxation for a business locating or retaining headquarters in this state shall be granted from state taxes only in the following priority:
(a) The corporation franchise tax.
(b) The corporation income tax.
(c) Sales and use tax on purchases and leases of, and repairs to, machinery and equipment which is used in the on-site operation of the new headquarters facility.
(d) The sales and use tax on purchases of tangible personal property used in the construction of the new headquarters facility.
(e) Any other taxes imposed by the state to which such businesses are subject.
(2) Rules and regulations concerning new headquarters contracts shall be submitted for review to the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs in addition to all other legislative oversight which may be required.
J. Unless the Department of Revenue for valid written reasons recommends otherwise, exemptions for a new or retained warehousing and distribution establishment shall be granted from state taxes only in the following priority:
(1) The corporation franchise tax.
(2) The corporation income tax.
(3) Sales and use tax on purchases and leases of, and repairs to, machinery and equipment which is used in the on-site operation of the warehousing and distribution establishment.
(4) The sales and use tax on purchases of materials and supplies necessary for the on-site operation of the warehousing and distribution establishment.
(5) The sales and use tax on purchases of tangible personal property used in the construction of the warehousing and distribution establishment.
(6) Any other taxes imposed by the state to which like businesses are subject.
K. In no event shall any exemption from ad valorem property taxes be granted under any contract entered into under authority of this Chapter. This exemption applies only to sales and use tax imposed by the state of Louisiana and does not apply to such taxes authorized and levied by any school board, municipality, or other local taxing authority notwithstanding any other provision of law to the contrary, specifically but not exclusively R.S. 47:337.8.
L.(1) Notwithstanding the provisions of any law suspending a sales tax exemption or exclusion, or making it inapplicable, inoperable, and of no effect, or the provisions of any other law to the contrary, the sales and use taxes imposed by the state of Louisiana shall not apply to purchases or leases of airplane equipment, airplane parts, and airplanes by any commuter airline domiciled in the state.
(2) A commuter airline for the purposes of this Subsection is defined as any airline transporting passengers and/or freight on a regularly scheduled basis, with a minimum of twenty flights per week, whose schedule is published in the Official Airline Guide but which has been exempted from the general rate and route regulations of the Civil Aeronautics Board under the provisions of Section 298.11 of Subpart B of Part 298 of Chapter II of Title 14 of the Code of Federal Regulations promulgated under the authority of Sections 1324 and 1386 of Title 49 of the United States Code. A commuter airline is further defined as any airline having ticket counters that are staffed at airports it serves, a reservations office operating at least twelve hours a day, seven days a week, and interline ticket and baggage agreements through the Air Traffic Conference of America.
Acts 1966, Ex.Sess., No. 12, §4; Acts 1976, No. 381, §1; Acts 1985, No. 3, §1, eff. May 31, 1985; Acts 1987, No. 307, §1; Acts 1987, No. 356, §1; Acts 1987, No. 535, §1; Acts 1987, No. 921, §1; Acts 1989, No. 491, §1; Acts 1990, No. 783, §1, eff. July 24, 1990; Acts 1993, No. 400, §1, eff. July 1, 1993; Acts 1998, No. 60, §1; Acts 1998, No. 72, §1, eff. July 2, 1998; Acts 2002, No. 36, §1, eff. June 25, 2002; Acts 2005, No. 403, §1; Acts 2007, No. 389, §1, eff. July 10, 2007.