07.15.15 |
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Louisiana Enterprise Zone Program

Louisiana State FlagThe state of Louisiana has been resilient in the face of tough times. Its people have weathered the economic crises related to hurricanes, recessions and oil spills on a massive scale.

Perhaps one of the reasons that Louisiana has always been able to bounce back is that the state government has offered an array of tax incentives or credits that are motivating businesses to relocate or expand in distressed areas of the state.

These incentive programs help create or expand employment opportunities and promote economic development in the areas most in need.

One example of a tax incentive program at work is the Louisiana Enterprise Zone Program1.

What it does

While the Louisiana Enterprise Zone Program is designed to incentivize job creation and promote economic development within the state, it focuses more specifically on the poor or less-established areas of the state, which have been designated as “enterprise zones” (“EZ”).2 These economically distressed areas suffer from chronically high unemployment rates, low income and have a high number of people on public assistance. While struggling economically, EZ areas may also be considered the state’s greatest area of opportunity.

By issuing rebates and/or credits to businesses, the state helps employers offset hiring costs and makes it easier for them to afford the activities related to job expansion or creation.

This creates a mutually beneficial relationship that can impact a range of stakeholders, including businesses/employers, those seeking employment within enterprise zones, and municipal and state governments.

Eligibility

(Not a comprehensive list of all eligibility requirements. Review this page for a complete list.)

The Enterprise Zone Program is open to all types of businesses in Louisiana that are located in an EZ, albeit with the following exceptions:

  • Those engaged in gaming
  • Residential development
  • Churches
  • Certain retail businesses (that meet specific criteria) other than grocery stores or pharmacies

In addition, eligible businesses must meet the following criteria cited by Louisiana Economic Development:

  • Create at least five permanent net new full-time jobs within two years of their project start date or increase current national workforce by 10% within the first year
  • Hire 50% of the created net new jobs from at least one of the certification requirements from the following targeted groups:
    1. Residency (someone living in an enterprise zone within the state)3
      1. Enterprise zone listing by Parish – 2000
      2. Enterprise zone listing by Parish – 2010 (used for Advance Notifications received on or after July 1, 2013)
    2. People receiving an approved form of public assistance
    3. People lacking basic skills (a person performing below a ninth-grade proficiency in reading, writing or mathematics)
    4. People unemployable by common standards

How much can your company receive?

There are two primary benefits that businesses can receive through the Louisiana Enterprise Zone Program:

  • A one-time $2,500 job tax credit for each net new job created
  • A 4 percent rebate of sales and use taxes paid on qualifying materials, machinery, furniture, and/or equipment purchased or a 1.5 percent refundable investment tax credit on the total capital investment, excluding tax-exempted items

How to get started

(Not a comprehensive list of all required steps. Review this page for a complete list.)

The first step in determining eligibility for the Enterprise Zone Program is for your business to plan out its expansion (or relocation) project.  The plan may include hiring projections and expenses from possible construction, materials or capital investments.

Once the plan is in place, your business needs to submit an Advance Notification, an application and a fee to the LED (Louisiana Economic Development) website for the Enterprise Zone Program4.  This may also be done through the FastLane tool, Louisiana’s online system for managing incentive programs.5

The company can begin working on its project and wait to hear back from the LED office regarding any next steps to finalize its approval for the program benefits.

Since the overall process can be a complex undertaking, it may be beneficial to seek the help of a financial services or business/corporate tax services company before getting started.

 
Learn More About ADP SmartCompliance® Tax Credits
 


Sources

1http://www.legis.la.gov/Legis/Law.aspx?d=104149

2http://www.opportunitylouisiana.com/page/enterprise-zone

3http://www.opportunitylouisiana.com/assets/LED/docs/Incentives/Enterprise_Zone/LA_Enterprise_Zones_2000_Listings.pdf

4http://www.opportunitylouisiana.com/

5https://fastlane.louisianaeconomicdevelopment.com/

 


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