Enterprise Zone Program

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The Enterprise Zone Program provides Louisiana income and corporate franchise tax credits to businesses creating net new permanent jobs. Fifty percent of the net new jobs created must be filled with individuals meeting one of the program’s four certification requirements. A business does not have to be located in an Enterprise Zone or making capital expenditures, just creating additional jobs. To qualify, a business must create five new jobs within 2 years or increase its nationwide workforce by 10 percent within one year, whichever is less. A partial sales/use tax rebate or refundable investment income tax credit may be available for construction materials, machinery and equipment purchased during the stated project period.

Note: Requires submittal of Advance Notification and $250 non-refundable fee to Louisiana Economic Development. The Advance Notification can be submitted electronically on the Louisiana Economic Development’s FastLane website.

The Facts

The Enterprise Zone program provides Louisiana income and corporate franchise tax credits to businesses creating net new permanent jobs. Fifty percent of the net new jobs created must be filled with individuals meeting one of the program’s four certification requirements. Enterprise Zones are areas of high unemployment, low income, or have a high percentage of residents receiving some form of public assistance. The Board of Commerce and Industry (Board) is the authority which approves the Enterprise Zone applications. The Office of Business Development, Business Incentives Division (BI) administers this Program.

An Advance Notification Form and a $250 fee must be filed and received by the Office of Business Development, Business Incentives Division (BI) prior to starting construction, purchasing, installing equipment, or hiring.

Eligibility

• Any business creating a minimum number of net new jobs, except those engaged in gaming, residential development, churches, restaurants, hotels, employment service agencies and retail businesses having a NAICS code beginning with 44, 45, 721, 722, and 5613 are not eligible.
• A business must increase nationwide workforce by 10 percent (minimum of 1) within the first 12 months OR create a minimum of 5 net new jobs within the first 24 months of the project/construction start date, whichever is less. The company’s average annual employment shall be determined by LED.
• All jobs that generate a tax credit must be filled with a Louisiana resident except as provided for in statement below.
• A maximum of fifty percent (50%) of jobs that qualify for the tax credit may be filled by non-residents of Louisiana provided residency is made within 60 days of hire.
• 50 percent (50%) of net new hires must meet at least one certification requirement (see Job Certification below).

Benefits

Job Tax Credits

• A one-time tax credit of $3,500 per net new job if the company is located in an enterprise zone or if a net new employee has received public assistance within 6 months of being hired. $1,000 one-time tax credit is available if the business is outside an enterprise zone. $5,000 one-time tax credit is also available for certain aerospace or automobile parts manufacturers for each certified net new permanent full-time job created.
• A certified new employee receiving Temporary Assistance for Needy Families (TANF), an additional $2,500 tax credit, may be generated in the second year of employment.
• Tax credits are used to satisfy State Income and/or Franchise Tax obligations. Special corporations (Such as LLCs and Subchapter S) are allowed to pass the tax credits to the owners. The credits may be used in the year generated or carried forward for up to 10 years.

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Sales/Use Tax Rebate or Refundable Investment Tax Credit

• For a period not exceeding 24 months, businesses are also eligible for a full state and partial local rebate of sales/use tax paid on materials, fixtures, furniture, machinery and equipment purchased and delivered during project/construction period.

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In lieu of the sales/use tax rebate, a refundable investment income tax credit equal to one and one-half percent (1-1/2%) of certain capital expenditures is available.

Application Procedures

• An Advance Notification Form and $250 fee must be filed with the BI PRIOR to starting construction, purchasing, installing equipment or hiring.
• A completed Enterprise Zone Application Form and fee must be filed with BI within three months after the completion of project/construction.
• Copy of Louisiana Department of Revenue Sales Tax Certificate must be provided.
• The screening committee will review the application. The Board will take action on the screening committee’s recommendation. After board approval a contract, maximum of five years, is entered into between the board and the applicant.
• An Inspection/Audit Affidavit Form must be submitted with a $250 fee, within six months after completion of construction or returned with the signed original contract, whichever is later.
• The state requests businesses and their contractors receiving State tax rebates or credits to give consideration to Louisiana manufacturers, suppliers, contractors and labor for their project.
• Other filing fees apply

Job Certification

50 percent (50%) of net new hires must meet one of the following certification requirements:

• Residency. A qualifying employee must be a resident of an Enterprise Zone in any parish within the state of Louisiana.
• Receiving some form of public income assistance during the six months prior to being hired, which may include WIC, FITAP, using Louisiana Workforce Commission’s job service or enrollment in a technical college.
• Lacking basic skills. A person who is below the 9th grade proficiency in reading, writing, or math.
• Unemployable by traditional standards.
• Program sunset on July 1, 2017.

JEDCO
Margo Ruiz
Economic Information and Incentives Coordinator
Phone: (504) 875-3920
Fax: (504) 875-3923
Email: mruiz@jedco.org.

Joyce Metoyer
Program Administrator
Business Incentive Services
Phone: (225) 342-0485
Email: joyce.metoyer@la.gov
www.louisianaeconomicdevelopment.com