Developer Tax Incentives

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Developers can utilize the Opportunity Zone program along with other incentives to increase their capital stack and thus reduce the total costs of projects create higher returns, and potentially expand the project. This concept is also referred to as "twinning" or "stacking" incentives. Below are some of the other incentives that may be able to stack with the Opportunity Zone program.

Developers should consult their legal and financial advisors to determine the solution that is the best fit for the project and their associated investors. Please note this list is not inclusive of all business incentives and not all available incentives are guaranteed.

NEW MARKET TAX CREDITS (FEDERAL)

Established in 2000, the New Markets Tax Credit program (NMTC) attracts investment for the acquisition, rehabilitation, or construction of real estate projects in low-income communities. Approximately 43% of U.S. census tracts qualify for NMTCs. 

The U.S. Department of the Treasury competitively allocates tax credit authority to intermediaries known as Community Development Entities (CDEs). CDEs primarily consists of domestic corporations and partnerships. NMTC investors provide capital to CDEs and in exchange receive a tax credit against their federal income tax. The local government does not play a role in this tax incentive, as it is a federal program. An investor must make an investment in a project for seven years to realize the maximum amount of benefits possible from the program. 

 

This includes:

  • 5% of the investment for each of the first three years
  • 6% of the investment for each of the remaining four years
  • This totals to a potential 39% of the initial investment. 


New Market Tax Credits are often stacked with other incentives, further enhancing development opportunities.


For more information visit:

https://www.cdfifund.gov/programs-training/Programs/new-markets-tax credit/Pages/default.aspx

EPA BROWNFIELD’S PROGRAM (FEDERAL)

The EPA’s Brownfields Program provides grants and technical assistance to communities, states, tribes, and others to assess, safely clean up, and sustainably reuse Brownfield sites. Brownfields are properties that may have hazardous substances, pollutants or contaminants present. Grants are available for Phase I/II environmental assessments, clean-up (if necessary), and redevelopment. 

In addition, the program was expanded in 2006 to cover properties with petroleum contamination. Brownfields Assessment Grants provide funding for Brownfield inventories, planning, environmental assessments, and community outreach.


Brownfield Revolving Loan Fund Grants provide funding to capitalize loans that are used to clean up Brownfields.

Brownfield Job Training Grants provide environmental training for residents of Brownfield communities.

Brownfield Cleanup Grants provide direct funding for cleanup activities at certain properties with planned greenspace, recreational, or other nonprofit uses.

Brownfield Area-Wide Planning Grants provide funding to communities to research, plan, and develop implementation strategies for cleaning up and revitalizing a specific area affected by one or more Brownfield sites. 


Alternative funding/Assistance sources: State (LA DEQ), Local (APC), Regional TAB 

(Technical Assistance for Brownfields – Kansas State University)


For more information visit:

https://www.epa.gov/Brownfields/types-Brownfields-grant-funding 


In addition, for more information on the Small Business Revolving Loan fund, please visit:

http://www.scpdc.org/departments/economic-development/revolving-loan-fund/

FEDERAL HISTORIC REHABILITATION TAX CREDIT (FEDERAL)

Encourages and supports the preservation/rehabilitation of historic/older buildings through incentives. This credit applies to income producing properties that are individually listed on the National Register or a contributing element within a National Register Historic District.  This incentive is a 20% federal tax credit of eligible construction costs and fees.


For more information visit:

https://www.nps.gov/tps/tax-incentives.htm

ENTERPRISE ZONE (STATE)

The Enterprise Zone, or EZ program is a jobs incentive program that provides Louisiana income and franchise tax credits to a new or existing business located in Louisiana creating permanent net new full-time jobs and hiring at least 50% of those net new jobs from one of four targeted groups. The benefit provides: either a one-time $3,500 or $1,000 tax credit for each net new job created.

An Enterprise Zone can result in a 4% rebate of sales and use taxes paid on qualifying materials, machinery, furniture, and/or equipment purchased or a 1.5% refundable investment tax credit on the total investment, excluding tax exempted items. The 4% or 1.5% rebate shall not exceed $100,000 per net new job.


For more information visit:

https://www.opportunitylouisiana.com/business-incentives/enterprise-zone

QUALITY JOBS (STATE)

The Quality Jobs, or QJ program provides a cash rebate to companies that create well-paid jobs and promote economic development. The program provides up to a 6% cash rebate on 80% of gross payroll for new direct jobs for up to 10 years. Effective July 1, 2018, the rebate is available on 100% of gross annual payroll. It can provide a 4% sales/use rebate on capital expenditures or a 1.5%

refundable investment tax credit on the total capital investment, excluding tax exempted items.


For more information visit:

https://www.opportunitylouisiana.com/businessincentives/quality-jobs

INDUSTRIAL TAX EXEMPTION (STATE)

Available exclusively to manufacturers, the Industrial Tax Exemption Program is Louisiana's original incentive program for capital investments. This incentive abates local property taxes for up to 10 years on new investments and annual capitalized additions related to the manufacturing site. 

Note: Executive Order JBE 2016-26, issued June 24, 2016, provides changes and new requirements. See LED website for updates. 


For more information visit:

https://www.opportunitylouisiana.com/business-incentives/industrial-tax-exemption

RESTORATION TAX ABATEMENT (STATE)

The Restoration Tax Abatement (RTA) program grants businesses and homeowners up to 10 years of property tax abatement to encourage the expansion, restoration, and development of existing commercial structures and owner-occupied residences in downtown, historic, and economic development districts.


For more information visit:

https://www.opportunitylouisiana.com/business-incentives/restoration-tax-abatement 

Incentive Resources

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STATE HISTORIC REHABILITATION TAX CREDIT (STATE)

This program encourages and supports the preservation/rehabilitation of historic/older buildings through incentives. It applies only to income producing properties that contribute to the significance of a designated Downtown Development District or a Cultural District in Louisiana. 

The incentive provides for a 20% state tax credit for eligible construction costs and fees that meet the Secretary of the Interior’s Standards for Rehabilitation.


For more information visit:

https://www.crt.state.la.us/cultural-development/historic-preservation/tax-incentives/state-commercial-tax-credit/index

LOUISIANA FASTSTART (STATE)

A single-source workforce solution that works with businesses to anticipate and address the company's workforce needs early in the startup or expansion process. This is a discretionary incentive of the state and is based on company's commitment to create jobs. 

Target industries that this program works with are manufacturing, call centers, headquarters, wholesale distribution, technology, and digital media. 


For more information visit:

https://www.opportunitylouisiana.com/faststart

DIGITAL INTERACTIVE MEDIA AND SOFTWARE DEVELOPMENT INCENTIVE (STATE)

The Digital Media Incentive provides a tax credit of 25.2% on qualified payroll for in-state labor and 18% for qualified production expenditures through June 30, 2018, and a 35% tax credit on qualified payroll for in-state labor and 25% for qualified production expenses for qualified production expenses for expenditures on or after July 1, 2018.


For more information visit:

https://www.opportunitylouisiana.com/business-incentives/digital-interactive-media-and-software-program

PURCHASING COMPANY INCENTIVES PROGRAM

The Purchasing Company Incentives Program authorizes the Secretary of Louisiana Economic Development (LED) to enter a contract with a procurement processing company which recruits purchasing companies to Louisiana. The contract shall provide for incentive rebate payments in exchange for the generation of new state tax revenue from new taxable sales to a purchasing company which is managed by the procurement processing company.

CORPORATE HEADQUARTERS RELOCATION PROGRAM

This program provides for the granting of contracts for businesses to receive rebates of 25% of applicable relocation costs for relocating or expanding its headquarters in Louisiana. Louisiana Economic Development (LED) will determine the eligibility of a business based on criteria that include that the relocation or expansion will create at least 25 headquarters jobs that program participation will be a significant factor in a highly competitive site selection situation, and that securing the project will provide a significant positive economic benefit to the state.