Tax and Other Incentives for Entrepreneurship in Louisiana

THE IDEA VILLAGE NEW ORLEANS ENTREPRENEUR WEEK

TAX AND OTHER INCENTIVES FOR ENTREPRENEURSHIP IN LOUISIANA

NEW ORLEANS, LA MARCH 27, 2014

Sco5 T. Whi5aker, Stone Pigman Walther Wi?mann LLC Charlie Romaine, Louisiana Economic Development Daniel J. Walter, Stone Pigman Walther Wi?mann LLC Brandon A. Lagarde, Postlethwaite & Ne?erville, APAC Arman Sadeghpour PhD, Theodent

Introductions

BUSINESS INCENTIVES OpportunityLouisiana.com

Charlie Romaine Assistant Director BERG

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LOUISIANA ECONOMIC DEVELOPMENT

Website Homepage www.OpportunityLouisiana.com

LOUISIANA ECONOMIC DEVELOPMENT

An interacJve tool allowing a business to discover which incenJves their business may be eligible for and the potenJal tax benefits.

•  Am I eligible for any incenJves offered in Louisiana? •  What is my potenJal tax benefit? •  What are my next steps to receive these incenJves?

§  Takes less than 15 minutes to navigate through the eligibility quesJonnaire for all LED administered programs.

§  To get started visit: h?p://incenJveevaluator.louisianaeconomicdevelopment.com/Welcome.aspx

Louisiana IncenOve Evaluator

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Part I: Louisiana Economic Development CorporaOon

Small Business Loan and Guaranty Program

Part II: Board of Commerce and Industry

Industrial Tax ExempOon Program RestoraOon Tax Abatement Program Quality Jobs Program Enterprise Zone Program

AGENDA

SMALL BUSINESS LOAN AND GUARANTY PROGRAM


§  Loan assistance program: provides up to 75% loan guarantees or state direct loan parJcipaJons up to 40% to facilitate capital accessibility

§  Loan guarantees ranges from $5,000 minimum to $1.5 million

Benefit:

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Eligibility (not comprehensive):

§  Must increase employment within specified Jme frame

§  Must hire 35% of new workers from one of four targeted groups

•  Revolving Lines of Credit •  Startups •  AcquisiJons •  Expansions •  Fixed asset purchases •  Purchase or construcJon of

building (limited to 51% applicant occupancy)

•  Restaurants (except franchises) •  Bars and Saloons •  Gaming businesses •  Real estate speculaJon •  RecreaJonal, theme or amusement parks •  Camping faciliJes


Eligible Loan Types Ineligible Loan Types

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Accoin Louisiana BanCorp South Community Trust Bank Farmers-‐Merchant Bank & Trust Home Bank Iberville Bank Jeff Davis Bank MidSouth Bank, NA Regions Bank Synergy Bank Whitney Bank First Bank and Trust

American Gateway Bank Capital One, NA Enterprise Corp of the Delta Guaranty Bank & Trust IberiaBank Investar Bank Liberty Bank Red River Bank Seedco Financial Teche Federal Bank First NBC Co?onport Bank


LIST OF BANKS AND FINANCIAL INSTITUTIONS

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CONTACT

OpportunityLouisiana.com

@LED Louisiana

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Seth Brown Loan Investment Officer Louisiana Economic Development 225-‐342-‐5254

[email protected]

ChrisOan Pennington Loan Investment Officer Louisiana Economic Development 225-‐342-‐5883

[email protected]

Susan Bigner Loan Investment Officer Louisiana Economic Development 225-‐342-‐5651 [email protected]

INDUSTRIAL TAX EXEMPTION PROGRAM


INDUSTRIAL TAX EXEMPTION PROGRAM

§  Property tax abatement: provides a 100% property tax abatement for up to 10 years on manufacturer’s qualifying

capital investments

ELIGIBILITY (not comprehensive) §  Applies only to capital investments by Louisiana manufacturers §  Property must remain on the site at all Jmes

BENEFIT

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CONTACT


@LED Louisiana

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Lori Weber Program Administrator Louisiana Economic Development 225-342-6442

[email protected]

RESTORATION TAX ABATEMENT PROGRAM


RESTORATION TAX ABATEMENT PROGRAM BENEFIT Property tax abatement: provides five-‐year 100% abatement for the rehabilitaJon of an exisJng structure based on assessed valuaJon of property prior to beginning of improvements

ELIGIBILITY (not comprehensive) Must be located in a qualifying district and approved by local governing authority. Does not exempt the acquisiJon cost of the structure.

Contact: Allison Saunders

Tax Incentives Director Culture Recreation and Tourism

Division of Historic Preservation (225)342-8155 [email protected]

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CONTACT


@LED Louisiana

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Becky Lambert Program Administrator

Louisiana Economic Development 225-342-6070

[email protected]

Quality Jobs Program OpportunityLouisiana.com

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§  Provides a cash rebate to companies creaJng well-‐paid jobs and promote economic development.

§  5% or 6% rebate on annual gross payroll of new, direct jobs

§  Sales/use tax rebate or Investment Tax Credit (If the Enterprise Zone hiring requirements and certifications are met)

§  Five year contract with an option to renew for an additional five years.

QUALITY JOBS

BENEFITS

OVERVIEW

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QUALITY JOBS

§  Business must be in one of the following industries: Bioscience, manufacturing, software, environmental technology, food technology, advanced materials or oil and gas field service

or §  At least 50% of total annual sales are to out-of-state and/or to in-state customers

or buyers if the product or service is resold by the purchaser to an out-of-state customer or buyer, or to the federal government.

or §  Must be located in a LED designated distressed region. A distressed region shall

be either of the following: •  A parish within the lowest 25% of parishes based on per capita income. •  A census tract block group below the state median per capita income.

ELIGIBILITY (not comprehensive)

CONTACT


@LEDLouisiana

Frank Favaloro

Program Administrator

225-342-5402

[email protected]

Becky Lambert

Program Administrator

225-342-6070

[email protected]

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ENTERPRISE ZONE PROGRAM


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OVERVIEW

The Enterprise Zone Program (EZ) is a jobs incenJve program that provides tax relief/benefits to businesses located in Louisiana creaJng permanent net new full Jme jobs.

Ø  Of the permanent net new full-‐Jme jobs created 50% of these new jobs must meet one or more of the program cerJficaJon requirements:

•  Residency •  Public Assistance •  Lacking Basic Skills •  Unemployable by TradiJonal Standards

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§  One Ome $2,500 Job Tax Credit (JTC)

§  For each permanent net new job created This credit can be applied towards your Louisiana income and/or franchise tax liabiliJes. The JTC’s earned cannot be sold or transferred.

AND

§  4% State Sales and Use Tax Rebate

§  Rebate is claimed against and calculated on state taxes paid on qualifying materials, machinery, furniture, and equipment purchased associated with the total investment.

OR

§  1.5% Refundable Investment Tax Credit (ITC) §  Refund is calculated on your total capital investment, excluding tax exempted items.

NOTE: A business does not have to make a capital investment to par5cipate in the Enterprise Zone Program, only create permanent net new full 5me jobs.

BENEFITS

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ENTERPRISE ZONE PROGRAM §  Create, at minimum, 5 permanent net new full Jme jobs within 24 months of project start date/contract effecJve date; or

§  Increase exisJng naJonwide workforce by 10% within the first 12 months of the project start date/contract effecJve date ; and

§  50% of the net new full Jme jobs created must meet one or more of the following cerJficaJon requirements:

•  Residency •  Public Assistance •  Lacking Basic Skills •  Unemployable by TradiJonal Standards

ELIGIBILITY

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CONTACT


@LEDLouisiana

Roshonda Hanible Program Administrator

225-342-5382 [email protected]

Joyce Metoyer Program Administrator

225-342-0485 [email protected]

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CONTACT


@LED Louisiana

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Charlie Romaine Assistant Director BERG

Louisiana Economic Development 225-342-5444

[email protected]

New Orleans Entrepreneur Week March 27, 2014

Presented by: Daniel J. Walter 504.593.0826 | [email protected]

stonepigman.com

Louisiana Tax IncenJves

Ø  Angel Investor Tax Credit Ø  Research & Development Tax Credit Ø  Digital InteracJve Media and Sonware

Tax Credit Ø  Technology CommercializaJon Credit and

Jobs Program

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Angel Investor Tax Credit

Ø  Investment in a cerJfied Louisiana Entrepreneurial Business (LEB)

Ø  Accredited investors §  Angel pool §  High net worth individuals §  EnJty consisJng of accredited investors

Ø  Tax credit of 35% of investment §  Taken over 5 years

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Ø  Louisiana Entrepreneurial Business (LEB) §  Principal business operaJons in Louisiana §  Greater than 50% of sales outside Louisiana §  50 or fewer full Jme employees §  Not primarily engaged in:

•  Retail sales, real estate, professional services, natural resource exploraJon or extracJon, or financial services

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Ø  ApplicaJon Process §  Apply to LED for cerJficaJon as a LEB §  Submit applicaJon for reservaJon of credits

on January 1 §  Receive ReservaJon Le?er §  Submit proof of investment within 60 days §  LED issues tax credit cerJficaJon le?er to

the Investor

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Ø  Contact §  Richard Broussard – Business Development

Manager •  [email protected] •  225.342.1940

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Research & Development

Ø  Piggyback on the Federal R&D Credit Ø  Based on "qualified research

expenses" (QRE) §  Wages of employees conducJng qualified

research §  Costs of supplies used in the conduct of

qualified research §  PorJon of contract research expenses

Ø  Qualified Research

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Research & Development Ø  Amount of Louisiana R&D Credit

§  Greater than 100 employees •  8% of Louisiana QRE in excess of the base amount

§  Between 50 and 99 employees •  20% of Louisiana QRE in excess of the base amount

§  Less than 50 employees •  40% of Louisiana QRE

§  40% of Small Business InnovaJon Research Grant

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Ø  ApplicaJon Process §  Submit ApplicaJon to LED

•  Includes descripJon and evidence of Louisiana QRE

§  LED approves the applicaJon §  LED noJfies the Louisiana Department of

Revenue §  Claim credit on tax return

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Ø  Contact §  Eric Burton – Program Administrator

•  [email protected] •  225.342.5340

§  Shamelda Pete – Business Development Officer •  [email protected] •  225.342.5341

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Digital InteracJve Media

Ø  State-‐CerJfied Digital InteracJve Media ProducJon §  Includes

•  Video or interacJve games •  SimulaJon sonware •  InteracJve educaJonal or training programs

§  Excludes •  Sonware for internal use •  StaJc internet sites

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Ø  Amount of Tax Credit §  25% of base investment in Louisiana

•  ProducJon expenses •  Component parts

§  35% of payroll

Ø  Credits earned in the calendar year in which the funds are expended

Ø  No cap

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Ø  ApplicaJon Process §  Apply to LED for cerJficaJon §  LED issues iniJal cerJficaJon le?er

•  EffecJve for expenses incurred up to six months prior to the date of the le?er

§  Submit cost report of producJon expenditures prepared by CPA

§  LED issues final tax credit cerJficaJon le?er §  Claim credit on tax return OR receive 85%

rebate at the Jme of final cerJficaJon

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Ø  Contact §  Heath Williams – Director Digital InteracJve

Media •  [email protected] •  225.342.3571

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Technology CommercializaJon

Ø  Refundable Tax Credit of 40% of commercializaJon costs §  Machinery and equipment §  Fees relaJng to IP §  Payments to Louisiana universiJes under

research agreements §  Payments for clinical research or trials

Ø  6% payroll rebate for new direct jobs Ø  Requires a research agreement with a

Louisiana University

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Technology CommercializaJon

Ø  Contact §  Shamelda Pete – Business Development

Officer •  [email protected] •  225.342.5341

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Accounting Issues

Arman Sadeghpour PhD President & CEO, Theodent

www.theodent.com

Louisiana Economic Development

Louisiana Economic Development Theodent Thanks you!

Questions?

Tax and Other Incentives for Entrepreneurship in Louisiana

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