Business Incentives

There Are Incentives For Your Business!

Enterprise Zone Program

Not all changes effective April 1, 2016 are reflected below. Please check again, as updates are ongoing.

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.
  • 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 capital investment, excluding tax exempted items. The 4% or 1.5% rebate shall not exceed $100,000 per net new job.
Eligibility

This incentive program is open to Louisiana businesses (new or existing) that will:

  • Create a minimum of five permanent net new full-time jobs within 24 months of their project start date or increase their current nationwide workforce by 10% within the first 12 months.
  • Hire 50% of the net new jobs created from one or more of the certification requirements from these targeted groups:
    1. Residents: someone living in Enterprise Zone within the state.
    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 traditional standards.

The following employers or persons shall not be eligible to participate in the program:

  • Employers engaged in the gaming industry or residential developments
  • Churches
  • Retail employers assigned NAICS Code Sections 44 and 45
  • Employers assigned NAICS Code Sections, 721, 722 and 5613

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

Getting started is a click away. Submit your advance notification and pay online before you start construction, hire, and/or make purchases towards the project’s capital investment.

You may submit your advance, application and fees online using FastLane. If you have appointed a representative other than a company official as your contact designee, a Disclosure Authorization is required.

View fees associated with this incentive.

Next Steps

After the department receives your advance notification and fee, you are ready to start your project following these steps:

1. Begin your Project. This includes construction, purchase of equipment, building and materials, hiring, and other capital investment transactions.

2. Apply for Local Benefits. If you are seeking local sales tax incentives in the parish where your project is under way, contact the local governing authority to request an endorsement resolution.

3. File for a Sales/Use Tax Certificate Registration if applicable. Contact the Louisiana Department of Revenue to apply for a sales and use tax registration certificate and taxpayer account number.

4. File for an Unemployment Insurance Identification Number. Contact the Louisiana Workforce Commission to apply for an unemployment identification number.

5. Submit your Program Application and Fee. After the completion of your project, submit your application with fee no later than 90 days after your project completion date.

6. Review of Application. Once LED receives your application and fee, the office staff will review your application for compliance with the program rules, verify submitted information, and make a recommendation to the Board of Commerce and Industry (unless the Louisiana Department of Revenue (LDR) issues an objection against the project and/or owners. If LDR issues an objection, you will have six months to contact LDR and resolve the objection. If objection is not resolved, the application can be canceled.) Applicants will be notified within 14 days of the board meeting and provided with instructions and the time and location of the meeting.

7. Board Review. Your application is presented to the Board of Commerce and Industry for approval. The board convenes every other month, meeting six times a calendar year.

8. Issue Contract. After application is approved by the Board of Commerce and Industry, a contract will be sent to you for your signature. Submit three original signed and witnessed contracts to LED within 60 days.

9. Submit Project Completion Report and Fee. File with LED within six months of the date the Governor signed the contract.

10. Submit Affidavit of Final Cost and Fee. File with LED within six months of the date the Governor signed the contract.

11. File Employee Certification Report and Fee. Reports are to be completed and filed by May 31st after the contract has been signed by the Governor.

12. File for Sales and Use Tax Rebate or Refundable Investment Tax Credit. Once all documentation has been filed and LED has certified compliance, submit rebate claim or refundable ITC request to the Louisiana Department of Revenue. Contact Office Audit Division at 225.219.2270 for additional information.

13. Contract Amendment. Once under contract, if any changes are made (such as Change in Name, Change in Ownership) the appropriate contract amendment and fee must be submitted within 90 days of that change to LED. The contract amendment must be approved by the Board of Commerce and Industry.

FAQs

Q: What is the Enterprise Zone Program?
A: 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.

Q: What are Enterprise Zones?
A: Enterprise Zones are economically distressed areas within the state that have high unemployment rates, low per capita income and/or a high number of residents receiving public assistance.

Q: Do I have to locate my business in an Enterprise Zone?
A: Generally, businesses participating in the program are not required to locate in an Enterprise Zone. When a company is not located in an EZ and is using residency as a certification requirement, the employees must reside in a Louisiana Enterprise Zone or meet one of the other certification requirements.

Q: What are the four certification requirements?
A: The certification requirements are specified targeted groups from the following areas:

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

Q: For advance notifications filed on or after April 1, 2016, what determines whether I can earn either the $3,500 or $1,000 tax credit?
A: The $3,500 tax credit is available if the net new employee is hired by a participating business that is located in an Enterprise Zone.  Additionally, the $3,500 tax credit is available if the net new employee was receiving an approved form of public assistance, such as SNAP, WIC, unemployment benefits, or Medicaid within 6 months prior to their hire date.

Q: How do I apply to participate in the Enterprise Zone Program?
A: Submit an Advance Notification form and a $250 fee prior to beginning the project (before starting construction, purchasing, or hiring new employees). Business Incentives Services (BIS) will acknowledge receipt of the advance via email and will include instructions on filing the application through Fastlane.

Q: What is an Advance Notification form?
A: An Advance Notification form is a document notifying Louisiana Economic Development (LED) of an intended project before any construction, hiring, or capital expenditure has been made.

Q: Where can I find the Advance Notification form?
A: The Advance Notification form should be completed through Fastlane, LED’s secure online filing system.

Q: What is the difference between an Application and Advance Notification?
A: An Advance Notification provides an estimate of your project’s total investment and expected new jobs. An Application is submitted after your project is complete and gives actual figures of the expenditures and investments associated with your project.

Q: What is a Qualification Certification form?
A: The applicant’s Qualification Certification form is a document submitted within the application that confirms the intended number of permanent net new full-time jobs the applicant will create.

Q: Are there any local benefits?
A: Rebate of some local sales/use taxes paid may be available, at the discretion of the local governing authorities in the parish the project is located. An Endorsement Resolution from the local governing authorities must be received prior to the Board of Commerce & Industry approval of the company’s application. For more information on local rebates, please contact the local governing authority where your business is located.

Q: What is an Endorsement Resolution?
A: An Endorsement Resolution is a written motion issued by the local governing authority acknowledging a company’s participation in the Enterprise Zone Program, and stating if a rebate of the local sales taxes will be issued.

Q: Who is the Board of Commerce and Industry?
A: The Board is composed of individuals appointed by the Governor of Louisiana and reviews and approves applications for Enterprise Zone, Industrial Tax Exemption, Quality Jobs and Restoration Tax Abatement incentive programs.

Q: Do I have to hire the new employees within a certain time period?
A: YES. A business must create permanent full-time net new jobs under the following conditions: must increase existing nationwide workforce by 10% (a minimum average of 1 permanent net new job) within the first 12 months of the contract effective date; or create an average of 5 jobs within the first 24 months of the contract effective date.

*** 50% of all permanent net new jobs must meet one of the four Certification Requirements. ***

Q: What is the Employment Baseline?
A: The Employment Baseline is the median statewide number of employees of an employer, including affiliates during the payroll periods including the twelfth day of the month in the last four months completed prior to the contract effective date. The median is calculated by discarding the months with the highest and lowest number of employees and averaging the number in the remaining two months. There must be at least four months of operation to use the median average, otherwise if there are three or less months of operation with employment prior to the contract effective date, average only the months with employment.

Q: What is considered a full-time job?
A: A full-time job is a position filled by an employee hired to work for a minimum of 35 hours a week and reported on the company’s ES4.

Q: Are part-time jobs eligible?
A: No, the only jobs eligible are the ones filled with employees hired to work at least 35 hours a week.

Q: Who is a qualified employee?
A:  A qualified employee is a citizen of the United States and who is domiciled in Louisiana or becomes domiciled in Louisiana within sixty days after employment in such position, performing duties in connection with the operation of the business enterprise as a regular, full-time employee. 

Eligibility Scenarios

Q: If I am an existing business in Louisiana with multiple facilities located throughout the state and I reduce the workforce at one site and increase the workforce at another site with an Enterprise Zone (EZ) contract, would those jobs created at the EZ site be eligible as net new jobs?
A: Possibly. A business has to create net new jobs for the state of Louisiana. A net new job is a position created on or after the contract effective date, which is in addition to the number of jobs in the employment baseline established statewide including affiliates. For example:

  • If a business reduces its workforce by 50 employees at one site and adds 50 jobs at another site, then there is no new net gain of jobs to the state.
  • On the other hand, if a business reduces its workforce by 25 jobs at one site and increases the workforce by 50 jobs at the EZ site, then there is a net increase of 25 jobs to the state.

Q: Production at my company fluctuates due to our business industry. How do I know if I am creating permanent net new jobs during our various seasons of production?
A: A net new job is a job created on or after the start date of the Enterprise Zone project with no anticipated end date and falling within the period commencing 45 days prior to the contract effective date and ending five years after the contract effective date. For example:

  • Thibodeaux Candy Manufacturers Inc. is starting a new line of candy. They will invest in manufacturing equipment to produce their new candy line. Each candy manufacturing line needs five employees, thus their new line will call for the creation of five new jobs. The new jobs created and filled will be considered permanent jobs since the company is expecting to make this type of candy for a long time and intends to maintain their statewide employment levels.
  • Thibodeaux Candy Manufacturers Inc. needs additional employees to fill their Valentine’s Day orders. They hire 20 employees to complete their special orders. After the Valentine’s Day orders are filled and shipped, Thibodeaux Candy Manufacturers Inc. will dissolve the new positions and the 20 employees hired to complete the special order will no longer have jobs. These are not permanent net new jobs because there is not a continuing need for the jobs to be filled.

Q: If Company ABC purchased Company XYZ and retained XYZ’s employees, are the new jobs acquired considered net new jobs?
A: NO. When a business acquires another business, the jobs that were at the purchased business are not considered new jobs for the new business owner. They must be net new jobs to Louisiana. For example:

  • Thibodeaux Candy Manufacturers Inc. has acquired Sweet Home Candies LLC, a local company with 33 existing jobs. Thibodeaux Candy Manufacturers Inc. plans to make some modifications to the structure of Sweet Home Candies LLC and retain the jobs. The 33 jobs retained by Thibodeaux Candy Manufacturers Inc. are not net new jobs.

Industrial Tax Exemption

The Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP) is an original state incentive program which offers an attractive tax incentive for manufacturers within the state. The program abates, up to ten years, local property taxes (Ad Valorem) on a manufacturer’s new investment and annual capitalized additions related to the manufacturing site.

Eligibility

Businesses must be classified as a manufacturer or related to the manufacturing project in order to receive the benefits of the ITEP program. ITEP is only available for activities related to manufacturers:

  • A manufacturer, as identified by the federal government, has a North American Industry Classification System (NAICS) code that begins with 31, 32 or 33.
    • The NAICS is used as a preliminary qualification criterion. If the company does manufacturing but does not have the manufacturing NAICS code and 50+% of the activities at the site are considered manufacturing, then additional steps are required to determine eligibility.
      • A detailed description of the activities to be considered manufacturing are provided by the company.
      • A site inspection will be performed by LED to determine if the activity is manufacturing.
  • The program can be used by manufacturers new to Louisiana and is also available to existing manufacturers in Louisiana with new investments and miscellaneous capital additions to existing facilities.

Program Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

The Industrial Tax Exemption Program has two possible forms of application – an application without an advance, or an application with an advance. Begin the process by first determining if the project meets the criteria for a Miscellaneous Capital Addition, as follows:

  • Will the project cost less than $5,000,000?
  • Will the project take no longer than 18 months to complete?
  • No other incentive programs are associated with this project.

If the anticipated project meets these criteria, proceed with the project, and once the project is completed (finished or operational), within 90 days of completion. You may download the ITEP application or apply online.

If the project does not meet the above criteria of a Miscellaneous Capital Addition or the project includes another incentive program, then getting started is a click away. Submit your advance notification and pay online before you start construction, hire, and/or make purchases towards the project’s capital investment.

  • Once the project is completed, (finished or operational), then the application is filed within 90 days with LED.
Next Steps

After LED’s Business Incentive department receives your advance notification and fee, you are now ready to start your project:

  • Begin your project. This includes construction, purchase of equipment, building and materials items, hiring and other capital investment transactions.
  • File for an Unemployment Insurance Identification Number (if you do not have one). Contact the Louisiana Workforce Commission at 225.342.3171 to apply for an unemployment identification number. They will also assign a North American Industrial Classification System (NAICS) code to your company. This will identify the type of activities that occur at the plant.
  • Submit your program application. After the completion of your project, submit your application with fee no later than 90 days after your project completion date.
    • See Millage Rates for calculation in Section 4 of the application. Use the year in which you filed your application.
    • If you are a consultant and filing on behalf of a company, you must complete and submit the Disclosure Authorization form.
  • Review of application. Once LED receives your application and fee, the office staff will review your application for compliance with the program rules, verify submitted information, and make a recommendation to the Board of Commerce and Industry. Applications are reviewed every 45 days prior to the board meeting, and applicants will be notified within 14 days of the board meeting and provided with instructions and the time and location of the meeting.
  • Board review. Your application is presented to the Board of Commerce and Industry for approval. The board convenes every other month, meeting six times per calendar year.
  • Issue contract. After an application is approved by the Board of Commerce and Industry, three original contracts will be mailed to you for your signature. The initial contract is only for five years.
  • Submit Project Completion Report. File with LED within 90 days after the beginning of operations, completion of construction or receipt of the fully executed contract, whichever occurs last.
  • Submit Affidavit of Final Cost. File with LED within six months of the beginning of operations, completion of construction or within 90 days of the receipt of the executed contract, whichever occurs last. This form requires a fee of $100.
  • Annual Report. This form is due by May 1 of the year following board action. For example, if the board approved your application on April 20, 2012, then the annual report would be due May 1, 2013.
  • Renewal of contract for an additional five year term. Request for renewal must be submitted to the program administrator in writing, by either e-mail (preferred) or regular mail, not more than six months before, and not later than, the expiration of the initial five year contract.  The request to renew cannot be made prior to June 30th for all parishes but Orleans.  If Orleans, the request cannot be made prior to January 31st.  This requires a $50 renewal fee.
  • Board review. The signed renewal contract will be taken to the Board of Commerce and Industry for approval. Once approved and signed by the Governor, the fully executed renewal contract will be sent, and your application is approved for the last five years.
  • Expiration letter. A letter will be sent by LED to the contract holder and the Parish Assessor in September identifying the contract and the amount that will be going onto the tax rolls at the end of the contract period. There is no renewal after the 10 contract years.
Eligibility Scenarios

Q: My company is a manufacturer, but we don’t have the manufacturing NAICS code. What do we do to get it changed?
A: You need to contact Mr. Mark Jones at the Louisiana Workforce Commission (LWC). He can be reached at 225.342.3171 or by email at mjones1@lwc.la.gov. He will require a written statement from you (either letter or email) outlining the process that occurs at your facility. He will then make a determination if the NAICS is to be changed.

  • Stanford Services is a company that provides repair and maintenance on air conditioning systems. They have a subsidiary, Stanford Duct, that cuts, frames and installs the ducts for high-end air conditioning units. They are separate from Stanford Services, but the NAICS is for the parent which is a non-manufacturer. The LWC can potentially provide a secondary NAICS only for the subsidiary, as long as they have enough employees to qualify for the Louisiana Unemployment ID number, or for a multi site code.

Q: My company’s production fluctuates due to our business industry. What happens if our facility shuts down due to current marketing conditions?
A: As long as you can provide information to the Board of Commerce and Industry, that this is a temporary shutdown, they have the option to allow the contract to continue for an additional year, but they will require updates on the status.

Q: If Company ABC purchased Company XYZ and maintained their status as a manufacturer, what do they need to do to continue or get the exemption?
A: All they need to do is file a Transfer of Contract form for all of the projects that are under active contract. Once approved, all the remaining years of those contracts will be transferred to the new owner. For example:

  • Thibodeaux Candy Manufacturers, Inc. has acquired Sweet Home Candies, LLC, and a local company with 33 existing employees. Thibodeaux Candy Manufacturers, Inc. plans to make some modifications to product line of Sweet Home Candies, LLC. Sweet Home Candies has several exemptions currently active. Thibodeaux Candy Manufacturers is going to continue producing candies at the current facility. They provided the Transfer of Contract to the Board of Commerce and Industry and are now the recipients of the exemption.

Q: I will be building a facility for a manufacturer. My company is not in the business of manufacturing, but would I be able to qualify for the program?
A: The ITEP is for manufacturing entities, but we have had new companies building real estate for manufacturing companies. As long as the manufacturing company is located at your facility and is actively producing product, the building will be eligible for the exemption. However, if the company stops manufacturing or moves out, your building would no longer be eligible, unless you are able to convince another manufacturer to move in and begin manufacturing new product.

Q: My company is creating a new first responder station at our plant. Is that eligible for exemption?
A: As long as the equipment that is put into place, fire truck, trailer, hoses, etc., does not leave the plant (or have a Louisiana License plate), they would be considered eligible.

FAQs

Q: What is the Industrial Tax Exemption Program?
A: This is Louisiana’s original incentive program for capital investments, which abates, up to ten years, local property taxes (Ad Valorem) on a manufacturer’s new investment and annual capitalized additions.

Q: How do I know if my business is qualified for this program?
A: The Louisiana Workforce Commission assigns Unemployment ID numbers to companies. When they do that process, they also assign the North American Industrial Classification System (NAICS) code to the company to identify the type of business. If the number begins with a 31, 32 or 33, you pre-qualify as a manufacturer. If you do not have this number, and you still feel that your project is manufacturing, there will be additional steps required to confirm your eligibility. One is a detailed description of the process that you consider manufacturing; the other will be a site inspection to confirm that information. To find out what NAICS code you have, call 225.342.3171. Give them your UID (Unemployment ID #) and they can tell you what code has been assigned to your company. If you disagree with the designation, they can tell you what you need to do to correct the number. Your company’s application will only be allowed if there is more than 51% manufacturing at the site, with or without the NAICS code.

Q: What happens if it’s determined that I have a manufacturing process on my site, but I don’t have the NAICS code that qualifies?
A: Your company’s application will only be allowed if there is more than 51% manufacturing at the site, with or without the NAICS code. The application can only encompass the manufacturing related assets, not any ancillary assets such as Administration, Warehouse or other support activities.

Q: How do I apply to participate in the Industrial Tax Exemption Program?
A: If your project is going to cost more than $5 million or go longer than 18 months, you will need to submit an Advance Notification with a $100 filing fee prior to beginning the project for each program that you want to apply to your project. The Office of Business Incentives Services will acknowledge receipt and send you a URL link to download your application packet, which will include program instructions, procedures, due dates, and a timeline of the program steps. If your project is less than 18 months, under $5 million, you will file under a portion of the program called Miscellaneous Capital Additions. This will be discussed later.

Q: What is an Advance Notification Form?
A: A document notifying Louisiana Economic Development of an intended project before starting construction, purchasing, or hiring new employees.

Q: Where can I find the Advance Notification form?
A: The Advance Notification form should be completed through Fastlane, LED’s secure online filing system.

Q: What is covered by the exemption?
A: This exemption applies to all improvements to the land, buildings, machinery, equipment, and any other property, that is part of the manufacturing process. For example:

  • Elmer Candy Corporation started a new line of candy. They invested in manufacturing equipment to produce their new candy line. They also had to expand their existing facility to incorporate this new line and equipment. The new investment was exempted for ten years.

Q: What is the difference between an Application and Advance Notification?
A: An Advance Notification provides an estimate of your project’s total investment and expected new jobs. An Application is submitted after your project is complete and gives actual figures of the expenditures and investments associated with your project.

Q: What is the application process?
A: Ninety days after a project (i.e., expansion of space, addition of new equipment, etc.) is completed or operational – whichever occurs first – the company files an application. If there is an advance for the project, then the advance number is listed on the application. If there is no advance, then no number is listed on the application. There are two ways to file: One is online through our FastLane system, the other is by hard copy. Filing online requires the use of a credit card or e-check. Filing by hard copy requires payment by check.

Q: What items are eligible for exemption?
A: Improvements to site and facility – including non-movable items used to support manufacturing process – i.e., landscaping and office furniture – if located at the manufacturing facility or within the perimeter of the plant.

Q: How do you know if an asset is ineligible?
A: If an asset has ever had Louisiana Property Tax paid on it, it’s not eligible; this includes used equipment purchased in-state. If you cannot find out if taxes have been paid, then it is best not to file for that equipment. Land is NEVER eligible. Items that are mobile or leave the plant site are not eligible. For example:

  • Company purchases a pickup truck to use on site. The truck does not have a Louisiana license plate so it cannot leave the plant. This truck would be eligible.
  • However, if they put a license on the truck – even if it never left the plant – it’s not eligible because the opportunity is there for it to leave.
  • Another example is laptops. If the company uses laptops in their sales and marketing or administrative offices, they are not eligible.
  • If that laptop is physically tied into the manufacturing process, then it’s eligible.

Q: How does a company get approved?
A: Once an application has been received at LED, staff reviews the information and contacts the company for any questionable items. After the review is completed and any changes are noted, the application is put on the agenda for approval by the Board of Commerce and Industry. After the meeting and if the application is approved, a contract is issued. The process continues through the execution of the contract by the governor.

Q: You mentioned Miscellaneous Capital Additions, what are they?
A: A manufacturer may submit an application with an accumulation of Miscellaneous Capital Additions (MCA) for a compilation of small capitalized expenditures (projects) which are completed by the end of a calendar year and not greater than $5 million or longer than 18 months (in total) per application.

  • MCA applications must be postmarked no later than March 31 (October 31 for Orleans Parish) of the year following the year these expenditures were made. Each month or portion of a month that you file late, you lose a year of exemption, up to five years.
  • Each MCA application may not exceed $5 million.
  • More than one MCA application may be submitted per year.
  • MCAs are for the calendar year only.

Q: What happens if I only have one piece of equipment or my project is short lived? Do I have to wait until the deadline to file my MCA?
A: No, you can file your MCA in the same year the project is finished within 90 days of the project being completed.

  • One of the rules of the program requires that if you wait until more than 6 months after your project is completed, you have to get a statement from the Assessor in the parish telling me that the project is either not on the tax rolls or that property taxes haven’t been paid on the project. Therefore, under the scenario above, if your project started on January 7 and ended February 2, 2011 you could file it by May 2. You could legally wait until March 31 of the 2012 deadline, but you would have to provide the statement from the Assessor with the application.

Q: Does the six month requirement pertain to applications with advances?
A: Yes, there is no difference in the rule. It simply states that if the project is operational or complete and an application is filed six months or more after the end of the project, then the statement is required. The key is the ending date.

Q: The Application asks for a “Restricted Amount” or Obsolete Equipment. What is this?
A: Obsolete equipment is equipment which is either replaced or rebuilt. Below are examples where the reporting of obsolete dollars is required.

  • Replaced Equipment: An applicant replaces an existing motor which cost, when purchased 12 years ago, $12,000 with a new motor which cost $23,000. The applicant is entitled to an exemption on the $11,000 difference. The total cost of the new motor should be indicated on the application and the replaced motor’s original cost should be reflected on the front page of the application in the space marked restricted amount (obsolete equipment).
  • Rebuilt Equipment: If an item needs to be rebuilt, you are entitled to the difference in cost of rebuilding the item at today’s cost minus the cost of the rebuild of this item when it was purchased. If the original item was 15 years old, and it is rebuilt, request the company that is rebuilding the item identify an approximate cost to perform the same service 15 years ago, and include this amount as restricted.
  • Replaced Equipment under Property Tax Exemption: Items which are currently enjoying an exemption and are replaced must be reported as obsolete equipment. The applicant will not lose the remaining years of exemption on the obsolete dollar amount.
  • No Exceptions: Any item which is either rebuilt or replaced that has never enjoyed a property tax exemption must also be reported as obsolete equipment. In all scenarios, the original cost must be identified when possible and if no records exist an estimate cost must be given.
  • Under the new rules for the program, there is an exception to all of the above:
    • A deduction for the original cost of property to be replaced will not be made if the project will result in investment that exceeds $50,000,000.
    • A deduction for the original cost of property to be replaced will not be made if the project is related to the replacement or reconstruction of property after the destruction of or damage to such property as the result of a qualified disaster declared by federal state or local authority – in this case as determined by the Secretary of LED.
    • Additional information is available under Section 511 of the Industrial Tax Exemption Program Rules.

Q: Are there other steps to the program?
A:Yes, when a company gets their fully executed contract, they also receive three forms that are required to be filed:

  • PCR – Project Completion Report – need two dates – date project or equipment became operational and date project completed.
  • AFC – Affidavit of Final Cost – last chance to make any changes to the project cost – include any costs or items you may have overlooked – or that occurred during the project after you submitted the application. This form includes a $100 fee for the necessary inspection. One caveat, if the cost of the project changes substantially from the initial application, the difference in application fee is required.
    • For example – company files for a project and lists the project at $200,000 for total investment. The Application fee is $200. However, when they file their Affidavit of Final Cost, they include all the eligible expenditures during that time frame and the costs go from $200,000 to $2,500,000. (For purposes of this example, I used .1735 as the millage rate). When you multiply the $200,000 x .1735 x .002= $69 (or the minimum $200 fee). Now, when you multiply the $2,500,000 x .1735 x .002= $867.50. That is a difference of $667.50 – which is required to be paid.
  • Annual Report Form. Due not later than 5/1 following the year of board action.
  • Once these forms are received and processed, the project is complete until the renewal is due.

Q: When is the renewal due?
A: LED will send copies of renewal contract and instructions six months before the contract expires. For all parishes but Orleans, the renewal must be completed, turned into LED and approved by the Board of Commerce and Industry before 12/31 of the year the renewal is due. As an example, the company filed for 2008 expenses and their contract is from 2008 to 2018 (ten years). The renewal is due 12/31/2013 (or five years before the expiration date). If the contract is not renewed and approved by the Board prior to that date, the contract has expired as of 12/31/2013 and will go on the tax rolls the next year. Orleans Parish has a different time frame. Their contracts are from 8/1 to 7/31. So their renewal would have to be approved by July 31 of that year.

Q: What is required if a company is bought by another company, or changes their name, or moves equipment around?

  • If Company ABC purchased Company XYZ and maintains the equipment and facility, and continues to operate as a manufacturer, will they be able to extend any exemption currently in place from the point that they purchased the existing company?
    • No, when a business acquires another business the exemptions that were at the purchased business are able to be continued for the remaining time of the existing contracts. The Transfer of Tax Exemption Form is required to be filed within 90 days of that purchase for the change from XYZ to ABC. For instance:
      • XYZ had five contracts currently in force; all five of those contracts expire in 2014, 2015 and 2016 respectively. ABC files the Transfer of Contract form for those contracts. They will be transferred to ABC until their expiration dates, at which time they will go on the tax rolls under ABCs name.
  • If Company ABC decides that another name is more appropriate, how would they change the name they are operating under for the purposes of this program?
    • The company would file an Amendment to Contract Form (Change in Name Only). This simply states that they are changing from one legal name to another. The department requires that this change have already gone through the Secretary of State’s office as well.
  • What if Company ABC closed its facility in one location and opened it in another, or what happens if their actual physical address changes because a road is named or a physical address is created?
  • What happens when a company that has several branches in Louisiana – all of which are manufacturing facilities, moves a piece of equipment that is under contract to another manufacturing facility within the company?
    • This is called a Partial Transfer of Assets Form. It actually creates a separate contract for the new entity and continues the original exemption in the new location. For example:
      • Bollinger has several pieces of equipment under exemption at their facility in Calcasieu and they move one of those pieces to Fourchon. They would file the Partial Transfer of Contract form, which effectively reduces the original contract and creates a separate contract for the new location. The new location will only receive the same benefit that the original contract location was getting and the contracts will expire in the same year.

A: The only exception to this, if the company that is receiving the new asset has a contract that expires in the same year as the contract the assets are being transferred from. Under that circumstance, amended Affidavits of Final Cost will be filed. One for the company losing the asset and another adding the asset to the new company.

Q: What benefits are available by participating in the Industrial Tax Exemption Program?
A: Benefits include an exemption from property taxes on the new investment for a period of up to ten years.

Q: Are there any local benefits?
A: The exemption from property taxes includes both local and parish taxes. The state has no property tax.

Q: How does the Assessor know about the exemption? Do I have to file anything special?
A: Any time you file an application for the Industrial Tax Exemption Program, the Assessor gets a copy of the documents that you have filed – this includes advances. When you file your application, they get a copy of the form, the approval letter, contracts and any official correspondence and forms related to that project. You need to check with the Assessor in your parish, but normally we recommend that you file your exempted assets on a form called the LAT-5A. Some parishes may not require this form, but you need to check with the Assessor.

Q: Who is the Board of Commerce & Industry?
A: The Board is composed of individuals appointed by the governor of Louisiana, who review and approve applications for certain tax incentive programs, including Enterprise Zone, Industrial Tax Exemption, Quality Jobs and Restoration Tax Abatement.

Quality Jobs

The Quality Jobs, or QJ, program provides a cash rebate to companies that create well-paid jobs and promote economic development.

  • The Program provides a 5% or 6% cash rebate of annual gross payroll for new, direct jobs for up to 10 years.
  • Could provide a 4% sales/use tax rebate on capital expenditures or a 1.5% investment tax credit for qualified expenses.
Eligibility

Business must be in one of the following industries:

  • Bioscience, Manufacturing, Software, Environmental Technology, Food Technology, Advanced Materials or Oil & Gas Field Service

OR

  • Must have at least 50% of annual sales 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 an area designated by Louisiana Economic Development as a distressed region. A distressed region is either of the following:
  • A parish that is within the lowest 25% of parishes based on per capita income.
  • A census tract block group that is below the state median per capita income, based upon the latest federal decennial census.

The following employers or persons shall not be eligible to participate in the program:

  • Retail employers identified by NAICS Code Sections 44 and 45
  • Business associations and professional organizations identified by NAICS Code 8139
  • State and local government enterprises
  • Real estate agents, operators and lessors
  • Automotive rental and leasing
  • Local solid waste disposal, local sewage systems and local water systems businesses
  • Nonprofit organizations, unless the department determines that the new direct jobs created by the organization would have a significant impact on Louisiana
  • Employers engaged in the gaming industry identified by NAICS Code sections 713210 and 721120
  • Attorneys

Job Requirements

  • Create a minimum of five new direct jobs
  • These jobs must be full time, (full-time employees — working 30 hours or greater per week)
  • Provide a basic health benefit plan/health insurance coverage
  • That which is required to be offered and/or provided shall include coverage for basic hospital care, coverage for physician care and coverage for health care which shall be the same as that provided to executive, administrative or professional employees
  • Coverage must become effective no later than the first day of the month 90 days after the date of hire
  • The employer’s contribution must have a value of at least one dollar and twenty-five cents per hour. If you are other than a self-insured company, the value of the plan is the actual cost for the individual coverage. If you are a self-insured company, LED will determine the value. Basic health care benefits do not include dental, vision or life.

Minimum Wage and Health Care Requirements.

  • The minimum wage requirement for new direct jobs is $14.50 per hour in wages and healthcare benefits

Minimum Annual Gross Payroll Requirements

If an employer employs:

  • 50 or fewer employees state-wide prior to the start date of the contract, the minimum annual payroll threshold for new direct jobs is $250,000
  • More than 50 employees statewide prior to the start date of the contract, the minimum annual payroll threshold for new direct jobs is $500,000

If the actual verified annual gross payroll for the employer’s third fiscal year does not show a minimum of five new direct jobs and does not equal or exceed a total annual payroll for new direct jobs of either $500,000 or $250,000, whichever is applicable, the employer will be determined to be ineligible.

If seeking sales and use tax rebates or the investment tax credit, in addition to meeting the requirements of the Quality Jobs Program an employer must meet the hiring requirements as defined in the Enterprise Zone Program:

  • Create a minimum of five permanent net new full-time jobs within 24 months of their project start date or increase their current statewide workforce by 10% within the first 12 months
  • Hire at least 50% of all net new jobs from one or more of the following targeted groups:
    • Residency. Someone living in Enterprise Zone within the state.
    • People receiving an approved form of public assistance.
    • Lacking basic skills. A person performing below a ninth-grade proficiency in reading, writing or mathematics.
    • People unemployable by traditional standards.

Program Statutes & Rules:

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

Getting started is a click away. Submit your advance notification and pay online before you start construction, hiring and/or make purchases towards the project’s capital investment.

You may submit your advance, application and fees online using FastLane. You may also download the application.

Next Steps

After the department receives your advance notification and fee, you are ready to start your project, including the following:

1. Begin your project. This includes construction, hiring, purchasing equipment, building and materials and other capital investments.

2. File for an Unemployment Insurance Identification Number (UI#). Contact the Louisiana Workforce Commission (LWC) to apply for an unemployment identification number.

3. Submit your program application within 18 months after the first new direct job is hired, however, no more than 24 months after the department has received the advance notification and fee. Submit the Minimum Insurance Requirement document with your application.

4. LED review of application. Once LED receives your application and fee, the office staff will review your application for compliance with the program rules and provide a copy of the application to the Louisiana Workforce Commission (LWC) and Louisiana Department of Revenue (LDR) for review. An application will not be presented to the Board until a letter of no objection is received from both agencies. Applicants are notified within seven days of the Board date and are provided the time and location of the meeting.

5. Board Review. Your application is presented to the Board of Commerce and Industry for approval. The Board convenes every other month, meeting six times during a calendar year.

6. Issue contract. After the application is approved by the Board of Commerce and Industry, a contract will be sent for signature.

7. Submit Annual Certification Report (ACR) and supporting documentation. The ACR(s) is due within 6 months after the close of your fiscal filing year or after the Governor’s signature, whichever comes later.

Use appropriate form specific to your contract:

8. Renewal.  The company must make a written request (email preferred) to renew the contract to the program administrator within 60 days of the expiration of the initial 5 year contract term.  This requires a $50 renewal fee.

Only if seeking sales and use tax rebates or the investment tax credit, in addition to meeting the requirements of the Quality Jobs Program an employer must meet the hiring requirements as defined in the Enterprise Zone:

1. After submitting the advance notification and fee, apply for local benefits by contacting the local governing authority to request an endorsement resolution.

2. File for a Sales/Use Tax Certificate Registration. Contact the Louisiana Department of Revenue to apply for sales and use tax registration certificate and taxpayer account number.

3. Submit Project Completion Report (PCR) within 3 months after the project is completed.

4. Submit the Affidavit of Final Cost (AFC) within 6 months of the completion of the project.

5. File for sales and use tax rebate or refundable investment tax credit with Louisiana Department of Revenue.

6. File Employee Certification Reports (ECR). Reports are due by May 31st after the project has been completed (for project period of 24 months or less).

Only if seeking an additional sales and use tax rebate or investment tax credit period (remember, an employer must also meet the hiring requirements as defined in the Enterprise Zone Program):

1. Submit the Advance Notification Quality Jobs Additional Period – Sales and Use Tax / ITC before beginning the additional project period.

2. Submit the Application Sales and Use Tax/Investment Tax Credit (Additional Period) within 3 months after the project is complete. (Remember that the project period cannot exceed 30 months.)

3. File Employee Certification Reports. These reports are due in conjunction with the Application for this additional period.

4. Submit the Project Completion Report within 3 months after the project is completed.

5. Submit the Affidavit of Final Cost (AFC) within 6 months of the completion of the project.

6. File for sales and use tax rebate or refundable investment tax credit. Submit rebate claim or refundable ITC request to the Louisiana Department of Revenue within 6 months after the project has been completed. You must complete additional forms issued by the LDR. Contact Office of Audit Division at 225.219.2270 for additional information.

Eligibility Scenarios

Q: If I am an existing business in Louisiana with multiple facilities located throughout the state and I reduce the workforce at one site and increase the workforce at another site with a Quality Jobs (QJ) contract, would those jobs created at the QJ site be eligible as net new jobs?
A: Possibly. A business has to create new direct jobs for the state of Louisiana. A new direct job is a position created on or after the contract effective date, which is in addition to the number of jobs in the employment baseline established statewide including affiliates that meet the minimum requirements of the program. For example:

  • If a business reduces its workforce by 50 employees at one site and adds 50 jobs at another site, then there is no new net gain of jobs to the state.
  • On the other hand, if a business reduces its workforce by 25 jobs at one site and increases the workforce by 50 jobs at the QJ site, then there is a net increase to the state.

Q: If Company ABC purchased Company XYZ and retained XYZ’s employees, are the retained jobs considered net new jobs?
A: NO. When a business acquires another business the jobs that were at the acquired business are not considered new jobs to the state for the new business owner. There must be a net increase of new jobs to the state. For example:

  • Company A Manufacturers, Inc. has acquired Company B, Inc., a local company with 15 existing employees. Company A Manufacturers, Inc. plans to make some modifications to the structure of Company B, Inc., and retains their employees. The 15 employees retained by Company A Manufacturers, Inc., are not considered net new jobs to the state.

Q: Under a QJ contract, businesses are eligible to receive payroll rebates and either the sales and use tax rebate or the investment tax credit if, in addition to meeting the QJ requirements, a business must also meet the hiring requirements of the Enterprise Zone Program. If I do not meet the minimum requirements of both programs, do I lose all the benefits offered under the QJ program?
A: Possibly. The QJ Program offers a payroll rebate on gross annual payroll for net new jobs. As long as the company meets the requirements of the QJ program they can still receive that benefit. For example:

  • If the company meets both program requirements (QJ and EZ) under its QJ contract, then both benefits can be received by the company.
  • If the company meets only the QJ requirements under its QJ contract, then the payroll benefits can be enjoyed.
  • If a company meets only the hiring requirements of the Enterprise Zone program under its QJ contract, then the company is not eligible for either benefit.
  • If a company meets neither program requirement, then they are not eligible for either benefit.
FAQs

Q: What is the Quality Jobs Program?
A: The Quality Jobs (QJ) Program provides payroll benefits as an inducement for businesses to locate or expand operations in the State of Louisiana.

Q: What are the benefits of the program?
A: It provides a rebate of up to 6% on annual wages for up to 10 years and the election of either a 4% sales/use tax rebate on capital expenditures or a 1.5% investment tax credit for qualifying expenses if additional requirements are met. Sales/use taxes can be rebated during a 30 month “project/construction” period.

Q: What is a Quality Jobs contract?
A: The Quality Jobs Contract is an agreement between the State of Louisiana and a qualified company that allows the company to receive the benefits of the QJ Program upon meeting all of the program requirements.

Q: How do I enter into a Quality Jobs contract?
A: Advance Notification — Filing an Advance Notification is the first step in the process. The Advance Notification can be filed through FastLane. The Advance Notification must be filed before hiring, purchasing or construction begins.

Application — An application for the Quality Jobs Program must be filed on the prescribed forms within 18 months after the first new direct job is hired, however, no more than 24 months after the department has received the advance notification and fee. Upon receipt of the application, fee, and addendum material, the application is reviewed by LED. Once accepted, the application is processed and presented at the next Board of Commerce and Industry meeting.

Contract — After the Board of Commerce and Industry approves the application, a contract is mailed to the applicant for signature (three originals, to be signed before two witnesses and returned). The contract is then sent to the Board of Commerce and Industry and finally to the Governor for signature.

Q: What is an Advance Notification?
A: The Advance Notification is the document notifying LED of a project before any action has occurred, such as hiring new employees or spending money.

Q: After a contract is executed, what documents are necessary to receive the benefits of the program?
A: The company must file the following documents with LED after the close of each fiscal year during the contract period:

  • The Annual Certification Report (ACR) and the required addendum material, including a copy of the wage reports filed with the Louisiana Workforce Commission (ES4’s) and information about the employee health care plan (coverage summary and cost detail) Certification of Primary Qualification illustrating the company’s eligibility for the program
  • The Rebate Spreadsheet illustrating the new direct jobs created
  • The Baseline Report illustrating that the company has maintained the baseline jobs that existed prior to the start date of the contract.

* Additional information may be required. These forms can be found on LED’s website.

* LED will notify the Louisiana Department of Revenue (LDR) of the company’s eligibility; the company must then file with LDR to receive the rebate.

Q: What is the earliest date I can start my contract?
A: The earliest contract start date is the date LED receives the Advance Notification and fee.

Q: How long is the contract effective?
A: The contract is effective for five years and may be renewed for an additional five years.

Q: Can I participate in the Quality Jobs Program and the Enterprise Zone Program at the same time?
A: No, you cannot participate in both programs at the same time.

Q: What is the difference in benefits between Quality Jobs and Enterprise Zone?
A: The Enterprise Zone Program provides a one-time job tax credit on each new direct job, and the Quality Jobs Program provides up to a 6% payroll rebate on annual payroll for new direct jobs for up to 10 years. Both programs offer sales and use tax rebate or the investment tax credit.

Q: If I originally applied for Enterprise Zone and later decide to apply for Quality Jobs (or vice versa), can you do so using the same Advance Notification?
A: Yes, an email or letter addressed to the program managers reflecting the change would suffice, provided that the election is made before the application due date.

Q: What are the requirements for the sales and use tax rebates or the investment tax credit?
A: In addition to meeting the requirements of the Quality Jobs Program, the applicant must meet the hiring requirements as defined in the Enterprise Zone Program:

  • Five new direct jobs within the first 24 months of the project period or increase its current workforce by 10% within the first 12 months of the project period.
  • 50% of all jobs created during the project period must meet at least one of the four hiring requirements defined in the Enterprise Zone Program.

Q: What is the minimum number of new direct jobs that need to be created?
A: At least five new direct jobs must be created by the end of the third fiscal year of the contract.

Q: What is a new direct job?
A: A new direct job is a job or position that did not exist in the State of Louisiana prior to the start date of the contract and meets the requirements of the QJ program. For instance:

  • If a company is expanding its workforce by creating 10 new jobs at the contract site, as long as those jobs are created after the start date of the contract and meet the minimum requirements (wages, health care, etc), then those jobs are considered new direct jobs.
  • If Company A has a contract to perform services or supply goods in the State and then loses that contract to Company B to supply similar services or goods in the State, then any job gains at Company B associated with the contract change would not be considered new direct jobs.
  • If Company A has 20 Louisiana employees and buys Company B, which has an existing QJ contract, then those 20 employees would not be considered new direct jobs. Similarly, if Company A buys Company B, who has 10 Louisiana employees, then those 10 employees would not be considered new direct jobs. If a company or its affiliate within the State of Louisiana has multiple locations in the State, the transferring of employees from one location to another is not considered a new direct job.

Q: What are the minimum wage requirements of the program?
A: The minimum wage requirement for new direct jobs is $14.50 per hour in wages and health care benefits. The health care plan must have a minimum value of at least $1.25 per hour for individual coverage.

Q: How do I calculate the value of the health care plan?
A1: If the company purchases health care insurance, the value of the plan is the company’s actual cost for individual coverage (employee single). (If the applicant feels that the value of their plan is greater than the cost, a valuation may be performed. However, based on historical reviews, it is rare that the value would differ materially from the actual cost.)
A2: For a self-insured company, LED will determine the value through comparison with the cost of plans providing similar benefits (consulting with an insurance industry expert as needed).

Q: What are the minimum payroll requirements of the program?

  • For applicants with 50 or less employees state-wide prior to the contract effective date, the minimum annual gross payroll threshold for new direct jobs is $250,000.
  • For applicants with 51 or more employees state-wide prior to the contract effective date, the minimum annual gross payroll threshold for new direct jobs is $500,000.

*If the actual verified annual gross payroll for the employer’s third fiscal year does not show a minimum of five new direct jobs and does not equal or exceed a total annual payroll for new direct jobs of either $500,000 or $250,000, whichever is applicable, the employer will be determined to be ineligible.

Q: If the employer pays an employee $13.25/hour in wages and the employee does not elect the eligible health care plan valued at least $1.25/hour, would this meet the minimum wage requirement?
A: Yes, provided that at least fifty percent of the employees holding new direct jobs accept the health care benefits offered: however, only the wage portion is eligible for rebates.

Q: What is an in-state contract?
A: An in-state contract is a contract to perform services or supply goods that involves Louisiana jobs, including contracts associated with serving or supplying goods to certain offshore or out-of-state locations. For instance:

  • A contract to deliver services or goods to a Louisiana location is considered an in-state contract. This includes contracts with public or private entities that are located outside of the State (e.g., contracts with global companies for their Louisiana locations, contracts with the Federal Government for a Louisiana location)./li>
  • A contract to deliver services or goods to an out-of-state location for which services and goods have historically been provided from Louisiana (e.g., provided by Louisiana facilities near state borders) is considered an in-state contract.
  • A contract to perform services for or supply goods to an offshore Gulf of Mexico facility in an area that has historically been served from Louisiana (e.g., served from Port Fourchon) is considered an in-state contract.

Q: What is a baseline employee?
A: The median statewide number of employees of an employer, including affiliates working at the average hours per week, during the payroll periods including the twelfth day of the month in the last four months completed prior to the contract effective date. (The median is calculated by discarding the months with the highest and lowest number of employees and averaging the number in the remaining two months.) Four months of operation to use the median average are needed, otherwise if three or less months of operation with employment prior to the contract effective date, average only the months with employment.

Q: Are there any local benefits?
A: Rebate of some local sales/use taxes paid is available at the discretion of the local governing authority in the parish in which the project is located. The local governing authority must submit an Endorsement Resolution to the Board of Commerce & Industry prior to Board action on the Company’s application. For more information on local rebates, please contact the local governing authority where your business is located.

Q: Louisiana Domicile, what is it and how can I prove it?
A: Although a person can have multiple residences, they can only have one domicile. The determination of domicile can be quite complex, requiring living in Louisiana for at least six months out of the year, plus evidence of intent to remain here permanently. Domicile can be inferred from a totality of a person’s actions and can be supported by documents such as a voter registration card or filing of Resident Tax Return IT 540.

Q: What is an Endorsement Resolution?
A: An Endorsement Resolution is a written motion issued by the local governing authority supporting a company’s participation in the Quality Jobs Program that states the percentage of local sales tax to be rebated to the company.

Q: Who is the Board of Commerce & Industry?
A: The Board, composed of individuals appointed by the Governor of Louisiana, reviews and approves applications for certain tax incentive programs, including Enterprise Zone, Industrial Tax Exemption, Quality Jobs and Restoration Tax Abatement.

Small and Emerging Business Development Program

LED’s Small and Emerging Business Development (SEBD) Program provides the managerial and technical assistance training needed to grow and sustain a small business.

  • Provides for developmental assistance, including entrepreneurial training, marketing, computer skills, accounting, business planning, and legal and industry-specific assistance
  • Consideration for bidding on select products or services purchased by state agencies
  • SEBD Intermediaries provide a free needs assessment and assistance with accessing other program benefits
Eligibility

The program is open to all Louisiana small businesses that meet the following eligibility requirements for both the business and the owner. Certification is effective for up to 10 years or until the firm no longer meets the eligibility requirements for the program.

Small and Emerging Business Person
For the purposes of the program, a person who meets all criteria in this section is defined as a Small and Emerging Business Person.

  • Citizenship – The person is a U.S. citizen or legal resident
  • Louisiana Residency – The person has been a Louisiana resident for at least one year
  • Net Worth – At least 51 percent of the business is owned and controlled by persons who individually have a net worth of less than $400,000, excluding personal residence, business assets and retirement accounts
  • Full-Time Employment – Managing owners who claim Small and Emerging Business Person status must be full-time employees of the applicant firm (20 or more hours per week)

Small and Emerging Business
For the purposes of the program, a business that meets all criteria in this section is defined as a Small and Emerging Business.

  • Ownership and Control – At least 51 percent of the company is owned and controlled by one or more Small and Emerging Business Persons
  • Principal Place of Business – The firm’s principal place of business is Louisiana
  • Lawful Function – The company has been organized for profit to perform a lawful, commercially useful function
  • Business Net Worth – The business’ net worth does not exceed $1.5 million
  • Job Creation – An applicant firm anticipates creating new full-time jobs

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

To benefit from LED’s Small and Emerging Business Development Program and its comprehensive approach toward assisting small Louisiana businesses, complete the online application at www.ledsmallbiz.com.

For more information on the Small and Emerging Business Development Program, contact:

John W. Matthews
Executive Director, Small Business Services
john.matthews@la.gov
225.342.1181

Next Steps

Online Certification

  • LED will review completed applications within 72 hours of submittal.
  • You will receive an email notification after review that acknowledges your application status.
  • Along with an acceptance notification, approved applicants will receive a certification number, a list of SEBD Intermediaries, and instructions on how to print the SEBD certificate.

Receiving Assistance

  • Now that your business is certified in the SEBD Program, contact the SEBD Intermediary nearest you to schedule a business assessment.
  • Based on the business assessment, the Intermediary will recommend appropriate assistance that is available to help you succeed in growing or sustaining your business.

View the List of SEBD Intermediaries

Eligibility Scenarios

Q: I meet most of the eligibility requirements, but just moved back to Louisiana 2 months ago after being gone for several years. Am I eligible for the program?
A: NO. You must be a Louisiana resident for at least one year immediately before you submit your application.

Q: If I own 51% of a business and my business partner owns the other 49%, can I apply using just my personal net worth information?
A: YES. You would only need to provide information indicating that someone with a personal net worth less than $400,000 owns 51% of the company. However, if you each owned 50%, you would need to provide the personal net worth for both owners.

Q: I founded a nonprofit organization in Louisiana. Would it qualify for the SEBD Program?
A: No, the SEBD Program is only for companies that are organized for profit (and are performing a lawful, commercially useful function).

FAQs

Q: How can I get a grant to start my small business?
A: The SEBD Program is not a grant, and Louisiana Economic Development does not have grants for small businesses. Small businesses can search for federal grants at www.grants.gov or www.sbir.gov.

Q: Can I certify more than one company in the SEBD Program?
A: NO. The SEBD Program is designed to support only one business, by way of the business owner, for managerial and technical assistance training.

Q: Is there a cost to get certified?
A: NO. Program certification is offered at no charge to the business owner.

Q: I am certified. Now what do I do next?
A: Certification is the first step. Now you must contact one of our SEBD Intermediaries and schedule an assessment. Following the assessment, the Intermediary will make recommendations for your next step.

Q: Does it matter which Intermediary I go to?
A: NO. All SEBD Intermediaries have the experience and expertise to guide you through the program. Feel free to contact the one that is most convenient for you.

Q: I am SEBD certified and I just started a large project to update my company website. Can the SEBD Program help pay for that?
A: NO. Even though the SEBD Program can assist in website enhancements, the program cannot support any ongoing project. All projects must be recommended and submitted by an SEBD Intermediary and approved by LED prior to the project commencing.

Q: My business needs to buy new equipment to continue to grow. Does this program provide assistance to purchase additional equipment?
A: NO. The Small and Emerging Business Development Program does not provide assistance to purchase hard or fixed assets. The Program is designed to provide for managerial and technical assistance training at reduced costs.

Q: How long does the SEBD certification last?
A: The SEBD certification is good for 10 years or until the firm no longer qualifies for the program.

Q: Can I re-certify after the 10 years?
A: NO. The certification is only good for one 10-year period.

Q: How do I log in to see my account after I am certified?
A: You can visit www.ledsmallbiz.com and log in under the “Previous User” heading using the appropriate username and password.

Q: Where do I find a paper application?
A: All applications for the SEBD Program must be submitted using our online application process.

Q: Is this a DBE or MBE program?
A: NO. All Louisiana Economic Development small business programs are race and gender neutral.

Q: How do I get certified as a woman, minority-owned, or disadvantaged business?
A: Information about these programs can be found at the following sites:

U.S. Small Business Administration Programs
U.S. Small Business Audiences
Louisiana’s Unified Certification Program

Q: I am already certified in the SEBD Program and I want to show proof to a potential client, but I misplaced my certificate. Can I get another certificate?
A: Yes. Please follow the directions below.

  • Connect to Louisiana Economic Development’s small business portal at www.ledsmallbiz.com.
  • Type in your username and password under the “Previous User Login” heading. (If you forgot your password, follow the appropriate link under “Previous User Login”).
  • After logging in, you will be given the option to view your certification letter under the column titled “Certificate.”
  • Click on “View SEBD Certification Letter.”
  • You should now see the SEBD certificate and can print as needed.

Hudson Initiative

Louisiana’s Hudson Initiative is a certification program that is designed to help eligible Louisiana small businesses gain greater access to purchasing and contracting opportunities that are available at the State government level.

  • Your business and contact information will be accessible to State purchasing officials and prime contractors looking for subcontractors
  • State agencies are encouraged to get quotes from and use qualified, certified companies whenever possible
  • For small purchases of less than $15,000, State agencies can waive the requirement of getting additional quotes if a certified company submits a quote that is reasonable
  • 10% of the total evaluation points can be added to your bid on a Request for Proposal (RFP)
  • Prime contractors who use your business as a subcontractor on a bid for an RFP are also eligible to receive additional percentage points on their bid
Eligibility

The program is open to all Louisiana businesses that meet the following eligibility requirements of a Small Entrepreneurship (SE) under the Hudson Initiative. Once certified, business owners are required to submit annual updates through www.ledsmallbiz.com. Failure to submit the required information before your anniversary date each year will result in termination of your certification.

What are the eligibility requirements?

  • Principal Place of Business – The company must have its principal place of business in Louisiana
  • Employees – The company has fewer than 50 full-time employees
  • Average Annual Gross Receipts – Average annual gross receipts do not exceed $5 million for non-construction and $10 million for construction companies
  • Independently Owned and Operated – The business is independently owned and operated
  • Not Dominant – The business is not dominant in its professional field
  • Louisiana Residency – Owned by persons domiciled in Louisiana
  • Citizenship – Owned by and has officers who are U.S. citizens or legal residents

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

To take advantage of Louisiana’s Hudson Initiative and gain greater access to purchasing and contracting opportunities with the State government, complete the online application at www.ledsmallbiz.com.

For more information on the Hudson Initiative, contact:

John W. Matthews Jr.
Director, Small Business Services
john.matthews@la.gov
225.342.1181

Next Steps
  1. LED will review completed applications within two business days of submittal.
  2. You will receive an email notification after review that acknowledges your application status.
  3. Register as a vendor with the Office of State Purchasing to begin receiving email notifications about purchasing and contracting opportunities available through the State of Louisiana.
  4. Submit annual updates through www.ledsmallbiz.com by your anniversary date each year to remain certified in the program. Three email notifications will be sent to remind you to submit this information.
Eligibility Scenarios

Q: My business does not have any full-time employees, except me. Would I qualify?
A: YES. There is no minimum requirement for the number of employees.

Q: I have a minority- and/or woman-owned business. Will this certification also serve to recognize me under those distinctions?
A: NO. The Hudson Initiative is a race- and gender-neutral certification. Find out where you can go to get certified as a woman- or minority-owned business.

Q: My business is located in Texas, but I would like to do business with the State of Louisiana. Would I qualify?
A: NO. The business and owner must be based in Louisiana.

FAQs

Q: Once I get certified, will I automatically be given contracts?
A: NO. The Hudson Initiative is a goal-oriented certification program, but there are no contracts set aside for certified businesses. You need to register your business with the Office of State Purchasing in order to learn about current bid opportunities in your industry.

Q: I am a Hudson-certified company. What do I need to do to start receiving information about purchasing and contracting opportunities?
A: You need to register your business with the Office of State Purchasing in order to learn about current bid opportunities in your industry.

Q: I got certified in Hudson years ago, but have not kept up with my certification. What do I need to do to get back in the program?
A: If you have not been submitting your annual updates, as required, you will need to go through the application process again. You can apply online at www.ledsmallbiz.com.

Q: How long does it take for my application to be reviewed?
A: Applications will be reviewed and an email will be sent notifying you of your status within two business days.

Q: Where do I find a list of Hudson-certified clients?
A: Go to www.ledsmallbiz.com and click on the link under the program headers to find the list of Hudson-certified businesses.

Q: How can I learn more about creating bid proposals?
A: Contact the Louisiana Procurement Technical Assistance Center for help with the marketing and bidding process, and post-award and contract management.

Q: Where can I find more information about doing business with the State?
A: Visit the Vendor Center page on the Office of State Purchasing’s website for additional information for vendors, including the annually updated guide on “How to Do Business with the State of Louisiana.”

Q: What does “not dominant in its professional field” mean?
A: You are not the dominant business in your professional field, meaning that you are not the primary business in your industry. For example, if your business was the largest widget manufacturer in the country, you would be considered dominant in your field, and would not qualify.

Q: Where can I go to find out more about the benefits of the program?
A: For additional information on the benefits listed, you can reference the following documents: The Small Purchases Executive Order, governing small purchases, and the 10% Allowance on Requests for Proposals.

Economic Gardening Initiative

Louisiana Economic Development’s Economic Gardening Initiative provides Louisiana-based small businesses with the information they need to grow and succeed. Through accelerated technical assistance and research, an experienced economic gardening team will provide customized services tailored to your business needs, including:

  • Review of core strategies, including threats and opportunities, business strategy and niche markets
  • Business development opportunities through market research and qualified sales leads
  • Improved internet presence by increasing your company’s visibility and credibility within the market, and advice on how to best use technology to connect with customers
Eligibility

In order to qualify for the Economic Gardening Initiative, a business must meet the criteria described below.

  • Principal Place of Business – The company must have maintained its principal place of business in Louisiana for at least the last two years
  • Annual Revenue – The company must have annual revenue between $600,000 and $50,000,000
  • Employees – The company must employ at least five but not more than 100 employees
  • Growth – The company must demonstrate growth in annual revenue and/or jobs in two of the last five years
  • External Markets – The company must deliver products or services to customers outside the company’s local market area or demonstrate the capacity to do so
  • Target Industries – The company must be in a target industry such as manufacturing, finance and insurance services, administrative services and emerging industries, as identified by Louisiana Economic Development (retail stores and restaurants are specifically excluded)
  • Lawful Function – The company must be organized for profit to perform a lawful, commercially useful function
Getting Started

To take advantage of LED’s Economic Gardening Initiative and its accelerated technical assistance and research capabilities, complete the online application at louisiana.nationalcentereg.org.

For more information on the Economic Gardening Initiative, contact:

Christopher Cassagne
Business Development Officer, Small Business Services
christopher.cassagne@la.gov
225.342.5882

Next Steps
  • LED reviews the online application.
  • Application status is emailed to the applicant within 72 hours.
  • Accepted companies receive an introductory email welcoming them to the program, along with instructions on how to access and navigate the online workspace.
  • An LED staff member contacts the applicant company to facilitate meeting dates and times for two conference calls between the CEO and the Team Leader of the National Strategic Research Team.
  • The initial conference calls begin the economic gardening engagement, which consists of up to 35 hours of professional research and consulting by the National Strategic Research Team.
Eligibility Scenarios

Q: My business is currently receiving LED incentives. Am I still eligible to participate in Economic Gardening?
A: Yes. Your participation in other LED incentives does not preclude you from receiving assistance through Economic Gardening.

Q: I just sold my business to an out-of-state company but continue to operate it from a Louisiana location. Can we receive economic gardening assistance?
A: No. Subsidiary companies are considered to be a part of the parent company. Since the parent company is not Louisiana based, it would not be eligible for this program.

Q: My company is looking to expand its business throughout Louisiana but we do not have the capacity to grow beyond the state’s borders at this time. Can economic gardening help me expand only within Louisiana?
A: Every company is evaluated on a case-by-case basis; therefore, there is not a blanket answer that would apply. Economic gardening supports companies looking to expand outside of their traditional market area, preferably out of state, in an effort to increase and accelerate wealth creation throughout the state.

FAQs

Q: What is Economic Gardening?
A: Economic Gardening is an innovative economic development strategy that utilizes secondary market research to help entrepreneurs find new customers, increase revenues, create new jobs and generate new investments in our state.

Q: What is a second-stage growth company?
A: The definition of a second-stage growth company can vary somewhat, but it typically refers to a company that has grown past the startup stage but has not reached the point of maturity. It is also a company where the CEO is transitioning out of total control and into a more strategic role while professional managers are added to run key parts of the company. The firm still does not have the capacity to retain a full-scale professional management team. In Louisiana, a second-stage growth company is one with five or more employees, but not more than 100, and has annual revenues that exceed $600,000 but are less than $50,000,000.

Q: What is the cost to participate?
A: There is no cost to participate in the Economic Gardening Initiative.

Q: What are the services offered through economic gardening?
A: Through accelerated technical assistance and research, an experienced national economic gardening team will provide customized services tailored to meet individual business needs. Following an initial team call where the CEO outlines their current strategy and needs, the National Strategic Research Team begins to provide research reports, recommendations and data lists for the company to implement within its growth strategy. Research areas include market research/competitive intelligence, geographic information systems, core strategy review, and internet/social media/search engine optimization strategies.

Q: How long does the program engagement last?
A: The entire engagement lasts between three and six weeks on average. The length of time is usually determined by factors such as complexity of the issues, availability of relevant research information, and CEO involvement and availability.

Q: How much time should I plan to dedicate to this engagement?
A: Many of the CEOs we have interviewed after their engagement have told us that they spent between eight and twelve hours directly involved in the process.

Q: Are these services offered by other organizations?
A: The type of support given to second-stage growth companies through economic gardening is unique in that it provides a Fortune 500-quality research team to help your business grow. The services are complementary to other support organizations and add value on top of services provided by chambers, small business development centers and regional economic development organizations.

Q: What is economic gardening and how can it help me as the CEO of a growing company?
A: Economic gardening is an innovative, entrepreneur-centered approach to economic development. Technical assistance provided by a team of national experts can lead your company to new heights. Learn more about what economic gardening can do for your growth business.

Q: As the leader of an Entrepreneur Support Organization, why should I refer my clients to economic gardening?
A: Referring clients to other state-supported services such as economic gardening can help build trust, increase effectiveness, and strengthen the entrepreneurial culture in Louisiana. Learn more about the benefits to your organization.

SBA Loans

If you’re planning to start a business or expand an existing business, you might need financing help. SBA participates in a number of loan programs designed for business owners who may have trouble qualifying for a traditional bank loan.

To start the process, you should visit a local bank or lending institution that participates in SBA programs. SBA loan applications are structured to meet SBA requirements, so that the loan is eligible for an SBA guarantee. This guarantee represents the portion of the loan that SBA will repay to the lender if you default on your loan payments.

The SBA Loan Application Checklist provides a listing of forms and documents you and your lender will need to create a loan package to submit to SBA.

The following are direct links to information about commonly requested SBA programs:

Starting and Expanding Businesses
  • Basic 7(a) Loan Program – Gives 7(a) loans to eligible borrowers for starting, acquiring and expanding a small business. This type of loan is the most basic and the most used within SBA’s business loan programs. Borrowers must apply through a participating lender institution.
  • Microloan Program – Offers very small loans to start-up, newly established or growing small business concerns. SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $50,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.
Disaster Loans
  • Disaster Assistance Loans – Provide financial assistance to victims of disasters or to individuals in a declared disaster area. You may be eligible for this type of loan even if you don’t own a business.
  • Economic Injury Loans – Assist small businesses, small agricultural cooperatives and nonprofit organizations as they recover from economic losses resulting from physical disaster or an agricultural production disaster.
Export Assistance Loans
  • Export Express – Provide exporters and lenders with a streamlined method of obtaining financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. SBA provides an expedited eligibility review with a response in less than 24 hours.
  • Export Working Capital – Offers loans targeted at businesses that are able to generate export sales but need additional working capital to support these opportunities.
  • International Trade Loans – Gives term loans that are designed for businesses that plan to start/continue exporting or those that that have been adversely affected by competition from imports. The proceeds of the loan must enable the borrower to be in a better position to compete.
Veteran and Military Community Loans
  • Military Reservist Economic Injury Disaster Loan – Offers funds to eligible small businesses to meet ordinary and necessary operating expenses that could have been met, but are unable to meet, because an essential employee was “called-up” to active duty in their role as a military reservist.
Special Purpose Loans
  • CAPLines – Help small businesses meet their short-term and cyclical working-capital needs through the SBA umbrella program called CAPLines.
  • Pollution Control Loans – Provides financing to eligible small businesses for the planning, design or installation of a pollution control facility.
  • U.S. Community Adjustment And Investment Program (CAIP) – CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by the North American Free Trade Agreement (NAFTA). To be eligible, a business must reside in a county noted as being negatively affected by NAFTA, based on job losses and the unemployment rate of the county.

Digital Interactive Media and Software Development Incentive

Louisiana’s 35% Digital Interactive Media and Software Development refundable tax credit — the strongest of its kind in the nation — is helping traditional and digital companies of all sizes gain a competitive edge.

  • Provides a 35% tax credit on payroll for in-state labor
  • Offers a 25% tax credit for qualified production expenses made in Louisiana
  • No cap and no minimum requirement
  • Effective Jan. 1, 2012, the tax credit is available at the end of each year for a refund of 100% of its value claimed on Louisiana state tax return OR certified applicants can receive 85% of the value earned as a rebate any time during the year
Eligibility

The incentive is open to all Louisiana digital interactive media and software development projects that are not regulated under Louisiana Gaming Control Laws. The refundable tax credit does not apply to software developed for institutional, private or internal purposes and excludes largely static Internet sites. Only work physically performed in Louisiana and only direct development equipment purchased through Louisiana businesses qualifies for the incentive.

Qualifying development products include:

  • Digital Media and Games
  • Web-based and Mobile Applications
  • Consumer Software
  • Entertainment Software
  • Business and Enterprise Software
  • Interactive Devices and Consoles
  • Embedded Systems

What qualifies as a Louisiana business?

  • Registered with the Secretary of State
  • Physically located in Louisiana
  • Posted hours of business
  • At least one full-time employee

*Note: Beginning July 1, 2011, eligible expenditures start six months from initial certification date (acceptance into the program) — R.S. 47:6022.

Eligible Labor Expenses

  • Project Managers
  • Quality Assurance
  • Engineers
  • Programmers
  • Game Designers
  • Industrial Designers
  • Composers
  • Artists
  • Legal Staff
  • Management R&D/Engineering

Non-Eligible Labor Expenses

  • Customer Service Staff
  • Business Development/Sales Staff
  • C-level Executive Compensation
  • Assistants/Secretaries
  • Marketing/PR Staff
  • Accounting/Financial Staff
  • Clerical Staff
  • Installation Staff
  • Janitorial/Maintenance Staff
  • Human Resources
  • Miscellaneous Administrative/Payroll
  • Manufacturing Staff

Eligible Production Expenses

  • Production equipment directly related to development (Hardware/Software)
  • Allocated rent for where direct development occurs
  • Office supplies (related to development)
  • Licenses/permits for development

Non-Eligible Production Expenses

  • Furniture and fixtures
  • Relocation expenditures
  • Domain license fees
  • Hosting
  • Payroll processing fees
  • Indirect production equipment (Hardware/Software)
  • Entertainment expenditures
  • Communications (telephone, cell phone, etc.)
  • Utilities
  • State/local taxes
  • Advertisements
  • General insurance for business operations
  • Interest paid on loans
  • Auto rental/mileage
  • Parking/fare expenditures
  • Travel expenditures
  • Internet
  • Food
  • Recruiting/hiring expenditures
  • Manufacturing expenditures
  • Lodging/housing of staff
  • Finance fees

Program Statutes & Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

This download includes the application, helpful tips and instructions on completing the form.

Download Application

Next Steps

Initial Certification (60 to 90 days)

1. The applicant submits an application and preliminary budget to OEID. The preliminary budget should describe all the expenditures related to the development of the project. For example:

2. The application and preliminary budget are received by LED, and the applicant is notified via email that both were received.

3. The application and preliminary budget are reviewed for completeness, and the applicant is then sent a standard list of compliance questions.

4. The application, preliminary budget and compliance questions are reviewed by OEID staff. OEID staff will contact applicant and discuss any follow-up that’s needed to determine eligibility.

5. Once approved, an initial certification letter is drafted and sent to the applicant.

Tax Certification (60 to 90 days)

1. Company submits a cost report of expenditures by mail or email to LED for certification of credits. (This step occurs after actual expenditures occur and at a time frame determined by the applicant — usually once a calendar year.)

2. The cost report is then reviewed by OEID staff and additional documentation may be requested at this step.

3. Once approved by both the Director of Digital Media and legal staff, the tax credit certification is then issued to the applicant.

4. To redeem the tax credit, by the original applicant or another party, one works with a designated representative from the Louisiana Department of Revenue.

Eligibility Scenarios

Q: My company recently applied to the program and I have a very large development project with work dating back to 2005. Can I collect tax credits on expenses dating back to 2005?
A: NO. Beginning on July 1, 2011, qualifying expenditures can only begin six months from the date of initial certification (the date LED approves the project) — LA R.S. 47:6022. The typical processing time for most initial certifications can take up to 90 days, resulting in approximately three months of eligible historical expenditures.

Q: My company is planning to develop a project that will involve voluminous content including image files, music files and video files. Are the costs associated with this content eligible expenditures?
A: YES. Content including image files, music files and video files are eligible expenditures in the development stage up to the commercial release of the product. Updates to content after the commercial release of the product are non-eligible expenditures.

Q: My company is planning to develop a Software as a Service (SAAS) application. Part of the project involves an entirely new distribution network and several servers to run the service. Are the costs associated with purchasing this equipment eligible expenses?
A: NO. Eligible equipment includes equipment that is used entirely for the development of the product. Equipment used to distribute the product is considered non-eligible equipment because it is considered outside the development stage.

FAQs

Q: What is Digital Interactive Media?
A: In the context of Louisiana’s Digital Interactive Media program, it’s essentially an interactive software product (e.g. video game, training software, web platform, etc.) that’s built for commercial export and not for the producer’s internal use.

Q: Is Louisiana’s Digital Interactive Media Incentive a grant program?
A: NO. It is an incentive that awards state tax credits to producers of Digital Interactive Media.

Q: What’s a tax credit?
A: A tax credit is a credit that can be used against Louisiana tax liability. In the case of the Digital Interactive Media program, it’s a refundable credit with an option for an 85% rebate.

Q: What can I do with the tax credits once I receive them?
A: Firstly, you can cover your Louisiana state tax liability. Since the credits awarded in the Digital Interactive Media Program are refundable, the remainder of the credits are considered an overpayment and refunded to the applicant by the Department of Revenue. There is also an option to take the value of the credits as a one-time rebate (any time during the year) at 85% of their original value.

Q: Will I need to hire anyone to help me apply for the program?
A: LED’s Office of Entertainment Industry Development has full-time staff members whose job it is to help companies through the process of applying for and receiving the Digital Interactive Media tax credit. We strive to continually improve the transparency and ease with which firms can apply and enter the program.

Q: Will I need to hire a CPA?
A: YES. However, a CPA is only needed at the end of the process. Due to an alteration in the 2009 legislative session, the program no longer requires an audit, but instead a cost report performed by a CPA. (For more information on the steps involved in participating in the program, please see the sections titled “Applying” and “After Application.”)

Q: How much will I receive back in tax credits for what I spent?
A: Digital Interactive Media projects are awarded a 25% tax credit on qualified production expenses paid to a Louisiana entity/vendor, and labor costs (for Louisiana residents) are awarded an additional 10% (an effective 35% total awarded on labor costs paid to Louisiana residents).

Q: Can I still get tax credits for hiring out-of-state labor?
A: Any qualified expenditures can receive the tax credit award of 25%, regardless of whether the labor is performed by Louisiana residents, so long as the work is done in the state of Louisiana. All labor must be verified to have been performed in Louisiana, and any work performed outside of the state would not qualify.

Q: What project expense costs qualify?
A: The simple answer is costs that are directly related to the project development itself. This includes items such as hardware and software, labor and lease costs — but not for costs associated with running the company (administrative, clerical, etc.) or marketing/distributing the product.

Q: What is considered eligible equipment?
A: Equipment such as computer hardware and software purchased from a Louisiana business for the direct development of the product is considered eligible. Furniture and fixtures do not qualify for the program.

Q: What constitutes a purchase made in Louisiana?
A: An expenditure paid to a Louisiana company that has an active registration with the Louisiana Secretary of State and has a physical presence in the state, posted business hours and at least one full-time employee.

Q: Is there a minimum investment?
A: For the Digital Interactive Media Program, there is no minimum spend required.

Q: Is there a maximum for how many tax credits my project or company can receive?
A: There isn’t a maximum amount of tax credits that a project or company can earn, nor is there a cap on the program as a whole.

Q: Can this incentive be used in combination with other LED incentives?
A: LED has many business incentives, some of which may be combined with the Digital Interactive Media Incentive. Other incentives may carry their own “anti-stacking” clauses, and the various branches of LED can work with your firm to see what you might be eligible for.

Q: Can this incentive be used in combination with LED’s Quality Jobs program?
A: A specific exclusion in the Digital Media Program prohibits a firm from taking advantage of both the additional Digital Media Incentive as well as LED’s Quality Jobs program for the same employee. However, a firm may have some employees enrolled in the Quality Jobs program, while others are claimed under the Digital Media incentive.

Q: Before I can apply, do I have to begin production or spend any money in the state?
A: An applicant can apply before beginning production or expending funds in Louisiana.

Q: I started spending money in Louisiana before I received initial certification. Can I still claim what I’ve spent?
A: Under the law, a company can claim their first expenditure on a project six months prior to the date their project is approved (initially certified) for the program.

Q: How much does it cost to apply for each project?
A: Application to the Digital Interactive Media Program does not carry a fee.

Q: If I apply, does that obligate me to do the production in Louisiana?
A: NO. An applicant to the Digital Interactive Media Program is not obligated to expend funds in the state — even after an application has been pre-certified.

Q: Should companies apply once, together?
A: NO. Firms interested in joining the program should separately apply for each project. By doing this, we can more easily separate production costs and tax credits awarded.

Q: Does my project qualify?
A: The best way to determine this is to apply. Applying to the program is free, and the form should take less than half an hour to complete. If you have any questions about filling out the application, please contact Chris Stelly atcstelly@la.gov.

Q: When do I receive my tax credits?
A: Tax credits are issued with a project’s final certification.

Q: How do I know if my project has been accepted into the program?
A: As soon as we’ve had a chance to review and clear up any outstanding issues in the application (which we strive to complete as quickly as possible), we will then send the applicant a letter of “pre-certification” that acknowledges a project’s applicable expenditures of those proposed in the application.

Q: Do expenditures related to website related content qualify for the program?
A: YES. Expenditures related to web content (pictures, video, etc.) do qualify up to the first commercial release of the product.

Small Business Loan and Guaranty Program

The Small Business Loan and Guaranty Program facilitates capital accessibility for small businesses by providing loan guarantees to banks and other small business lenders in association with the federal State Small Business Credit Initiative (SSBCI). The program’s purpose is to provide financial assistance, which will help with the development, expansion and retention of Louisiana’s small businesses. The program is administered by Louisiana Economic Development through Louisiana Economic Development Corporation (LEDC).

  • Guarantees may range up to 75% of the loan amount, not to exceed $1.5 million.
  • Guarantee fee may be waived (determined by risk).

Loan Amount: $5,000 to $1.5 million
Maximum Guarantee: 75%
Minimum Equity Requirement: 15% to 20%
Application Fee: $0
Quick Turnaround for Loans: $350,000 or less

Eligibility
  • Must be a Louisiana small business (as defined by the Small Business Administration)
  • Must be domiciled in Louisiana
  • Owners or principal stockholders shall be Louisiana residents
  • For loans of $100,000 or less, there must be one new permanent job or one retained job
  • For loans over $100,000, there must be two new permanent jobs created

Program Rules: 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

Getting Started

Submit your completed business plan or project proposal to a Louisiana bank and establish a relationship with a lending officer. A completed application form must be submitted to LEDC by the bank or other commercial lending entity seeking the loan guaranty.

For more information on the Small Business Loan and Guaranty Program, contact:

Steven Baham
Manager, Business Incentives Services
steve.baham@la.gov
225.342.1940

Susan Bigner
Program Administrator, Loan and Investment Programs
susan.bigner@la.gov
225.342.5651

Christian Pennington
Program Administrator, Loan and Investment Programs
christian.pennington@la.gov
225.342.5883

Shamelda Pete
Program Administrator, Business Incentive Services
spete@la.gov
225.342.5341

Next Steps

After you have completed a business plan or a loan proposal, you are ready to start your business or expansion project and proceed as follows:

  • The borrower must first contact a local commercial lending institution to discuss their lending needs, preferably an entity that is willing to entertain such a loan with the prospect of a guaranty. (Note: The financial institution will be responsible for determining the eligibility of each potential borrower.)
  • The lending institution will then contact LEDC for qualification and submit a complete application, analysis, proposed structure and commitment. (Note: The commitment can be contingent upon an LEDC guaranty.)
  • The LEDC staff will evaluate the loan application, review the bank’s credit analysis and then make recommendations to the appropriate LEDC approval body.
  • The lending institution and applicant will be notified of the loan guaranty decision after review of the application packet by the appropriate LEDC committee/board.
  • LEDC’s legal counsel will prepare a guaranty agreement outlining the conditions and covenants upon which the loan guaranty has been approved.
Eligibility Scenarios

Q: My business is a startup. Can my bank obtain a guaranty for the loan I’m applying for?
A: Your business must meet the following criteria to be eligible for guarantee:

  • Must be a Louisiana small business as defined by the Small Business Administration (SBA).
  • Must be domiciled in Louisiana.
  • Owners or principal stockholders shall be Louisiana residents.
  • For loans of $100,000 or less, there must be one new permanent job or one retained job.
  • For loans over $100,000, there must be two new permanent jobs created.
  • A borrower must have 20% of the loan amount for a startup operation or acquisition and no less than 15% for an expansion.
  • Equity is defined as:
  • Cash
  • Paid-in capital
  • Paid-in surplus and retained earnings
  • Partnership capital and retained earnings

Q: My sales revenue was $2.5million dollars last year. Does my business meet LEDC’s definition of a small business?
A: LEDC uses the SBA definition and criteria to determine if a business is considered a small business. SBA defines a small business as one that is independently owned and operated, is organized for profit and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding 12 months or on sales volume averaged over a three-year period. Examples of SBA general size standards include the following:

  • Manufacturing: Maximum number of employees may range from 500 to 1,500, depending on the type of product manufactured.
  • Wholesaling: Maximum number of employees may range from 100 to 500, depending on the particular product being provided.
  • Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided.
  • Retailing: Annual receipts may not exceed $5 to $21 million, depending on the particular product being provided.
  • General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on the type of construction.
  • Special Trade Construction: Annual receipts may not exceed $7 million.
  • Agriculture: Annual receipts may not exceed $0.5 to $9 million, depending on the agricultural product.
FAQs

Q: Who is eligible to apply for the program?
A: Small businesses domiciled in Louisiana (see the Small Business Administration’s definition of a small business).

Q: Does the borrower have to create new jobs with a startup, expanding or acquisition business?
A: The business must either create or retain one job for loans under $100,000 or two jobs for loans above that amount.

Q: Does the borrower initially contact the bank or lending institution to apply for a guarantee?
A: The borrower is required to contact the bank or lending institution directly to apply. The lender then works directly with LEDC.

Q: Are there any program fees?
A: There’s no application fee. The guaranty fee may be waived (determined by risk).

Q: How long does the process take?
A: It takes anywhere from one to three weeks to process a guaranty. The specific length of time is determined by the approving body that is required for the guaranty. Loans for $350,000 or less will have a quicker turnaround.

Q: Is there a maximum loan amount?
A: There is no maximum loan amount. However, maximum guarantee amount is $1.5 million dollars.

Q:What types of financing are eligible in the Small Business Loan and Guaranty Program?
A:

  • Revolving Lines of Credit
  • Startups
  • Acquisitions
  • Fixed assets purchases
  • Purchase or construction of building (limited to 51% applicant occupancy)

Q: What types of businesses are not eligible in the Small Business Loan and Guaranty Program?
A:

  • Restaurants (regional or national franchises will be considered)
  • Bars and saloons
  • Gaming businesses
  • Real estate speculations
  • Recreational, theme or amusement parks
  • Parks or camping facilities

Q: How much equity does a business need to be eligible for a LEDC Guarantee?
A: The minimum equity requirement for a startup business or business acquisition is 20%. Existing businesses must have a 15% equity injection. Equity is defined as:

  • Cash
  • Paid-in capital
  • Paid-in surplus and retained earnings
  • Partnership capital and retained earnings

Q: Who determines if a small business owner gets approved for a loan?
A: This program is administered by Louisiana Economic Development through the Louisiana Economic Development Corporation, which will make decisions as to the approval of the loan guaranty. However, the bank or lending institution makes all decisions relevant to the approval of the loan.