Businesses impacted by the coronavirus pandemic but not typically eligible for state economic incentive programs could start getting tax breaks until 2023.
Some retailers, hotel operators, restaurants and even bars are expected to begin qualifying for the state's Enterprise Zone and Quality Jobs programs if those businesses have no more than 50 employees nationwide. Eligibility is retroactive to July 1.
The program is expected to extend to employees rehired by companies as long as those employees worked for the business at least one year. The program also usually requires health insurance for workers, but the rules were amended so that only businesses federally required to offer health insurance must do so.
State economic development leaders are holding a public hearing starting at 9 a.m. Friday in the La Salle Building downtown to solicit comment about these proposed rule changes.
The estimated impact to state revenue would only amount to roughly $2.3 million less in state taxes collected between 2020 and 2023 between the Quality Jobs and Enterprise Zone programs. That's if 1% of potentially eligible companies are able to qualify for 4% cash rebate with five employees who are each paid at least $18 an hour full time through the Quality Jobs program and an undisclosed number of businesses apply for the amended Enterprise Zone program.
Quality jobs usually is a cash rebate to companies up to 6% for no more than 10 years in addition to state sales and use tax rebate on capital expenditures. Typically the types of eligible businesses are in biotechnology, micromanufacturing, software, clean energy technology, food technology or advanced materials in addition to manufacturers and oil and gas companies.
Jobs which pay at least $18 an hour could see up to 4% cash rebate on payroll taxes and for jobs that pay $21.66 per hour the rebate could reach 6%, according to the quality jobs program amendment.
However, H-1B visa holders, or professional foreign-born workers, are not eligible for tax breaks, according to the amendment. Retailers must prove a physical presence in Louisiana, which was shuttered by state mandate through the governor's emergency order in March to help control the coronavirus.
The state's Enterprise Zone program is a tax credit of either $3,500 one-time or $1,000 for each new job in addition to a rebate of state sales and use taxes on materials such as machinery or equipment or 1.5% refundable investment tax credit on the total value of the capital investment.
Businesses must create at least five jobs in an Enterprise Zone or certify that at least half of its employees live in a historically disadvantaged neighborhood or have received public assistance. Only retailers with fewer than 100 employees and hotels with 50 employees or fewer are eligible, according to the amendment. Under the amended program, only employees who were previously receiving public assistance would qualify for $3,500 per job while others would be reimbursed for $1,000.