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Tax and Other Incentives for Entrepreneurship in Louisiana

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This panel was presented by Scott Whittaker, Member at Stone Pigman. Find out more at http://www.stonepigman.com.

This panel was presented by Scott Whittaker, Member at Stone Pigman. Find out more at http://www.stonepigman.com.

Published in Law , Business , Economy & Finance
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  • 1. THE IDEA VILLAGE NEW ORLEANS ENTREPRENEUR WEEK   TAX  AND  OTHER  INCENTIVES  FOR   ENTREPRENEURSHIP  IN  LOUISIANA     NEW  ORLEANS,  LA   MARCH  27,  2014    
  • 2. Sco5  T.  Whi5aker,  Stone  Pigman  Walther  Wi?mann  LLC       Charlie  Romaine,  Louisiana  Economic  Development     Daniel  J.  Walter,  Stone  Pigman  Walther  Wi?mann  LLC       Brandon  A.  Lagarde,  Postlethwaite  &  Ne?erville,  APAC     Arman  Sadeghpour  PhD,  Theodent         Introductions
  • 3. BUSINESS  INCENTIVES   OpportunityLouisiana.com   Charlie  Romaine  Assistant  Director  BERG      
  • 4.     2 LOUISIANA  ECONOMIC  DEVELOPMENT     Website  Homepage            www.OpportunityLouisiana.com      
  • 5. LOUISIANA  ECONOMIC  DEVELOPMENT     An  interacJve  tool  allowing  a  business  to  discover  which  incenJves  their  business  may  be   eligible  for  and  the  potenJal  tax  benefits.     •   Am  I  eligible  for  any  incenJves  offered  in  Louisiana?   •   What  is  my  potenJal  tax  benefit?   •  What  are  my  next  steps  to  receive  these  incenJves?   §  Takes  less  than  15  minutes  to  navigate  through  the  eligibility  quesJonnaire  for  all  LED   administered  programs.         §  To  get  started  visit:   h?p://incenJveevaluator.louisianaeconomicdevelopment.com/Welcome.aspx   Louisiana  IncenOve  Evaluator   3
  • 6. 4 Part  I:    Louisiana  Economic  Development  CorporaOon                Small  Business  Loan  and  Guaranty  Program                                                 Part  II:    Board  of  Commerce  and  Industry          Industrial  Tax  ExempOon  Program        RestoraOon  Tax  Abatement  Program        Quality  Jobs  Program        Enterprise  Zone  Program     AGENDA  
  • 7. SMALL  BUSINESS  LOAN  AND  GUARANTY   PROGRAM  
  • 8. SMALL  BUSINESS  LOAN  AND  GUARANTY  PROGRAM   §  Loan  assistance  program:  provides  up  to  75%  loan  guarantees          or  state  direct  loan  parJcipaJons  up  to  40%  to  facilitate  capital  accessibility   §  Loan  guarantees  ranges  from  $5,000  minimum  to  $1.5  million     Benefit:   6 Eligibility  (not    comprehensive):   §   Must  increase  employment  within  specified  Jme  frame   §   Must  hire  35%  of  new  workers  from  one  of  four  targeted  groups  
  • 9. •     Revolving  Lines  of  Credit   •     Startups   •     AcquisiJons   •     Expansions   •     Fixed  asset  purchases   •     Purchase  or  construcJon  of                    building  (limited  to  51%  applicant    occupancy)   •     Restaurants  (except  franchises)   •     Bars  and  Saloons   •     Gaming  businesses   •     Real  estate  speculaJon   •     RecreaJonal,  theme  or          amusement  parks   •     Camping  faciliJes     SMALL  BUSINESS  LOAN  AND  GUARANTY  PROGRAM   Eligible  Loan  Types   Ineligible  Loan  Types   7
  • 10. Accoin  Louisiana   BanCorp  South   Community  Trust  Bank   Farmers-­‐Merchant  Bank  &  Trust   Home  Bank   Iberville  Bank   Jeff  Davis  Bank   MidSouth  Bank,  NA   Regions  Bank   Synergy  Bank   Whitney  Bank   First  Bank  and  Trust   American  Gateway  Bank   Capital  One,  NA   Enterprise  Corp  of  the  Delta   Guaranty  Bank  &  Trust   IberiaBank   Investar  Bank   Liberty  Bank   Red  River  Bank   Seedco  Financial   Teche  Federal  Bank   First  NBC   Co?onport  Bank       SMALL  BUSINESS  LOAN  AND  GUARANTY  PROGRAM     LIST  OF  BANKS  AND  FINANCIAL  INSTITUTIONS   8
  • 11. CONTACT OpportunityLouisiana.com @LED Louisiana 9 Seth  Brown     Loan  Investment  Officer   Louisiana  Economic  Development   225-­‐342-­‐5254   Seth.Brown@la.gov   ChrisOan  Pennington   Loan  Investment  Officer   Louisiana  Economic  Development   225-­‐342-­‐5883   ChrisJan.Pennington@la.gov   Susan  Bigner   Loan  Investment  Officer   Louisiana  Economic  Development   225-­‐342-­‐5651   Susan.Bigner@la.gov  
  • 12. INDUSTRIAL  TAX  EXEMPTION  PROGRAM   OpportunityLouisiana.com  
  • 13. INDUSTRIAL  TAX  EXEMPTION  PROGRAM     §  Property  tax  abatement:  provides  a  100%  property  tax    abatement  for  up  to  10  years  on  manufacturer’s  qualifying        capital  investments       ELIGIBILITY  (not  comprehensive)     §   Applies  only  to  capital  investments  by  Louisiana  manufacturers   §   Property  must  remain  on  the  site  at  all  Jmes     BENEFIT     11
  • 14. CONTACT OpportunityLouisiana.com @LED Louisiana 12 Lori Weber Program Administrator Louisiana Economic Development 225-342-6442 Lori.Weber@la.gov
  • 15. RESTORATION  TAX  ABATEMENT  PROGRAM   OpportunityLouisiana.com  
  • 16. RESTORATION  TAX  ABATEMENT  PROGRAM     BENEFIT   Property  tax  abatement:  provides  five-­‐ year  100%  abatement  for  the   rehabilitaJon  of  an  exisJng  structure   based  on  assessed  valuaJon  of  property   prior  to  beginning  of  improvements     ELIGIBILITY  (not  comprehensive)   Must  be  located  in  a  qualifying  district  and                       approved  by  local  governing  authority.   Does  not  exempt  the  acquisiJon  cost  of  the         structure. Contact: Allison Saunders Tax Incentives Director Culture Recreation and Tourism Division of Historic Preservation (225)342-8155 asaunders@crt.la.gov 14
  • 17. CONTACT OpportunityLouisiana.com @LED Louisiana 15 Becky Lambert Program Administrator Louisiana Economic Development 225-342-6070 Becky.Lambert@la.gov
  • 18. Quality  Jobs  Program   OpportunityLouisiana.com  
  • 19. 17   §  Provides  a  cash  rebate  to  companies   creaJng  well-­‐paid  jobs  and  promote   economic  development.         §  5% or 6% rebate on annual gross payroll of new, direct jobs §  Sales/use tax rebate or Investment Tax Credit (If the Enterprise Zone hiring requirements and certifications are met) §  Five year contract with an option to renew for an additional five years.   QUALITY JOBS BENEFITS OVERVIEW
  • 20. 18 QUALITY JOBS §  Business must be in one of the following industries: Bioscience, manufacturing, software, environmental technology, food technology, advanced materials or oil and gas field service or §  At least 50% of total annual sales are to out-of-state and/or to in-state customers or buyers if the product or service is resold by the purchaser to an out-of-state customer or buyer, or to the federal government. or §  Must be located in a LED designated distressed region. A distressed region shall be either of the following: •  A parish within the lowest 25% of parishes based on per capita income. •  A census tract block group below the state median per capita income. ELIGIBILITY (not comprehensive)      
  • 21. CONTACT OpportunityLouisiana.com @LEDLouisiana Frank Favaloro Program Administrator 225-342-5402 Frank.Favaloro@la.gov Becky Lambert Program Administrator 225-342-6070 Becky.Lambert@la.gov 19
  • 22. ENTERPRISE  ZONE  PROGRAM   OpportunityLouisiana.com  
  • 23. 23 ENTERPRISE ZONE PROGRAM OVERVIEW   The  Enterprise  Zone  Program (EZ)  is  a  jobs  incenJve  program  that  provides  tax  relief/ benefits  to  businesses  located  in  Louisiana  creaJng  permanent  net  new  full  Jme  jobs.     Ø  Of  the  permanent  net  new  full-­‐Jme  jobs  created  50%  of  these  new  jobs  must   meet  one  or  more  of  the  program  cerJficaJon  requirements:   •     Residency     •     Public  Assistance       •     Lacking  Basic  Skills   •     Unemployable  by  TradiJonal  Standards     21
  • 24. ENTERPRISE  ZONE  PROGRAM     §  One  Ome  $2,500  Job  Tax  Credit  (JTC)   §  For  each  permanent  net  new  job  created  This  credit  can  be  applied  towards  your  Louisiana   income  and/or  franchise  tax  liabiliJes.  The  JTC’s  earned  cannot  be  sold  or  transferred.   AND     §  4%  State  Sales  and  Use  Tax  Rebate   §  Rebate  is  claimed  against  and  calculated  on  state  taxes  paid  on  qualifying  materials,   machinery,  furniture,  and  equipment  purchased  associated  with  the  total  investment.     OR   §  1.5%  Refundable  Investment  Tax  Credit  (ITC)   §  Refund  is  calculated  on  your  total  capital  investment,  excluding  tax  exempted  items.        NOTE:      A  business  does  not  have  to  make  a  capital  investment  to  par5cipate  in  the        Enterprise  Zone  Program,  only  create  permanent  net  new  full  5me   jobs.             BENEFITS   22
  • 25. ENTERPRISE  ZONE  PROGRAM        §  Create,  at  minimum,  5  permanent  net  new  full  Jme  jobs  within  24  months  of  project  start  date/ contract  effecJve  date;  or     §  Increase  exisJng  naJonwide  workforce  by  10%  within  the  first  12  months  of  the  project  start   date/contract  effecJve  date  ;  and     §  50%  of  the  net  new  full  Jme  jobs  created  must  meet  one  or  more  of  the  following      cerJficaJon  requirements:           •  Residency     •  Public  Assistance       •  Lacking  Basic  Skills   •  Unemployable  by  TradiJonal  Standards   ELIGIBILITY     23
  • 26. CONTACT OpportunityLouisiana.com @LEDLouisiana Roshonda Hanible Program Administrator 225-342-5382 Roshonda.Hanible@la.gov Joyce Metoyer Program Administrator 225-342-0485 Joyce.Metoyer@la.gov 24
  • 27. CONTACT OpportunityLouisiana.com @LED Louisiana 25 Charlie Romaine Assistant Director BERG Louisiana Economic Development 225-342-5444 Charlie.Romaine@la.gov
  • 28. New  Orleans   Entrepreneur  Week     March  27,  2014   Presented  by:     Daniel  J.  Walter   504.593.0826  |  dwalter@stonepigman.com   stonepigman.com
  • 29. Louisiana  Tax  IncenJves   Ø  Angel  Investor  Tax  Credit   Ø  Research  &  Development  Tax  Credit   Ø  Digital  InteracJve  Media  and  Sonware   Tax  Credit   Ø  Technology  CommercializaJon  Credit  and   Jobs  Program   stonepigman.com2
  • 30. Angel  Investor  Tax  Credit   Ø  Investment  in  a  cerJfied  Louisiana   Entrepreneurial  Business  (LEB)   Ø  Accredited  investors   §  Angel  pool   §  High  net  worth  individuals   §  EnJty  consisJng  of  accredited  investors   Ø  Tax  credit  of  35%  of  investment   §  Taken  over  5  years   stonepigman.com3
  • 31. Angel  Investor  Tax  Credit   Ø  Louisiana  Entrepreneurial  Business  (LEB)   §  Principal  business  operaJons  in  Louisiana   §  Greater  than  50%  of  sales  outside  Louisiana   §  50  or  fewer  full  Jme  employees   §  Not  primarily  engaged  in:   •  Retail  sales,  real  estate,  professional   services,  natural  resource  exploraJon  or   extracJon,  or  financial  services   stonepigman.com4
  • 32. Angel  Investor  Tax  Credit   Ø  ApplicaJon  Process   §  Apply  to  LED  for  cerJficaJon  as  a  LEB   §  Submit  applicaJon  for  reservaJon  of  credits   on  January  1   §  Receive  ReservaJon  Le?er   §  Submit  proof  of  investment  within  60  days   §  LED  issues  tax  credit  cerJficaJon  le?er  to   the  Investor   stonepigman.com5
  • 33. Angel  Investor  Tax  Credit   Ø  Contact   §  Richard  Broussard  –  Business  Development   Manager   •  broussard@la.gov   •  225.342.1940   stonepigman.com6
  • 34. Research  &  Development   Ø  Piggyback  on  the  Federal  R&D  Credit   Ø  Based  on  "qualified  research   expenses"  (QRE)   §  Wages  of  employees  conducJng  qualified   research   §  Costs  of  supplies  used  in  the  conduct  of   qualified  research   §  PorJon  of  contract  research  expenses   Ø  Qualified  Research   stonepigman.com7
  • 35. Research  &  Development   Ø  Amount  of  Louisiana  R&D  Credit   §  Greater  than  100  employees   •  8%  of  Louisiana  QRE  in  excess  of  the  base   amount   §  Between  50  and  99  employees   •  20%  of  Louisiana  QRE  in  excess  of  the  base   amount   §  Less  than  50  employees   •  40%  of  Louisiana  QRE   §  40%  of  Small  Business  InnovaJon  Research   Grant   stonepigman.com8
  • 36. Research  &  Development   Ø  ApplicaJon  Process   §  Submit  ApplicaJon  to  LED   •  Includes  descripJon  and  evidence  of   Louisiana  QRE   §  LED  approves  the  applicaJon   §  LED  noJfies  the  Louisiana  Department  of   Revenue   §  Claim  credit  on  tax  return   stonepigman.com9
  • 37. Research  &  Development   Ø  Contact   §  Eric  Burton  –  Program  Administrator   •  eric.burton@la.gov   •  225.342.5340   §  Shamelda  Pete  –  Business  Development   Officer   •  spete@la.gov   •  225.342.5341   stonepigman.com10
  • 38. Digital  InteracJve  Media   Ø  State-­‐CerJfied  Digital  InteracJve  Media   ProducJon   §  Includes   •  Video  or  interacJve  games   •  SimulaJon  sonware   •  InteracJve  educaJonal  or  training  programs   §  Excludes   •  Sonware  for  internal  use   •  StaJc  internet  sites   stonepigman.com11
  • 39. Digital  InteracJve  Media   Ø  Amount  of  Tax  Credit   §  25%  of  base  investment  in  Louisiana   •  ProducJon  expenses   •  Component  parts   §  35%  of  payroll   Ø  Credits  earned  in  the  calendar  year  in   which  the  funds  are  expended   Ø  No  cap   stonepigman.com12
  • 40. Digital  InteracJve  Media   Ø  ApplicaJon  Process   §  Apply  to  LED  for  cerJficaJon   §  LED  issues  iniJal  cerJficaJon  le?er   •  EffecJve  for  expenses  incurred  up  to  six   months  prior  to  the  date  of  the  le?er   §  Submit  cost  report  of  producJon   expenditures  prepared  by  CPA   §  LED  issues  final  tax  credit  cerJficaJon  le?er   §  Claim  credit  on  tax  return  OR  receive  85%   rebate  at  the  Jme  of  final  cerJficaJon   stonepigman.com13
  • 41. Digital  InteracJve  Media   Ø  Contact   §  Heath  Williams  –  Director  Digital  InteracJve   Media   •  heath.williams@la.gov   •  225.342.3571   stonepigman.com14
  • 42. Technology  CommercializaJon   Ø  Refundable  Tax  Credit  of  40%  of   commercializaJon  costs   §  Machinery  and  equipment   §  Fees  relaJng  to  IP   §  Payments  to  Louisiana  universiJes  under   research  agreements   §  Payments  for  clinical  research  or  trials   Ø  6%  payroll  rebate  for  new  direct  jobs   Ø  Requires  a  research  agreement  with  a   Louisiana  University   stonepigman.com15
  • 43. Technology  CommercializaJon   Ø  Contact   §  Shamelda  Pete  –  Business  Development   Officer   •  spete@la.gov   •  225.342.5341   stonepigman.com16
  • 44. Accounting Issues Brandon  A.  Lagarde,  CPA,  JD,  LLM  |  Tax  Director   8550  United  Plaza  Blvd.  |  Suite  1001  |  Baton  Rouge,  LA  70809   Phone:  (225)  922-­‐4600  |  Direct:  (225)  408-­‐4714  |  Fax:  (225)  922-­‐4611   Postlethwaite  &  Netterville,  APAC  |  www.pncpa.com    
  • 45. Accounting Issues Arman  Sadeghpour  PhD   President  &  CEO,  Theodent   www.theodent.com    
  • 46. Louisiana Economic Development  
  • 47. Louisiana Economic Development  Theodent Thanks you!
  • 48. Questions?