Louisiana Senate Bill SB332

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12

Caption

Establishes a program to authorize the granting of ad valorem tax exemption contracts by the Board of Commerce and Industry for certain businesses.

Impact

The implementation of SB332 is expected to have significant implications for local economies and state laws surrounding taxation. By allowing parishes to opt into the program, the bill promotes localized economic development efforts while also giving state authorities the power to regulate the distribution of tax exemptions. However, businesses that primarily engage in retail sales, real estate, or other non-qualifying sectors would be sidelined unless they create a minimum number of 'headquarter jobs,' which could lead to increased employment opportunities in targeted sectors such as clean technology and digital media.

Summary

Senate Bill 332 aims to create a program for granting ad valorem tax exemption contracts for certain businesses within Louisiana. Administered by the Louisiana Department of Economic Development, the bill establishes eligibility criteria that require businesses to derive at least 50% of their total annual sales from out-of-state customers or certain qualifying local sales. The intent of the bill is to attract new businesses and support the expansion of existing ones by providing tax incentives that can encourage a competitive environment for corporate operations in the state.

Sentiment

The sentiment surrounding the bill appears largely supportive among business associations and economic development advocates who argue that it offers crucial incentives for attracting business investment in Louisiana. However, there may also be concerns about the potential for inequities as some sectors are disadvantaged, and questions about the long-term effectiveness of tax exemptions as a strategy to foster economic growth could be raised. Local government representatives may have mixed feelings depending on how the program could impact their revenue streams.

Contention

A notable point of contention reflects on whether the provision of tax exemptions truly benefits the state in the long run or merely shuffles financial resources around without yielding substantial growth. Critics may argue that while the program incentivizes business relocations and expansions, it may lead to lost tax revenue that could have funded public resources. Additionally, the discretion granted to the Secretary of Economic Development in approving contracts raises concerns over potential favoritism in the selection process.