POSTED: Wednesday, June 26, 2013 - 3:00pm
UPDATED: Wednesday, June 26, 2013 - 3:04pm
GALLIANO, LA — Governor Bobby Jindal signed legislation that supports Louisiana’s ports by expanding a tax cargo credit for certain port projects.
SB 122 — authored by Senator Norby Chabert— modifies the Investor Tax Credit (ITC) and the Import-Export Tax Credit (IETC) by expanding the types of projects that qualify for exemptions. Projects that will qualify for the credit include warehousing and storage, port operations, marine cargo handling, ship building and repairs and oil and gas activities.
The credits will benefit Louisiana companies that import or export goods through Louisiana ports, making them more competitive in the global marketplace. The credit modifications will help bring new cargo into Louisiana ports, attracting additional shipping lines and services into Louisiana's competitive market from other states.
Governor Jindal said, “Today is a great day for Louisiana’s ports. Here in our state, we know that ports equal jobs, and the legislation we’re signing into law today will go a long way toward strengthening ports across our state and creating opportunities for our people. That’s why we’ve invested approximately $123 million in Louisiana’s ports through DOTD’s port priority program since 2008. But we aren’t stopping there. If we’re going to remain competitive and keep creating jobs for our people, we need to redirect Louisiana cargo through Louisiana ports, creating a new critical mass of cargo that attracts new shipping services, distribution and warehousing services and infrastructure investment. This legislation will do just that – attract new companies who want to ship goods and services through our waterways, ultimately moving our economy forward.”
Specifically, SB 122 makes the following important changes to the tax credits:
• Adds “ship building and repair” and “support activities for oil and gas operations” to the definition of “port or port and harbor activity.”
• Authorizes LED to grant a credit when it determines that such project will have a “significant positive economic impact” such as positive tax revenue, after taking into account direct, indirect and induced impacts of the project.
• Provides LED the flexibility to award the IETC to international businesses based on pre-contract tonnage.
• Removes the transferability of the IETC.
• States that no tax credit may be granted for a project that exceeds $2.5 million per tax year, and the total amount of tax credits granted is capped at $6.25 million per fiscal year.
• Prohibits the credits from being applied against tax liability before July 1, 2014.
• Places a sunset date on the credit of January 1, 2020.