Frequently Asked Questions related to the Quality Jobs Program:
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.
- 35% 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 net new direct job?
A: A net 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 net 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 net 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 net new direct jobs. Similarly, if Company A buys Company B, who has 10 Louisiana employees, then those 10 employees would not be considered net 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 net 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, in this instance the employee would meet the minimum wage requirement of $14.50/hour in wages and health care; 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).
- 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.