The Enterprise Zone, or EZ program is a jobs incentive program that provides Louisiana income and franchise tax credits to a new or existing business located in Louisiana creating permanent net new full-time jobs, and hiring at least 50% of those net new jobs from one of four targeted groups. The benefit provides:
- A one-time $2,500 job tax credit for each net new job created.
- A 4% rebate of sales and use taxes paid on qualifying materials, machinery, furniture, and/or equipment purchased or a 1.5% refundable investment tax credit on the total capital investment, excluding tax exempted items.
This incentive program is open to any Louisiana business (new or existing) not engaged in gaming, residential development, a church, or retail business with a NAICS of either 44 or 45 and having 100 or more employees nationwide, including affiliates, except grocery stores and pharmacies, as defined by LED which are located in an Enterprise Zone, and that will:
- Create a minimum of five permanent net new full-time jobs within 24 months of their project start date or increase their current nationwide workforce by 10% within the first 12 months.
- Hire 50% of the net new jobs created from one or more of the certification requirements from these targeted groups:
- Residency: someone living in Enterprise Zone within the state.
- People receiving an approved form of public assistance.
- People lacking basic skills. A person performing below a ninth grade proficiency in reading, writing or mathematics.
- People unemployable by traditional standards.
Getting started is a click away. Submit your advance notification and pay online before you start construction, hire, and/or make purchases towards the project's capital investment.
You may submit your advance, application and fees online using FastLane. You may also download the application. If you have appointed a representative other than a company official as your contact designee, a Disclosure Authorization is required.
After the department receives your advance notification and fee, you are ready to start your project following these steps:
1. Begin your Project. This includes construction, purchase of equipment, building and materials, hiring, and other capital investment transactions.
2. Apply for Local Benefits. If you are seeking local sales tax incentives in the parish where your project is under way, contact the local governing authority to request an endorsement resolution.
3. File for a Sales/Use Tax Certificate Registration. Contact the Louisiana Department of Revenue to apply for a sales and use tax registration certificate and taxpayer account number.
4. File for an Unemployment Insurance Identification Number. Contact the Louisiana Workforce Commission to apply for an unemployment identification number.
5. Submit your Program Application. After the completion of your project, submit your application with fee no later than 90 days after your project completion date.
6. Review of Application. Once LED receives your application and fee, the office staff will review your application for compliance with the program rules, verify submitted information, and make a recommendation to the Board of Commerce and Industry. Applications are reviewed every 45 days prior to the board meeting and applicants will be notified within 14 days of the board meeting and provided with instructions and the time and location of the meeting.
7. Board Review. Your application is presented to the Board of Commerce and Industry for approval. The board convenes every other month, meeting six times a calendar year.
8. Issue Contract. After application is approved by the Board of Commerce and Industry, three original contracts will be mailed to you for your signature, unless the Louisiana Department of Revenue (LDR) issues an objection against the project and/or owners. If LDR issues an objection, you will have six months to contact LDR and resolve the objection. If objection is not resolved, the application can be canceled.
9. Submit Project Completion Report. File with LED within six months of the date the Governor signed the contract.
10. Submit Affidavit of Final Cost. File with LED within six months of the date the Governor signed the contract.
11. File for Sales and Use Tax Rebate or Refundable Investment Tax Credit. Submit rebate claim or refundable ITC request to the Louisiana Department of Revenue within six months of the date the Governor signed the contract. Contact Office of Audit Division at 225.219.2270 for additional information.
12. File Employee Certification Report. Reports should be completed and filed by May 31st after you have received an executed contract signed by the Governor.
Q: If I am an existing business with a fully staffed workforce and need to hire more employees to respond to an increased market demand for my product, how do I know if the positions I am creating and filling are net new jobs?
A: A net new job is a position created on or after the contract effective date, which is in addition to the number of jobs in the employment baseline established at the site location of the Enterprise Zone Project. For example:
- Thibodeaux Candy Manufacturers Inc. has a well-liked piece of candy. The popularity of the candy has soared so much that the company cannot keep up with the rising demand. To handle the demand, Thibodeaux Candy Manufacturers Inc. increased production on the candy assembly line and added another work shift. The changes increased their existing workforce by seven. Two employees were assigned to the regular work shift and five worked the new shift. The new positions created are considered net new jobs.
Q: Production at my company fluctuates due to our business industry. How do I know if I am creating permanent net new jobs during our various seasons of production?
A: A net new job is a job created on or after the start date of the Enterprise Zone project with no anticipated end date and falling within the period commencing 45 days prior to the contract effective date and ending five years after the contract effective date. For example:
- Thibodeaux Candy Manufacturers Inc. is starting a new line of candy. They will invest in manufacturing equipment to produce their new candy line. Each candy manufacturing line needs five employees, thus their new line will call for the creation of five new jobs. The new jobs created and filled will be considered permanent jobs since the company is expecting to make this type of candy for a long time.
- Thibodeaux Candy Manufacturers Inc. needs additional employees to fill their Valentine's Day orders. They hire 20 employees to complete their special orders. After the Valentine's Day orders are filled and shipped, Thibodeaux Candy Manufacturers Inc. will dissolve the new positions and the 20 employees hired to complete the special order will no longer have jobs. These are not permanent net new jobs because there is not a continuing need for the jobs to be filled.
Q: If Company ABC purchased Company XYZ and retained XYZ's employees, are the new jobs acquired considered net new jobs?
A: NO. When a business acquires another business, the jobs that were at the purchased business are not considered new jobs for the new business owner. They must be net new jobs to Louisiana. For example:
- Thibodeaux Candy Manufacturers Inc. has acquired Sweet Home Candies LLC, a local company with 33 existing employees. Thibodeaux Candy Manufacturers Inc. plans to make some modifications to the structure of Sweet Home Candies LLC and retain their employees. The 33 employees retained by Thibodeaux Candy Manufacturers Inc. are not net new jobs.
Q: What is the Enterprise Zone Program?
A: The Enterprise Zone, or EZ program is a jobs incentive program that provides Louisiana income and franchise tax credits to a new or existing business located in Louisiana creating permanent net new full-time jobs and hiring at least 50% of those net new jobs from one of four targeted groups.
Q: What are Enterprise Zones?
A: Enterprise Zones are economically distressed areas within the state that have high unemployment rates, low per capita income and/or a high number of residents receiving public assistance.
Q: Do I have to locate my business in an Enterprise Zone?
A: Generally, businesses participating in the program are not required to locate in an Enterprise Zone. Grocery stores or pharmacies as defined by LED with NAICS of either 44 or 45 who have 100 or more employees nationwide including affiliates must be located in an EZ to participate in the program. When a company is not located in an EZ and is using residency as a certification requirement, the employees must reside in a Louisiana Enterprise Zone or meet one of the other certification requirements.
Q: What are the four certification requirements?
A: The certification requirements are specified targeted groups from the following areas:
- Public Assistance
- Lacking Basic Skills
- Unemployable by Traditional Standards
Q: What type of business is eligible to participate?
A: Any Louisiana business (new or existing) not engaged in gaming, residential development, a church, or retail business with NAICS of either 44 or 45 and having 100 or more employees nationwide, including affiliates, except grocery stores and pharmacies, as defined by LED which are located in an Enterprise Zone.
Q: How do I apply to participate in the Enterprise Zone Program?
A: Submit an Advance Notification form and a $100 filing fee prior to beginning the project (before starting construction, purchasing, or hiring new employees). Business Incentives Services (BIS) will acknowledge receipt and send you a URL link to download your application packet, which will include program instructions, procedures, due dates and a timeline of the program steps.
Q: What is an Advance Notification form?
A: An Advance Notification form is a document notifying Louisiana Economic Development (LED) of an intended project before any construction, hiring, or capital expenditure has been made.
Q: Where can I find the Advance Notification form?
A: The Advance Notification form should be completed through Fastlane, LED's secure online filing system.
Q: What is the difference between an Application and Advance Notification?
A: An Advance Notification provides an estimate of your project's total investment and expected new jobs. An Application is submitted after your project is complete and gives actual figures of the expenditures and investments associated with your project.
Q: What is a Qualification Certification form?
A: The applicant's Qualification Certification form is a document submitted within the application that confirms the intended number of permanent net new full-time jobs the applicant will create.
Q: What benefits are available by participating in the Enterprise Zone Program?
A: Benefits include a one-time $2,500 tax credit for each net new job created during the contract period and either a rebate of State sales/use taxes paid on construction materials, machinery, equipment and furniture, or a 1.5% Refundable Investment Tax Credit on qualified expenditures.
Q: Are there any local benefits?
A: Rebate of some local sales/use taxes paid may be available, at the discretion of the local governing authorities in the parish the project is located. An Endorsement Resolution from the local governing authorities must be received prior to the Board of Commerce & Industry approval of the company's application. For more information on local rebates, please contact the local governing authority where your business is located.
Q: What is an Endorsement Resolution?
A: An Endorsement Resolution is a written motion issued by the local governing authority acknowledging a company's participation in the Enterprise Zone Program, and stating if a rebate of the local sales taxes will be issued.
Q: Who is the Board of Commerce and Industry?
A: The Board is composed of individuals appointed by the Governor of Louisiana and reviews and approves applications for Enterprise Zone, Industrial Tax Exemption, Quality Jobs and Restoration Tax Abatement incentive programs.
Q: Do I have to hire the new employees within a certain time period?
A: YES. A business must create permanent full-time net new jobs under the following conditions: must increase existing nationwide workforce by 10% (a minimum of 1 permanent net new job) within the first 12 months of the contract effective date; or create 5 jobs within the first 24 months of the contract effective date.
*** 50% of all permanent net new jobs must meet one of the four Certification Requirements. ***
Q: How do I determine the number of existing employees I have?
A: To determine the number of existing employees (baseline): Take your monthly ES4 totals for the four months prior to the EZ contract effective date. Disregard the highest and lowest months and average the remaining two months to determine your baseline.
Q: What is considered a full-time job?
A: A full-time job is a position filled by an employee hired to work for a minimum of 35 hours a week and reported on the company's ES4.
Q: Are part-time jobs eligible?
A: No, the only jobs eligible are the ones filled with employees hired to work at least 35 hours a week.
Q: Who is a qualified employee?
A: A qualified employee is a U.S. citizen living in Louisiana or relocating to Louisiana within 60 days of hire.
- Submit Advance Notification with fee either online or by mail, then begin your project.
- Apply for local benefits with local governing authority.
- File for a Sales Tax Registration Certificate with the Louisiana Department of Revenue and an Unemployment Insurance ID number with the Louisiana Workforce Commission.
- Complete the application online and submit any required addendum material to LED to review within 90 days after project completion.
- LED reviews application and submits it to the Board of Commerce and Industry.
- If approved, the Board issues contract through LED.
- Submit Project Completion Report and Affadavit of Final Cost to LED.
- File for sales and use tax rebate or refundable investment tax credit with the Louisiana Department of Revenue.
- File Employee Certification Report with LED.