Starting a Business in Louisiana
Louisiana has gone through several dynamic changes that have made it a great place in the country to run a business. Over the last decade factors such as statewide tax reform, an overhaul of government ethics standards, and a commitment from local communities supporting businesses across the state have led to expansion and growth. Some of the largest industries in Louisiana are in Agriculture, Manufacturing, Natural gas, Oil, Chemicals, and Fisheries. Louisiana companies can benefit from a wide array of incentive programs. The most common incentives are given through tax credits, exemptions, grant/loan programs, and to companies who reside inside a Louisiana Enterprise Zone. It is not hard to get sidetracked after starting a business in Louisiana. Getting a business license if you are in specific industries, issuing resale certificates, and looking for an EIN number can be very time consuming.
STEPS TO STARTING A BUSINESS IN LOUISIANAThe Louisiana Department of Revenue facilitates the collection of taxes and sets up procedures for filing sales tax returns. The Louisiana Secretary of State governs formation policies for new and existing businesses. After you are done doing a Louisiana corporation search and you have a finished setting up a company with the Louisiana Secretary of State, you can move on to taking care of other administrative tasks required to run your business. This will include registering online for a Louisiana Sales Tax Certificate. In order to satisfy your various compliance issues and allow your company to legally operate, you will also need to go and find the Business Licenses that are required for your company. After your legal and administrative issues have been taken care of, you can focus on seeking out the best programs offered in Louisiana. Here are some of the main programs:
- A major incentive program that Louisiana offers is the Small Business Loan and Guaranty Program. The program is operated by the Louisiana Economic Development Corporation. The goal of the program is to provide financial support to small businesses in Louisiana in an effort to foster growth and expansion. Loan amounts are provided between $5000 and $1.5 million.
- One of the strongest opportunity tax credits available in Louisiana is the Digital Media and Software Incentive Tax Credit. This incentive credit provides a refundable tax credit of 25% of labor and 18% of production expenditures respectively. The tax credit can be taken against state income tax liability or in the form of a rebate.
- Some other entertainment tax credit programs are the Musical and Theatrical Production Tax Credit and the Motion Picture Investor Tax Credit. The Musical Tax Credit offers a 25% credit towards eligible payroll and production expenditures. For production expenditures over $1,000,000 a credit of 18% is offered and for payroll expenditures an additional 7%. The Motion Picture Tax Credit offers a 40% tax credit on eligible production expenditures incurred within the state. The credits can be taken against a Louisiana personal or corporate income tax liability.
- The Louisiana Enterprise Zone Program provides various benefits to incentivize businesses to relocate to economically underdeveloped areas. Tax credits will be given to businesses that can create new permanent jobs to specific targeted groups. The main benefits under the program include a tax credit for each newly created job and a Sales and Use Tax Rebate taken against purchases of materials, equipment, and machinery. Another option is a refundable tax credit on the total capital investment.
- A similar program to the Enterprise Zone initiative is the Competitive Projects Payroll Incentive. The program includes a rebate of Sales and Use Tax on capital expenditures or a facility expense rebate. It also offers a 15% payroll rebate to companies in specific sectors for newly created jobs.
- Another employment initiative is the Quality Jobs Program which was created to stimulate job growth by offering tax rebates and credits. The program includes a rebate of Sales and Use Tax on capital expenditures or a tax credit as a percentage of qualifying expenses. It also offers a 6% payroll rebate to companies in specific sectors for newly created jobs. Businesses with less than 50 employees must create at least 5 new jobs and businesses with more than 50 employees must create at least 15 new jobs.