The Louisiana Tax Commission seems poised to clarify the rules for when parish assessors can take large commercial properties off of local tax rolls, potentially saving taxpayers in the New Orleans area alone millions of dollars.
The commission met earlier this month to review rule changes proposed by Together Louisiana, a nonprofit that opposes corporate tax exemptions. Under the state’s Industrial Ad Valorem Tax Exemption Program (ITEP), a manufacturer that commits to maintaining a certain payroll level can gain an 80% property tax exemption, provided that local leaders and the governor sign off on the exemption, according to Louisiana Economic Development.
Together Louisiana expressed concerns that some assessors have been designating company properties as exempt from taxation even though the properties had yet to gain the needed approvals under the ITEP program.
“It’s literally costing taxpayers millions and millions of dollars, and that’s just in New Orleans,” Erin Hansen, a Together Louisiana staff member, told the Louisiana Record.
At the Aug. 17 commission meeting, both the Louisiana Assessors’ Association and Together Louisiana agreed to a compromise plan on property listings. The plan allowed properties that have advanced through the exemption application process but lack the governor’s signature to be taken off local tax rolls between Jan. 1 and the point at which parishes open their annual property tax rolls – usually in August or September.
Such properties need to go back on the tax rolls if they have not gained the governor’s approval by the day when the parish opens its tax rolls.
“There's this general question about whether there really is a problem with how the assessors are listing and valuing properties and handling exempt property,” Hansen said. “Our position is very clear that there is a problem with lack of clarity in the tax commission’s rules about how assessors are supposed to handle property that is exempted under the Industrial Tax Exemption Program, either partially or fully.”
The tax exemption issue became the topic of a lawsuit filed in Orleans Parish earlier this year, when Folgers Coffee sued the parish assessor after the City Council rejected the company’s application for an ITEP tax exemption. The assessor then required Folgers to pay back property taxes to the tune of $8 million that were put on hold while state and local officials reviewed the tax break.
The tax commission, which is chaired by Lawrence Chehardy, is scheduled to formally consider the rule changes on Sept. 21.