Louisiana Quality Jobs Program Overview

Louisiana’s Quality Jobs (QJ) Program promotes economic development by incentivizing eligible companies that create net new jobs in the state. The QJ program is a quasi-statutory program that requires an Advance Notification, application, and approval by Louisiana Economic Development (LED). By creating jobs earning competitive wages in the state, companies can receive cash rebates for up to 10 years in conjunction with a state sales/use tax rebate or a project facility expense rebate.

Quality jobs eligibility

1. Employers

Because the QJ program is designed to reward companies that create well-paying jobs in Louisiana, this incentive is tailored to specific industries. LED is focused on companies locating or expanding in the field of Manufacturing, as defined by North American Industry Classification System codes 113310, 211, 213111, 541360, 311-339, 511-512 and 54171; Advanced Materials; Agriculture, Forest and Food Technology; Durable Goods (Marine, Automotive, Aviation); Entertainment; Information Technology; Biotechnology, Biomedical and Medical Industries serving rural hospitals; Logistics and Transportation; Oil and Gas and Energy; Headquarters; and Petrochemical and Environmental Technology. If a company does not fall within the list of eligible industries, there may still be an opportunity to qualify by meeting one of the following:

• Have at least 50% of annual sales out-of-state and/or to in-state customers or buyers if the product or service is resold by the purchaser to an out-of-state customer or buyer or to the federal government.
• Spend 50% or more of its time performing services for its out-of-state parent company. These services include but are not limited to legal, marketing, finance, information technology, order management, distribution center operation, or overall operations support. 
• Be located in a parish that is within the lowest 25% of parishes based on per capita income.

2. Minimum payroll and benefit requirements

If a company has 50 or fewer employees in Louisiana, it must create at least five new direct jobs with an annual payroll of $225,000. If a company has more than 50 employees in the state, it must create a minimum of 15 new direct jobs with an annual payroll of at least $675,000. New direct jobs must be full-time employees, defined as at least 30 hours per week. In addition, a company must provide a basic healthcare plan with a value of at least $1.25 per hour and coverage must be effective no later than the first day of the month 90 days after the date of hire.

3. Wage requirement

The QJ cash rebate percentage is dependent on an individual’s hourly wage and not a company’s overall average hourly wage. New direct jobs can garner the following rebate percentages: 

• $18 per hour: 4%
• $21.66 per hour: 6% 

If some employees earn less than $18 per hour, a company can still qualify for QJ rebates for their higher-paid employees if they meet the total annual payroll threshold. 

As an example, if an employee earns $22 per hour and works 2,080 hours in a year, the potential cash rebate to the employer would be $2,745.60 for that year.

Sales/use tax or project facility expense rebate

An additional component of the QJ program is the ability to elect to claim a state sales/use tax rebate or project facility expense rebate. 

1. The sales/use tax rebate is available on purchases of materials used in the construction of a building, or any addition or improvement thereon, for housing any legitimate business enterprise and machinery and equipment used in that enterprise. In addition to the state rebate, a company can pursue an endorsement resolution from localities to refund their portion of sales/use tax. 
2. The project facility expense rebate is 1.5% of the amount of qualified capital expenditures. LA Rev Stat § 51:2456(B)(b)(ii) states that qualified capital expenditures “shall mean the amounts classified as capital expenditures for federal income tax purposes that are related to the project, plus exclusions from capitalization provided for in Internal Revenue Code Section 263 (a)(1)(A) through (L), minus the capitalized cost of land, capitalized leases of land, capitalized interest, capitalized costs of manufacturing machinery and equipment, to the extent the capitalized costs of manufacturing machinery and equipment are excluded from sales and use tax pursuant to R.S. 47:301(3), and the capitalized cost for the purchase of an existing building. If a business purchases an existing building and capital expenditures are used to rehabilitate the building, only the cost of the rehabilitation shall be considered qualified capital expenditures.”

A company can choose whichever refund they desire; however, often companies elect to take the project facility expense rebate because it is a much easier process to claim the benefits, even if it does not result in as much savings.

Application and compliance 

The first step to pursuing the QJ program is to submit an Advance Notification via FastLane. Louisiana’s FastLane website is an online portal for businesses to apply for and manage state economic development incentives and programs. A company must disclose how many jobs they expect to create over a 10-year period and the corresponding yearly estimated annual gross payroll; as well as the capital investment associated with the proposed project. The purpose of the Advance is to reserve benefits before a project starts, but a company is not held to meeting the numbers stated in the Advance Notification. 

After the Advance Notification is submitted and acknowledged by the LED, a Quality Jobs application must be submitted within 24 months of filing the Advance. From that point, LED reviews and approves or denies the application. If approved by LED, the application is presented to the Board of Commerce and Industry for approval. The Board will then issue a contract through LED with the company. 

Once a QJ contract has been executed, the company must submit the requested compliance, which includes, but is not limited to, Annual Certification Reports, detailed employee listings, and employee benefits information. 

Prior QJ award metrics (2020-2024) 

Since the beginning of 2020, there have been 81 approved Quality Jobs applications Under Acts 126 and 386. The following graph summarizes key metrics as they relate to these approved projects:

Most of these projects are expansion-related, with significant representation across industries such as energy and chemical manufacturing, industrial manufacturing, and logistics. The number of approved projects has steadily risen from 2020 to 2022, with a notable surge in 2023. According to the 2023 Louisiana Economic Development Annual Report, this surge is attributed to a historic level of investments across multiple sectors, resulting in more than $25 billion invested across the state and more than 16,000 new direct and indirect jobs.  

The total new payroll, jobs, and capital investments for these awards are as follows:

Conclusion 

The QJ program is a very valuable tool for companies because it not only rewards job creation but also can offset capital expenditures via sales/use tax or project facility expense rebates. If your business would like to pursue this program or would like to learn more about other incentives that exist in Louisiana, please reach out to one of Site Selection Group’s economic experts. For more detailed information on this program, you can refer to the official LED QJ program website.