Louisiana’s New Aerospace Sales-Tax Rebate and an ITEP Expansion

States increasingly tailor incentives to specific industries, and Louisiana has built a new framework for aerospace. A package of aerospace incentives enacted earlier in 2026 reached a key milestone on July 1, when the centerpiece rebate took effect.

For aerospace and space-flight companies evaluating the Gulf Coast, Louisiana has assembled a package that pairs new sales-tax relief with one of the country’s oldest property-tax abatement programs.

Recent Program Activity: What Changed

Louisiana enacted its aerospace incentive package in 2026, headlined by two measures. Act 190 (House Bill 1088) authorizes a state and local sales-and-use tax rebate for approved aerospace facilities and took effect July 1, 2026, so purchases from that date may qualify, subject to certification, an agreement, and the rebate procedures. Act 102 (House Bill 1179), effective May 11, 2026, extends eligibility for Louisiana’s Industrial Tax Exemption Program (ITEP) to aerospace manufacturing establishments.

Together, the two acts combine a new aerospace sales-and-use tax rebate with eligibility for Louisiana’s existing industrial property-tax exemption framework. Louisiana Economic Development (LED) certifies the facility and executes the agreement; state-tax rebate claims are filed with the Louisiana Department of Revenue and local-tax claims with the relevant local taxing authority.

Program Overview: What’s on Offer

Under Act 190, an approved aerospace facility owner — or an approved facility contractor identified as an eligible recipient under the agreement — may receive an annually paid rebate of state and local sales and use taxes on machinery, equipment, materials, supplies, and services used directly in aerospace activities at the facility, for purchases made on or after July 1, 2026. Covered activities concern launch vehicles, spacecraft, payloads, and related equipment; general administrative and office-overhead functions are excluded. To qualify, the facility owner must provide a sworn attestation that the project will create at least 200 new direct, permanent, full-time Louisiana jobs and intends to make at least $1 billion of new Louisiana capital expenditures on or after July 1, 2026 and before July 1, 2031. Missing either the 200-job requirement or the $1 billion investment requirement by July 1, 2031 terminates the agreement, and statutory or contractual noncompliance can also trigger recapture. The initial agreement term runs 20 years, with a possible 10-year renewal.

Act 102 extends ITEP, one of the country’s oldest abatement programs. Under current LED guidance, ITEP’s base benefit is an 80% property-tax abatement for an initial term of up to five years, with a possible five-year renewal; a manufacturing expansion or addition with at least $500 million in capital expenditures may qualify for consideration as an ITEP Mega-Project at a 93% to 100% exemption rate, subject to the applicable local recommendation process and state approval, and the higher rate is not automatic. For ITEP, companies must submit the project application before beginning construction or installation of facilities, then proceed through LED, local, Board of Commerce and Industry, and Governor review.

Why It Matters

The $1 billion investment and 200-job thresholds are high enough to exclude routine industrial projects, so the rebate is oriented toward very large aerospace developments. The ITEP extension, by contrast, is available more broadly to qualifying aerospace manufacturing.

For companies in the space and aerospace supply chain, the combination is meaningful: sales-tax relief lowers the cost of building and equipping a facility, while ITEP can reduce the ongoing property-tax burden for years. Together they can materially change the economics of siting a major aerospace operation.

What Companies Should Do

Aerospace and space-flight companies evaluating a large U.S. facility should model the combined value of the Act 190 rebate and ITEP against the full project budget and the $1 billion and 200-job commitments, and confirm the certification, application-timing, and agreement steps with Louisiana Economic Development before purchasing or beginning construction. Because the rebate is paid annually and tied to statutory performance requirements, compliance planning should be built into the deal from the start.

Companies below the megaproject thresholds should weigh Louisiana’s broader ITEP and other programs, since the aerospace rebate is targeted at the largest projects.

How SSG Can Help

Site Selection Group helps companies evaluate and secure megaproject incentives like Louisiana’s as part of a competitive site-selection process. We model the combined value of rebates and abatements against total project economics, compare Louisiana against competing states, and help structure the agreements and compliance commitments these programs require.

If your company is planning a major aerospace, manufacturing, or infrastructure investment on the Gulf Coast, contact SSG to assess how Louisiana’s incentives fit and to build a strategy that strengthens the project’s business case.

Program details verified against primary sources as of September 30, 2026. Program rules, application status, and administrative guidance can change; confirm current details with the administering agency before acting. This article is provided for general information and does not constitute tax or legal advice.