House Bill No. 365, introduced by Representative Deshotel, proposes an optional exemption for business inventory from ad valorem taxes in Louisiana. The bill allows parishes to elect to exempt business inventory, which includes goods held for sale and those in production, from ad valorem taxation. This exemption is contingent upon the agreement of the sheriff, school board, and parish governing authority, and must be documented in writing. The election must be made by July 1, 2028, and can be implemented immediately or phased in over a period not exceeding five years. Parishes that opt for a full exemption will receive a one-time payment from the state, while those that phase in the exemption will receive a lesser amount, with specific caps on the total payments.

Additionally, the bill allows parishes to reduce the fair market value percentage applicable to business inventory, provided that the reduction is approved by the same local authorities. The legislation stipulates that any decrease in ad valorem tax revenue resulting from these exemptions or reductions will be absorbed by the taxing authority, ensuring no additional tax liability is imposed on taxpayers due to subsequent reappraisals or millage adjustments. The provisions of this act will take effect on January 1, 2027, contingent upon the adoption of a proposed constitutional amendment.

Statutes affected:
HB365 Original:
HB365 Engrossed: