The bill, HB 365, introduces an optional ad valorem tax exemption for business inventory, which is defined as tangible personal property held for sale, in production for sale, or that will become part of goods produced. Parishes can elect to exempt 100% of business inventory from ad valorem taxes, either immediately or over a period not exceeding five years, and will receive a one-time payment from the Revenue Stabilization Trust Fund based on the amount of taxes collected on business inventory. The bill also allows parishes to reduce the percentage of fair market value applicable to business inventory, but this election is irrevocable and can only occur once per assessment period.

Key amendments to the bill include changing the election deadline for parishes to exempt business inventory from July 1, 2028, to July 1, 2027, and adjusting the year for calculating state payments from 2025 to 2026. The bill also clarifies that any reduction in the fair market value percentage of business inventory must be reported to the Louisiana Tax Commission and that any decrease in ad valorem tax revenue due to this reduction will be absorbed by the taxing authority without creating additional tax liabilities.

Statutes affected:
HB365 Original:
HB365 Engrossed: