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 to become part of goods. It allows parishes to exempt 100% of business inventory from property taxes, provided that the exemption is approved by the sheriff, school board, and parish governing authority. Parishes that opt for this exemption before July 1, 2027, will receive a one-time payment from the Revenue Stabilization Trust Fund, with specific payment amounts based on the ad valorem taxes collected in the previous year. The bill also establishes that any election to reduce the fair market value percentage of business inventory is irrevocable and can only occur once per assessment period.

Additionally, the bill amends existing legal language to clarify the definition of "business inventory" and modifies the election deadline for parishes to opt for the exemption. It changes the effective date for the exemption to property tax years beginning on or after January 1, 2026, and ensures that any decrease in ad valorem tax revenue due to the exemption is absorbed by the taxing authority without creating additional tax liabilities. The bill also includes technical changes to ensure consistency in references to the fair market value percentage reduction throughout the proposed law.

Statutes affected:
HB365 Original:
HB365 Engrossed: