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 production. Parishes can elect to exempt 100% of business inventory from property 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 ad valorem 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 be made once per assessment period.

Key amendments to the bill include changes to the election deadline for parishes to exempt business inventory, moving it from July 1, 2028, to July 1, 2027, and adjusting the year for state payment calculations from 2025 to 2026. The bill also clarifies the definition of "business inventory" and ensures consistency in references to the reduction of fair market value throughout the proposed law. Additionally, it mandates that any decrease in ad valorem tax revenue due to the reduction must be absorbed by the taxing authority, preventing any additional tax liability from arising due to subsequent reappraisals or millage adjustments.

Statutes affected:
HB365 Original:
HB365 Engrossed: