By: Kristian A. Gerrets
Prepared by Advantous Consulting on September 21, 2020
One thing that the Louisiana State Legislature was able to check-off of its “to do” list during the 2020 First Extraordinary Session was to begin providing relief to one of the industries hardest hit by the spread of the coronavirus and the socioeconomic aftermath that followed in its wake: restaurants, hotels, and retail stores. The legislature granted certain businesses access to two well-known and highly utilized economic development programs through Acts 28 and 29 of the special session, which were introduced by Representatives Mark Wright and Thomas Pressly, respectively.
To say that the mandatory restrictions put into place by state and local governments as a result of the COVID-19 pandemic introduced great challenges in the operation of restaurants, hotels, and retail stores is a gross understatement. Bottom line, the hospitality industry has been desperate for a lifeline. That lifeline came from the Louisiana Legislature during its special session in the form of Acts 28 and 29 that granted restaurants, hotels, and retailers access to the state administered Enterprise Zone (“EZ”) and Quality Jobs (“QJ”) Programs, respectively. Both programs provide employer-participants tax credits and cash rebates based on qualifying hiring activity as well as certain capital expenditures.
Albeit at different points of time within the programs’ administrative processes, both acts stipulate that eligibility to participate in the programs require that the applicant have no more than 50 employees nationwide (including affiliates). Additionally, both acts set forth that a notice of intent to participate in each of the respective programs must be submitted to the state no later than December 31, 2021, and no restaurant, hotel, or retailer is allowed to participate in or derive benefits from either of the programs after June 30, 2023. Act 28 also extended the sunset date of the EZ program to July 1, 2026.
In reference to permissible QJ participants, Act 29 limits eligibility to businesses that qualify as a “COVID-19-impacted retail business.” Such businesses are defined by the act as being restaurants, hotels, or retailers that are for-profit, had a physical and active operation in Louisiana as of March 13, 2020, and subsequently ceased operations due to either a governmental health emergency proclamation or executive order, or a decrease in customer activity or an inability to staff the business as a result of the public health emergency brought about by COVID-19.
It is of historical significance to note that, until about 5 years ago, restaurants, hotels, and retailers had been eligible to participate in the EZ program, but prior to the passage of Act 29, only qualifying manufacturers and other statutorily enumerated taxpayers (e.g., software development companies and certain oil and gas field service businesses) were allowed access to the QJ program.
Access to the EZ and QJ programs may not be the “magic bullet” necessary to solve all of the COVID-19 related problems of Louisiana’s restaurants, hotels, and retailers, but providing them access to two of the state’s “bread and butter” incentive programs is a great place to start their recovery. Speaking on behalf of the Louisiana Retailers Association, Jessica Elliott commented that, “We believe this legislation was carefully crafted and will provide an opportunity for COVID-19 impacted businesses to recover more quickly as they re-open to full capacity.”
At Advantous, our team of knowledgeable practitioners have years of experience guiding companies as they navigate the rigors of both the EZ and QJ programs and are ready to assist your organization as well. Should you have any questions, please contact Jay Robichaux at jay.robichaux@advantous.com.