Financial Tools

In our last several updates, we highlighted the growing pressure on state and local governments as taxpayers increasingly question rising property tax burdens driven by elevated valuations, expanding local budgets, and persistent inflationary costs.

We also noted that taxpayers have a direct opportunity to influence their assessments through the open roll review and appeal process. With those values now largely finalized for the year, attention has shifted to the other major component of the property tax equation: the millage (tax) rate.

As local taxing bodies complete their budgeting cycle, they must determine what millage rate is necessary to fund operations given the finalized tax base. While factors such as community growth, infrastructure demands, public safety needs, and long-term obligations all influence budget requirements, determining what constitutes a reasonable millage adjustment is often subjective and, too often, insufficiently examined or explained.

With the enactment of Louisiana Revised Statute 47:305.73, the state has taken significant steps to incentivize the development of data centers. The statute provides a state and local sales and use tax exemption for eligible data center equipment, software, and certain construction and development costs.

However, while the exemption provides substantial opportunity, there are still questions regarding the practical application of the statute.

Under R.S. 47:305.73, an “approved data center facility” is defined as a facility located in Louisiana that is certified by Louisiana Economic Development (LED). To qualify, the operator must attest that the project will create a minimum of 50 new direct, permanent jobs and expend at least $200 million in new capital investment in Louisiana between July 1, 2024, and July 1, 2029.