|
Thursday, August 13, 2009
Time is Running Out on the Louisiana Brownfields Tax Credits
 The 2009 Louisiana Legislature
narrowly failed to extend the life of the Louisiana Brownfields Investor Tax
Credit program beyond the current expiration date of December 31, 2009.
The term “brownfield” generally
refers to real property the redevelopment of which is hindered or complicated
by the presence or potential presence of hazardous substances or contamination. In 2005, the Louisiana Legislature passed the Brownfields
Investor Tax Credit Statute to encourage the cleanup of brownfield sites. See
La.
R.S. 47:6021. Since an amendment in 2007, the statute provides a tax
credit of 15% of voluntary remedial investigation costs and 50% of voluntary
remedial action costs. Voluntary
remedial investigations determine the nature and extent of contamination and
the appropriate remedy. Voluntary
remedial actions are risk-based cleanups approved by the Louisiana Department
of Environmental Quality (LDEQ).
To be eligible for the Brownfields
Investor Tax Credits, the investor cannot be a “responsible person” under the
statute. “Responsible persons” include
anyone who generated, stored, treated, or disposed of hazardous waste,
knowingly permitted another to dispose of hazardous waste, or knew or should
have known of the presence of hazardous substances at the time of acquiring the
property. Similarly, individuals who are
owned, affiliated with, or controlled by a responsible person are ineligible
for the tax credits.
To obtain the tax credit, you must
first submit either a voluntary remedial investigation application or a
voluntary remedial action application to the LDEQ which includes a statement of
the projected economic benefit to the community in which the project is
located. Once LDEQ approves the
application and you complete the investigation or action, LDEQ then issues a
certificate of completion which allows you to claim the credit.
The credit is applied against the
income tax for the taxable period in which it is earned. Unused credit may, however, be carried
forward as a credit against subsequent tax liability for up to 10 years. Additionally, the credit can be sold or
transferred to another Louisiana
taxpayer.
The statute currently
provides that no tax credits shall be granted or allowed after December 31,
2009. A bill to extend this deadline was
proposed in the most recent legislative session. While the bill passed 99-0 in the House of
Representatives, it was not acted on by the Senate. Thus, if you have not yet submitted an
application to LDEQ for approval, time is running out. To qualify for the tax credit, the remedial
investigation or action must be completed and LDEQ must approve the work and
issue a certificate of completion by December 31, 2009.
For more information please
contact Robert Holden (reholden@liskow.com),
Greg Johnson (gljohnson@liskow.com), or Stephen Wiegand (swwigand@liskow.com)
in our New Orleans
office.
|
