Blogs

The Capital Construction Fund (“CCF”) program is a joint program of the Internal Revenue Service and the United States Maritime Administration that provides federal income tax incentives, mostly through tax deferral, to vessel owners and operators. The primary goals of the program are to ensure that there is a United States flagged fleet in case vessels are needed in time of war and to ensure we have domestic vessel production capacity for such purpose. Secondarily, the program creates jobs for vessel operators and domestic shipyards and assists in modernizing the United States merchant marine fleet.

On June 11, 2025, Louisiana House Bill 404 (now Act 498), amended LA RS 47:31 to add the following new Section:

(6) For state income tax purposes, capital construction funds, created in accordance with 46 U.S.C. App. 1177 and 26 U.S.C. 7518, and all related items of income, gain, deduction, loss, credit, adjustment, and basis shall be taxed in the same manner as those items are taxed pursuant to 26 U.S.C. 7518 and applicable federal regulations.

This addition confirms the widely held belief that there should be no difference between the Louisiana and federal treatment of this long-standing federal tax incentive program. It is consistent with the Nation’s goal of revitalizing the US Shipbuilding industry. It also clarifies some potential confusion created by the Louisiana Board of Tax Appeals in 2023, in the case of Foret v. Louisiana Department of Revenue, Docket Number 13233C.

Vessel operators in Louisiana should ensure their tax preparers are aware of this legislation, and those who do not currently maintain a Capital Construction Fund are strongly encouraged to consider establishing one to take full advantage of the potential benefits.

For further questions regarding this new legislation, contact Liskow attorney Leon Rittenberg and visit our Maritime Transactions practice page.

Liskow attorneys Cheryl Kornick, Bob Angelico, and Tyler Trew achieved a victory for the University of New Orleans Research and Technology Foundation (“UNORTF”) in a significant legal battle concerning property tax exemptions. The case was tried before the Louisiana Board of Tax Appeals, which found after a trial on the merits that the UNORTF was entitled to an exemption from 2022 and 2023 Orleans Parish ad valorem taxes for four buildings located in the UNO Research and Technology Park. The Board found that the subject property qualified for an exemption because it was being used for the public purpose of operating a research and technology park in support of the University of New Orleans pursuant to Louisiana Constitution Article VII, Section 21(A).

On appeal the Louisiana Fourth Circuit Court of Appeal affirmed the Board’s ruling explaining the legislature provided non-profit corporations, like UNORTF, with special powers necessary to accomplish its public purpose. The Fourth Circuit found UNORTF used these powers to accomplish its public purpose, and it thus engaged in a “public use” for purposes of Section 21(A). The Fourth Circuit held the legislature gave UNORTF and UNO the discretion to select tenants that UNO believed support the public purpose underlying the research and technology park. The legislature also gave UNORTF and UNO the discretion to forge connections between tenants and UNO in a way that best accomplished the public purpose of the research and technology park. The court emphasized that the activities of the taxpayer, rather than those of its tenants, were the determining factor in assessing whether the property served a legislatively recognized public purpose.

Following the Fourth Circuit’s decision, the Orleans Parish Assessor sought review by the Louisiana Supreme Court, and the Supreme Court denied writs. This denial marked the end of the legal journey for the UNORTF, solidifying their victory and confirming the tax-exempt status of their properties. This case sets a significant precedent for similar institutions seeking property tax exemptions in Louisiana and provides a clear legal framework for such entities.

A copy of the Fourth Circuit’s final ruling can be found here.

For further questions regarding this case, contact Liskow attorneys Cheryl Kornick, Bob Angelico, and Tyler Trew. Click here to read about Liskow’s Tax litigation experience.

Despite voters rejecting several tax-related constitutional amendments in a March referendum, the Louisiana Legislature has approved two new amendments to appear on the ballot next April. The two amendments would afford the Legislature more flexibility in developing budgets and making tax changes. Governor Landry has expressed his support for the amendments.

Included in the two amendments are measures to prohibit the Legislature from mandating that a parish exempt business inventory from ad valorem taxes. The amendment would also set the assessed valuation percentages for business inventory and public service property owned by railroads at fifteen percent (15%), but would authorize parishes to exempt, in part or in full, business inventory by reducing the percentage of fair market value applicable to business inventory if certain local officials all agree. Finally, the amendment would authorize a one-time payment from the Revenue Stabilization Fund to each parish that elects to irrevocably exempt all business inventory from ad valorem taxes. The goal of the amendment is to make doing business in the state more attractive.

The second amendment would allow the Legislature to consolidate certain trust funds related to education and place the funding within the Teachers’ Retirement Fund. This would include The Education Excellence Fund, The Louisiana Education Quality Trust Fund, and The Louisiana Quality Education Support Fund. The goal of this amendment is to improve efficiency in managing the various education trust funds.

The savings would be used by each public school system that participates in the Teachers’ Retirement System to provide a permanent salary increase, plus any related benefits, of two thousand two hundred fifty dollars ($2,250.00) for certificated personnel and one thousand one hundred twenty-five dollars ($1,125.00) for noncertificated personnel.

Proponents hope that a simplified version of the changes will fare better with voters after acknowledging that the March 2025 referendum may have been too complex. Voters will have an opportunity to vote on the proposed amendments on April 18, 2026.

For further updates regarding this topic, contact Liskow attorneys Bob Angelico,  Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, Jr. and visit our Tax practice page.