La. R.S. 47:1703.2 — Exemption; optional exemption for business inventory

NOTE: §1703.2 eff. upon ratification of the const. amend. proposed by Acts 2025, No. 221.
A. There shall be an optional ad valorem tax exemption on items constituting
business inventory, as defined in R.S. 47:1703.3. The exemption election shall be evidenced
in writing and shall indicate if the parish will exempt one hundred percent of business
inventory immediately, exempt one hundred percent of business inventory over a period of
time, or if business inventory will be partially exempt by reducing the percentage of fair
market value applicable to the property.
B. The exemption provided for in this Section shall apply only in parishes in which
the sheriff, school board, and the parish governing authority elect to exempt business
inventory from ad valorem taxation.
C.(1) A parish electing, prior to July 1, 2027, to exempt one hundred percent of
property constituting business inventory either immediately or over a period not to exceed
five years shall receive a one-time payment from the Revenue Stabilization Trust Fund. An
exemption made pursuant to this Paragraph shall be applicable to taxable periods beginning
on and after January 1, 2027.
(2) Any parish that elects to exempt one hundred percent of business inventory from
ad valorem tax and implements the exemption immediately shall receive a payment equal to
the greater of thrice the amount of ad valorem taxes collected on business inventory within
the parish for the 2026 tax year or one million dollars. However, the maximum amount a
parish may receive pursuant to the provisions of this Paragraph shall not exceed fifteen
million dollars.
(3) Any parish that elects to phase-in an exemption of one hundred percent of
business inventory from ad valorem tax over a period not to exceed five years shall receive
a payment equal to the greater of the amount of ad valorem taxes collected on business
inventory within the parish for the 2026 tax year or five hundred thousand dollars. However,
the maximum amount a parish may receive pursuant to the provisions of this Paragraph
shall not exceed ten million dollars.
(4) Any parish electing to exempt business inventory from ad valorem tax on or after
July 1, 2027, shall not be eligible for any payment pursuant to this Subsection. Any parish
electing to partially exempt business inventory by reducing the percentage of fair market
value applicable to property considered business inventory shall not be eligible for any
payment pursuant to this Subsection.
D. The tax collector of each parish receiving a payment pursuant to Subsection C of
this Section shall distribute the monies received from the treasurer on a pro rata basis to
each taxing authority that levies an ad valorem tax within the parish. The treasurer shall
disburse monies to the collector within thirty days of receipt of a certification from the
secretary of the Department of Revenue that the parish has irrevocably elected to exempt one
hundred percent of business inventory from ad valorem tax.
E. Property for which an exemption authorized in this Section has been claimed shall
not be treated as taxable property for purposes of any subsequent reappraisals and valuation
for millage adjustment purposes pursuant to Article VII, Section 23 of the Constitution of
Louisiana. Any decrease in the total amount of ad valorem tax collected by a taxing
authority as a result of an ad valorem exemption authorized in this Subsection shall be
absorbed by the taxing authority and shall not create any additional tax liability for
taxpayers in the taxing district as a result of any subsequent reappraisal and valuation or
millage adjustment. Implementation of an exemption authorized in this Subsection shall
neither trigger nor be cause for a reappraisal of property or an adjustment of millages
pursuant to Article VII, Section 23 of the Constitution of Louisiana.