Proposed rules would force Louisiana assessors’ hands on pending tax breaks

The Louisiana Tax Commission met Wednesday to consider new rules for how tax assessors should treat large commercial properties with pending tax exemptions. The dilemma has prevented local governments from collecting millions in tax revenue.

Together Louisiana, a grassroots group that opposes corporate tax exemptions, submitted proposed rules that would require all industrial manufacturing property to be listed on parish tax rolls with a value assigned and the amount of any exemption if the property is under a tax exemption contract.

According to its written proposal, Together Louisiana found instances of assessors failing to list exempt property on their tax rolls and treating properties as exempt before their exemptions were finalized. 

Broderick Bagert, lead organizer for Together Louisiana, referred to the widely publicized Folgers Coffee Co. tax exemption fiasco. Orleans Parish Assessor Erroll Williams had included tax exemptions in his valuation of Folgers’ property since 2019, although the New Orleans City Council, Orleans Parish School Board and other taxing bodies ultimately rejected the tax breaks. 

Folgers had submitted advanced-notice applications for exemptions under the state’s Industrial Tax Exemption Program (ITEP), but they hadn’t received final approval. The assessor is now locked in a legal battle with Folgers.

Wendy Aguillard with the Louisiana Assessors’ Association said a common problem for assessors occurs when a company submits an advance-notice application and has everything approved but is waiting on the governor’s signature. Aguillard said some applications wait months for the governor’s signature, and assessors are hesitant to set a taxable value on a property if there’s a chance it will have to be changed.

“It may sit on the governor’s desk for seven months before he signs it,” Aguillard said. “That’s just the tricky part. Assessors are wanting to make sure that millages and their tax roll are not affected by having something on the tax roll, let’s say, that’s a billion dollars, and now we have to remove that. It gets really tricky.”

Tax Commission chairman Lawrence Chehardy, a former Jefferson Parish assessor, pointed out that Louisiana’s Constitution requires parish assessors to list all taxable property at its fair market value unless it’s specifically exempted.  

“If the governor’s signature came through and the tax bill is ready to go out, then you can always do a change order to fix it, so that’s not really an issue,” Chehardy told Aguillard. “My concern is, and I guess maybe I’m just a stickler, but the contract isn’t valid until all parties have acted on it.”

Aside from properties that still qualify for a 100% exemption under ITEP’s legacy rules, many properties will still have some assessed value because current ITEP exemptions are capped at 80%, Bagert said.

Aguillard and Bagert settled on a compromise that would require assessors to value and list a property as taxable if its exemption is still pending on the day a parish opens its tax rolls, also known as the day of open book. Most parishes open their annual property tax rolls in mid-August or September and file final valuations with the Tax Commission by Nov. 15. 

The Tax Commission will consider adopting the proposed rule changes at its next meeting, tentatively scheduled for Sept. 22.