Folger’s Coffee Plant near the Industrial Canal in New Orleans East. (Jo Naylor, April 2018. CC BY 2.0, via Wikimedia Commons).
The Louisiana Board of Commerce and Industry is expected to hear the appeal of tax exemption denials from Folgers Coffee Co. next week worth more than $5 million to New Orleans government, schools and law enforcement that want the revenue.
It has been more than two years since Folgers filed six different applications for Louisiana’s Industrial Tax Exemption Program (ITEP) for upgrades the company completed at its Chef Menteur Highway and Old Gentilly Road plants. The company sought lucrative ITEP breaks covering an entire decade on top of the roughly $121 million in tax exemptions it had already received from 2000 to 2017.
Local residents and advocacy groups lobbied heavily against the tax breaks until all three local taxing bodies — the New Orleans City Council, Orleans Parish Sheriff’s Office and Orleans Parish School Board — denied all six of Folgers’ applications. However, the company has filed a last-ditch appeal with the Board of Commerce and Industry, asking the board to overrule the local governing bodies.
Folgers owes Orleans Parish about $5.1 million in current and back taxes, and the company has been exhausting all its legal options before paying the bill.
The city council, sheriff and school board published a joint letter this week urging the Board of Commerce and Industry to deny Folgers’ appeal at its upcoming March 1 meeting.
“It is time to bring this lengthy saga to a conclusion,” the letter states. “We ask this Board to deny the appeal and make clear that Folgers must pay the taxes it owes when its applications were denied by our elected bodies.”
The Folgers case has become one of the most prominent examples of local governments taking control of local taxing matters after Gov. John Bel Edwards issued executive orders to change ITEP approval standards in 2016. However, many believe the clock is ticking on those reforms to expire once Edwards’ final term ends this year.
The J.M. Smucker Co., the parent company of Folgers, responded with the following statement:
“Based on the contractual details of the Cooperative Endeavor Agreement we signed when we consolidated our coffee operations to New Orleans, we are confident that our applications should be granted. We have not only fulfilled, but far exceeded our annual job and payroll obligations under the agreement. Additionally, we have followed the outlined ITEP application process and have no outstanding tax debt or previous filings under formal review.
“Along with misinformation being shared about our ITEP applications, there has also unfortunately been an inaccurate depiction of our commitment to the New Orleans community. It is very important to us that residents understand the pride we have in our home of New Orleans and that they are aware of our continued work to support this area.
“In addition to employing more than 700 local residents, as a leading area business, we are one of New Orleans top property tax payers. We pay millions in property taxes each year that fund many public services including schools and law enforcement, among others. We are also passionate about addressing the needs of residents, which has inspired us to consistently donate food, funding and employee volunteer time to local organizations.
“We are confident in our position regarding the ITEP applications and hopeful for an appropriate resolution. We look forward to continuing to be a leading employer in the area and growing the positive impact we have on this great community.”
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