Running a small business in St. Mary Parish means constantly juggling multiple priorities.
Between managing daily operations, employees, customers, and financial matters, it’s easy to miss out on valuable tax credits and incentive programs designed specifically to help businesses like yours.
A lot of small business owners in Franklin, Baldwin, Berwick, Morgan City, and across St. Mary Parish don’t realize how many financial benefits are available to them.
Let’s break down some key programs that could potentially save your business thousands of dollars.
Understanding Tax Credits vs. Tax Deductions
Before diving into specific programs, it’s important to understand the difference between tax credits and deductions.
A tax credit gives you a dollar-for-dollar reduction in your tax liability. For example, a $1,000 tax credit directly reduces your tax bill by $1,000.
A tax deduction lowers the amount of your business income that’s subject to tax, which could even move you into a lower tax bracket.
While deductions reduce taxable income, tax credits directly reduce the amount of tax you owe. Your business can claim both simultaneously, as long as you qualify for them.
Some of the Available Tax Credits and Incentive Programs for St. Mary Businesses
Research and Development Tax Credit
If your business conducts research activities in Louisiana, you might qualify for this valuable credit. This program offers up to 30% tax credit on qualified research expenditures incurred in the state.
The R&D tax credit aims to encourage businesses with operating facilities in Louisiana to establish or continue research activities within state boundaries.
To qualify, you have to claim the expenses within one year after December 31 of the year in which the expense occurred.
However, not all businesses qualify. Professional services firms and custom manufacturing/fabricating businesses are ineligible unless they have a pending or issued U.S. patent related to the research they’re claiming.
For more information: https://www.opportunitylouisiana.gov/incentive/research-and-development-tax-credit.
Angel Investor Tax Credit
This tax credit provides a 25% tax credit on investments made by accredited investors in businesses certified as Louisiana Entrepreneurial Businesses (LEB).
The credit jumps to 35% if the LEB is in a qualified Opportunity Zone. You can check if your business is in such a zone here: https://led.maps.arcgis.com/apps/View/index.html?appid=117d9113148c47f3945ce9bef6342625.
To qualify, your business can’t be in retail, real estate, professional services, gaming or gambling, natural resource extraction, or financial services.
Additionally, investment funds must be used for specific purposes, such as capital improvements, equipment, R&D, or working capital.
For more information: https://www.opportunitylouisiana.gov/incentive/angel-investor-tax-credit.
Restoration Tax Abatement
This program offers up to ten years of property tax abatement on renovations and improvements to existing commercial structures in qualifying locations.
It’s available to Louisiana businesses looking to expand, restore, or improve existing structures in economic development districts, downtown areas, historic districts, or opportunity zones—as approved by local authorities.
Eligible expenses include building materials, machinery and equipment that becomes part of the structure, and labor and engineering costs. One important note: this exemption doesn’t apply if property taxes have already been paid on the improvements.
Learn more here: https://www.opportunitylouisiana.gov/incentive/restoration-tax-abatement
Entertainment Job Creation Program
For businesses in the entertainment industry, this program provides a tax credit of up to 20% on annual wages paid to Louisiana residents.
To qualify, your business needs to be involved in developing or distributing audio, visual, or both types of entertainment content for the public.
You must also be authorized to do business in Louisiana. Only wages listed in Box 1 of W-2 forms count toward this credit.
Additional details: https://www.louisianaentertainment.gov/film/entertainment-job-creation-program
Digital Interactive Media and Software Program
This program offers a generous 25% tax credit on qualified payroll for in-state labor and 18% on qualified production expenditures—with no cap and no minimum requirement.
You can apply these credits to your state income tax liability, and the state will refund any excess. Alternatively, you can opt for 85% of the value earned as a rebate at any time during the year.
This program is open to companies producing digital interactive media products and platforms in Louisiana, though static websites and internal-use software are excluded.
Only work physically done in Louisiana and equipment bought through Louisiana vendors qualifies.
Find out more: https://www.louisianaentertainment.gov/interactive/digital-interactive-media-and-software-program.
Navigating the Complexity
While these tax credits and incentive programs offer significant benefits, determining which ones apply to your specific situation can be challenging.
The eligibility requirements, application processes, and documentation needs vary widely between programs.
Small business owners already have enough on their plates without having to become tax credit experts. Let us help you navigate these opportunities so you can focus on what you do best: running your business and serving your customers.
If you’re interested in learning more about these programs or need help determining which ones you qualify for, reach out to our office.
We’re here to support the growth and success of all businesses in Franklin, Baldwin, Berwick, Morgan City, and throughout St. Mary Parish.