In the recent CityBusiness article “Revenue Neutrality Keeps Shipping Tax Credit on Shelf,” Ben Meyers examines the reasons behind the State of Louisiana’s refusal to implement a $5 per-ton tax credit passed into law two years ago. The Ports Tax Credit Program provides for export‐import cargo credit of $5 per ton for cargo emanating from or destined to a Louisiana manufacturer, warehouse, distributor, or other value-added enterprise that is destined to or emanates from an international destination. Cargo must pass through a Louisiana public port to qualify for the credit.
The State’s argument for declining to put the credit into effect is that the law requires that the credit be revenue neutral in that it must generate as much as it surrenders. But, there is clear disagreement between Louisiana Economic Development and port officials as to what constitutes revenue neutrality. LED Secretary Stephen Moret takes the position that cargo volumes in Louisiana ports would have to triple in 18 months for the credit to be revenue neutral, and port officials must be able to show that that can happen before the credit can be implemented. Industry leaders argue that current cargo levels already all but cover the cost of the credit, and that LED’s analysis fails to take into account the “catalytic effect” that implementation of the credit would have by attracting new shipping lines to the region.
While each side continues to cite their own revenue figures to support their respective positions, there appears to be no end in sight to this battle of statistics. In the meantime, ports that are significant engines of economic development in the state are left without a promised incentive program designed and enacted to help them attract new international shipping lines and develop new business.