First, it was traditional manufacturing. Next, it was data centers. Now, Louisiana is opening its doors to the aerospace industry with new tax incentives. Louisiana's executive and legislative leaders are openly and aggressively pursuing businesses in the aerospace industry.

During the ongoing 2026 Regular Session of the Louisiana Legislature, Rep. Tony Bacala sponsored House Bill Nos. 1088 (Act No. 190)and 1179 (Act No. 102), both of which provide state and local tax incentives for aerospace businesses and also sailed through the legislature without any nay votes. Governor Landry signed both bills into law on May 11, 2026.

State and Local Sales/Use Tax Rebates

Act No. 190 provides state and local sales/use tax rebates for approved aerospace facility owners and approved aerospace facility contractors on eligible purchases, leases, rentals or uses of machinery, equipment, materials, supplies or services made on or after July 1, 2026 and used directly in aerospace activities at an approved aerospace facility. Subject to various procedural steps, the rebates are to be paid annually.

The statute provides definitions of “aerospace activity,” “approved aerospace facility,” “approved aerospace facility owner,” and “approved aerospace facility contractor.”  To be certified by Louisiana Economic Development (LED) as an approved aerospace facility, the aerospace facility owner must provide sworn testimony that the project will create a minimum of 200 hundred new direct, permanent, full-time jobs in Louisiana and it intends to spend at least $1.0 billion in new capital investment in Louisiana between July 1, 2026 and July 1, 2031.

An approved aerospace facility must enter into a tax exemption agreement with LED that addresses the new law's requirements and related procedural matters, including termination provisions. Importantly, the Louisiana Department of Revenue (LDOR) is required to issue a direct payment number to an approved aerospace facility that has entered into a tax exemption agreement with LED. Utilization of a direct payment number by an approved aerospace facility should make the payment of state and local sales/use taxes and the annual rebate process more efficient.

The statute provides that requests for the rebate of both state and local sales/use taxes must be processed by the LDOR. But the statute also provides that an eligible taxpayer must request a rebate of state sales/use taxes using a form and in the manner prescribed by the LDOR. Interestingly, the same statute provides that a request for a rebate of local sales/use taxes must be made using a form and in the manner prescribed by the relevant local sales/use taxing authority, which is required to process the local rebate claim. For both state and local rebate claims, the requesting taxpayer must provide documentation supporting the purchases, leases, rental, and uses eligible for the state and local rebates. Taxpayers claiming state and local rebates must be keenly aware of and comply with the documentation requirements of both the LDOR and the relevant local taxing authorities. Failure to comply could adversely impact the rebate claims.

Louisiana Industrial Tax Exemption Program (ITEP)

The Louisiana ITEP is one of the country's oldest and most tried-and-true tax incentives. The ITEP provides potentially lucrative local property tax abatements to eligible manufacturing businesses.

Act No. 102 seeks to extend eligibility for the ITEP to certain advanced manufacturing activities associated with aerospace programs in Louisiana. The new law is effective as of May 11, 2026.

Simply, Act No. 102 provides that aerospace manufacturing and capital expenditures related to facilities and infrastructure integral to aerospace manufacturing shall be eligible for the ITEP property tax abatement. The statute provides key definitions for “aerospace manufacturing” and “aerospace manufacturing establishment.”

The Bottom Line

There is plenty of space for space in the Bayou State and tax incentives to boot. 

  

    

"We are saying Louisiana wants you, and we want to make sure that's absolutely clear in law". Rep. Tony Bacala (R-Prairieville).