Louisiana bills giving tax breaks to aerospace companies like SpaceX get smooth sailing

A plan by Louisiana officials to give big tax breaks to attract aerospace companies to the state appears to be on a fast track after lawmakers on Tuesday swiftly advanced two bills without opposition.

The two measures advanced out of the House tax committee first thing Tuesday morning, as legislators reconvened in Baton Rouge after an Easter break. While officials remained mum on whether any specific companies are in talks to locate here, they said the tax breaks would generally make Louisiana competitive for such projects.

Asked whether he was trying to bring SpaceX or Blue Origin to Louisiana, Gov. Jeff Landry in a brief interview Tuesday afternoon said he would "love the opportunity to visit with either one of them to bring great jobs to Louisiana."

Landry said that the recent Artemis II launch, which sent astronauts past the moon, shows that NASA's program is "robust," as are the programs of SpaceX and Blue Origin.

"It seems like the space industry, the aerospace industry is doing extremely well, and we want to be positioned," the governor said. "We want to align Louisiana so that if they do come, we do get a great opportunity."

Landry's chief of staff, Julie Emerson, told legislators in a committee hearing the changes were necessary to stay in contention with other states for the projects.

"Louisiana is trying to remain competitive with neighboring states and provide a welcoming environment to a new industry that is increasingly growing," Emerson said. "And we would like for it to grow its footprint here in Louisiana."

Emerson in February gave up her spot as a state representative to become Landry's chief of staff. She had been chair of the House tax committee and in 2024 was instrumental in helping Landry pass a major tax reform package that slashed taxes for businesses.

State Rep. Tony Bacala, R-Prairieville, the current committee chair who sponsored the aerospace tax break legislation, said Louisiana has been welcoming to oil and gas and petrochemical businesses and to Meta's mammoth new data center -- and now it's time to extend that welcome to the aerospace industry.

"We're just making sure that the signals are sent to the right people," Bacala said.

He noted that some companies want to move to a more business-friendly environment, and "we want to be on that list."

Asked whether the legislation was meant to attract a particular business, Bacala said the measures are meant to attract a broad "category of business."

Louisiana Economic Development Secretary Susan Bourgeois echoed that message.

"Louisiana has a long history in aerospace and defense, and we just want to position ourselves to be able to capitalize on future opportunities," she said.

Bourgeois said Louisiana is "mimicking" aerospace policies that already exist in Florida and Texas to compete with those states.

"We want to attract any company that is making major investments in aerospace and defense," Bourgeois said in an interview Tuesday.

State officials have declined to give details about any specific negotiations, and some have signed non-disclosure agreements that forbid them from doing so.

"Have I historically signed NDAs that involve the space industry? Yes. " Bourgeois said. "I've also historically signed NDAs that relate to every single industry operating in Louisiana."

"It's not a standout," she said of aerospace project talks.

What would the tax breaks do?

House Bill 1088 would create state and local sales tax breaks for aerospace facilities that commit to large economic investments.

Aerospace Companies would have to commit to spend $1 billion in new capital investment by July 2031 and create 200 new, permanent full-time jobs to get state approval for a rebate of state and local sales tax paid on a yearly basis. The state could end the arrangement if companies can't meet these two benchmarks.

The sales tax rebate would be for equipment and services used directly in aerospace activities and for purchases beginning as early as July. Eligible activity could deal with research, testing, manufacturing and space mission operations.

Approved deals would last for an initial term of 20 years, with an option to extend them for an additional 10 years.

House Bill 1179 would expand eligibility for a property tax break program for investments in manufacturing facilities so that aerospace manufacturing and capital investments in aerospace manufacturing would be explicitly eligible for the program.

That program, the Industrial Tax Exemption Program, or ITEP, reduces qualifying businesses' property taxes by 80% for an initial term of 5 years, with an option to extend it for an additional 5 years.

And some "mega-projects" with capital expenditures of at least $500 million could be exempt from paying 100% of their property taxes under the ITEP program.

Bourgeois said that state's return from these tax break programs is "far greater than the incentive itself to the company."

The programs ultimately help develop new business sectors, create competitive jobs, grow wages, improve peoples' quality of life, and keep people in Louisiana, Bourgeois said.