USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler, B. Trevor Wilson and Parker Hufft, Jones Walker LLP
properly filed in a timely manner as set forth in the Act, then the filing of the notice of termination or sub - stantial completion commences a 30-day lien period in which claimants under the Act have the right to file a statement of claim or privilege. Upon the expiration of the period, the clerk of the court will issue a lien and privileges certificate and, if clear, the owner and contractor will file a notice of cancellation of the notice of contract. During this process, a certificate of occupancy is issued by a local government agency following an inspection of the building to certify its compliance with current zoning and building laws, including that all utility services are established and operating, and that all equipment has been installed and connected. In addition, the Louisiana state fire marshal will inspect the building and determine that it satisfies the National Fire Code and the Americans With Disabilities Act, and complies with the American National Standards Insti - tute standards, the Underwriters Laboratories (UL) fire resistance standards, the Energy Code and the Office of State fire marshal manual. There is no VAT in the USA, and there are no trans - fer taxes on real estate at the federal level other than those imposed by FIRPTA (see 2.11 Legal Restric- tions on Foreign Investors ). Some state and local government units may levy transfer taxes on transfers of real estate, but there are no such transfer taxes in Louisiana. While Louisiana does not impose transfer taxes on real estate transactions, sales tax may apply to certain movable property included in real estate transactions. 8.2 Mitigation of Tax Liability There are no federal or Louisiana transfer taxes on real estate transfers. In some states, ownership of real estate assets in a legal entity and transfer of owner - ship of the legal entity may mitigate any applicable transfer taxes. 8. Tax 8.1 VAT and Sales Tax
Although Louisiana does not impose transfer taxes on real estate transfers, sophisticated investors utilise various strategies to optimise their overall tax posi - tion, including entity structure planning, tax-deferred exchanges under IRC Section 1031 and opportunity zone investments. 8.3 Municipal Taxes In Louisiana, municipal occupational licence taxes are generally levied on real estate businesses. Specific licence tax rates vary by parish and municipality. 8.4 Income Tax Withholding for Foreign Investors See the discussion of FIRPTA in 2.11 Legal Restric- tions on Foreign Investors . In certain circumstances, the seller of real estate may apply to the Internal Rev - enue Service for a withholding certificate certifying an exemption from FIRPTA withholding or a reduction of the amount to be withheld. Foreign investors receiving rental income from US real estate are generally subject to a withholding tax on gross rental income, though such withholding is beyond the scope of this article. 8.5 Tax Benefits US income tax benefits for real estate includes pref - erential long-term capital gain rates on dispositions. Additional significant tax benefits include: • depreciation deductions; • bonus depreciation for qualified improvement property; • deductibility of mortgage interest and property taxes; • 1031 tax-deferred exchanges to defer capital gains tax; and • opportunity zone investments offering capital gains deferral and potential exclusion Louisiana-specific incentives include the Restoration Tax Abatement Program, which provides property tax abatements for renovations of existing structures in designated districts, and various historic preservation tax credits.
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