Louisiana’s getting more aggressive in its efforts to attract tech startups, most notably with a tax credit designed to lure digital-media and software businesses.
New Orleans’ stock of tech jobs grew 19 percent between October 2005 (just after Hurricane Katrina) to April 2012, compared with 3 percent nationwide, according to Moody’s Analytics. That may be due at least in part to the tax credit. Between 2008 and 2010, 69 projects qualified for the help, which covers 25 percent of companies’ production costs and 35 percent of payroll expenses for employees who live in Louisiana.
The tax credits appeal in particular to smaller tech companies because they can be sold on an open market. Under state law, the credits a company accumulates can be transferred to any Louisiana taxpayer. A company that doesn’t need its credits—for instance because its tax liability is smaller than the credits—can sell them at a lower price, with the buyers using them to reduce their taxes.
Luring smaller companies has the added benefit of building up the area’s talent pool. That in turn is attracting larger companies to the state. New arrivals include Paris-based Gameloft SA, a company specializing in games for mobile phones that opened a studio in New Orleans last year, and GE Capital, which set up IT offices in the city and plans to hire as many as 300 people over next three years with a broad range of salaries.