Last Modified: Thursday, August 15, 2013 5:08 PM
State lawmakers on Thursday approved tax incentives for Sasol’s multi-billion dollar ethane cracker and gas-to-liquid complex, a move that will help the petrochemical company take the next step in its Westlake expansion.
The state’s Joint House and Senate Budget Committee unanimously approved the incentive package, which includes a 10-year industrial property tax exemption and a competitive projects payroll incentive program. The payroll program provides rebates for up to 15 percent of the participating company’s new payroll — the jobs a company creates after it receives approval — for up to 10 years.
Michael Hayes, Sasol’s public affairs manager for U.S. megaprojects, said the incentives will help “improve (the company’s) economic calculation” as it seeks to finance the project. He added that the incentives help companies like Sasol bring industry to the state.
“They also help to counteract penalties that exist in the U.S. tax code,” Hayes said. “On the ethane cracker and GTL project the U.S. was competing with Canada. The business tax rate in the U.S. is about 35 percent. The same tax rate in Canada is between 15 and 20 percent. So the U.S. is in adverse position when competing with Canada. These incentives help Louisiana compete internationally.”
The committee’s decision came just six days after it had delayed approving the tax package to obtain more information on how much the incentives would cost Louisiana taxpayers.
The proposed complex is estimated to cost Sasol between $16 billion and $21 billion. The project remains in the permitting process with the state Dept. of Environmental Quality and the U.S. Army Corps of Engineers. If the project receives approval from both agencies, Sasol officials hope to break ground on the new complex by next spring.