§305.81. Rebate; state sales and use tax for purchases of equipment, machinery, and other items used in lithium recovery activities

            A. Critical minerals are essential for various industries, including energy, defense, and technology. To ensure energy independence for the United States, a diversified approach, including supply chain diversification, is also critical. To this end, it is recognized as essential to the continued growth and development of the critical energy resources of the state and to the continued prosperity of the people of the state that lithium recovery projects be encouraged. With global demand for lithium expected to quadruple by 2030, it is also recognized that lithium recovery will benefit the citizens of the state by encouraging energy independence and reducing the reliance on foreign imports of lithium for use in the production of batteries and other items. It is the purpose of this Section to provide an economic incentive to companies to allow them to invest in lithium recovery projects in Louisiana to enhance Louisiana's lithium production to the ultimate benefit of this state and the United States.

            B. In order to accomplish the purposes set forth in Subsection A of this Section, there shall be allowed a rebate for the state sales tax paid by any company evaluating, developing, or engaged in production from a qualified lithium recovery project for all equipment, machinery, materials, improvements, and other items purchased and used in Louisiana in connection with the development, production, operation, storage, processing, or transportation of lithium or lithium refined products in connection with a qualified lithium recovery project.

            C. The amount of the rebate shall be equal to the amount of state sales tax actually paid by the applicant in connection with the purchase in Louisiana of equipment, machinery, materials, improvements, and other items for use in Louisiana in connection with the development, production, operation, storage, processing, or transportation of lithium or lithium refined products in connection with a qualified lithium recovery project including but not limited to those purchased in connection with the initial development of the project; the drilling of all production, injection, and appraisal wells used in connection with the project; the operation of the project; the production of brine in connection with the project; the extraction of lithium from the brine; the reinjection of the brine; any further processing of the extracted lithium; any storage or transportation in connection with the project; and any other equipment, machinery, materials, improvements, and other items purchased in connection with the qualified lithium recovery project.

            D. For purposes of this Section, a "qualified lithium recovery project" is defined as a lithium recovery and processing project that is or will be developed, constructed, and operated in Louisiana and that is or will be conducted in accordance with sound engineering principles as used in the industry, which includes the production of brine and separating the lithium from the brine, employing direct lithium extraction or any other processes or technology.

            E. An applicant who is claiming the rebate shall apply to the secretary of the Department of Revenue for the rebate in a manner and on a form prescribed by the secretary. To claim the rebate, the applicant shall submit proof of the actual state sales tax paid in connection with qualified purchases under Subsection C of this Section and any other documentation required by administrative rule.

            F. The secretary of the Department of Revenue shall verify each applicant's eligibility for the rebate and shall certify the list of eligible applicants and approved rebate amounts.

            G. The secretary of the Department of Revenue may promulgate rules in accordance with the Administrative Procedure Act as are necessary to implement the provisions of this Section, including rules related to the recapture of the rebate if an applicant is subsequently determined to be ineligible for the rebate. The recapture of a rebate shall be an obligation to be collected and accounted for in the same manner as if it were a tax due to the secretary.

            H. The total amount of tax rebates granted by the department for the life of the program shall not exceed one hundred thousand dollars.

            I. A taxpayer shall not receive any other incentive for any expenditures for which the taxpayer has received a tax rebate pursuant to this Section.

            J. The state sales tax rebate provided in this Section shall terminate on December 31, 2025.

            Acts 2024, No. 327, §1, eff. May 28, 2024.