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Louisiana Senate Bill 268, one of a pair of lithium-focused bills filed by Senator Stewart Cathey Jr., would establish a state sales tax rebate program for Louisiana lithium projects. This rebate would apply to sales tax paid for “all equipment, machinery, materials, improvements, and other items purchased 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.”

Details of the Rebate Program

The amount of the rebate would be equal to the amount of sales tax actually paid by the applicant in connection to any aspect of the qualified lithium recovery project, from initial development and drilling to processing and transportation. As proposed, the rebate program would apply to all purchases made on or after July 1, 2024, and would terminate on December 31, 2025. SB268 has already passed the senate Committee on Revenue and Fiscal Affairs, which inserted several amendments aimed towards keeping would-be tax dollars in the state by restricting the rebate to Louisiana lithium projects.

Purpose of the Rebate Program

The text of the proposed statute explains that the purpose of the rebate program is to contribute to national energy independence and to grow and develop Louisiana’s critical energy resources by incentivizing lithium production. This mirrors the purpose of similar incentives for domestic lithium production included in the Inflation Reduction Act, namely the Advanced Manufacturing Production Credit (10% tax credit on costs incurred to produce lithium) and Clean Vehicle Credit (applicable to electric vehicles containing certain percentages of domestically-sourced critical minerals).

With the passage of SB268 – along with its sister bill SB285, which we covered here –Louisiana would take another step towards satisfying the ever-growing demand for lithium with in-state sources. You can read the full text of SB268 as amended here.

If you have questions about lithium developments, reach out to Jamie Rhymes, Joe Heaton, and Caleb Madere.

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Photo of Jamie D. Rhymes Jamie D. Rhymes

Jamie Rhymes is an experienced energy and business lawyer helping oil and gas producers resolve their difficult disputes and sophisticated contract issues.  For over 20 years, local, Louisiana independents and international majors have relied on Jamie’s technical knowledge and practical approach to defend…

Jamie Rhymes is an experienced energy and business lawyer helping oil and gas producers resolve their difficult disputes and sophisticated contract issues.  For over 20 years, local, Louisiana independents and international majors have relied on Jamie’s technical knowledge and practical approach to defend high-stakes oil and gas litigation, commercial litigation, environmental cases, decommissioning, orphan wells, coastal land-loss claims, citizen suit litigation, royalty litigation and other claims arising from business in Louisiana.

Photo of Caleb J. Madere Caleb J. Madere

Caleb practices in the areas of Energy & Natural Resources Law and Energy Litigation. His practice focuses on title examination, contract negotiation, and various issues relating to the acquisition and divestiture of mineral interests. Caleb also has experience in the emerging renewables industry…

Caleb practices in the areas of Energy & Natural Resources Law and Energy Litigation. His practice focuses on title examination, contract negotiation, and various issues relating to the acquisition and divestiture of mineral interests. Caleb also has experience in the emerging renewables industry where he has experience drafting and negotiating solar leasing agreements for clients and has advised clients on carbon capture and sequestration projects. He also has experience litigating various oil and gas, property, and environmental matters, including joint operating agreement disputes, mineral lease maintenance disputes, and environmental contamination suits.

Photo of Joe Heaton Joe Heaton

Joe is an energy litigator practicing in the firm’s Lafayette office.

Joe received his Juris Doctor, magna cum laude, from the Paul M. Hebert Law Center, Louisiana State University, where he served on the SBA Committee on Safety, Sensitivity, and Sustainability and as…

Joe is an energy litigator practicing in the firm’s Lafayette office.

Joe received his Juris Doctor, magna cum laude, from the Paul M. Hebert Law Center, Louisiana State University, where he served on the SBA Committee on Safety, Sensitivity, and Sustainability and as the SBA Ethics Committee Chair.  He also received his Masters Degree in Psychology from the University of Tennessee at Chattanooga where he completed his thesis, “Exploring relationships between stress and olfaction as mediated by neuropeptide y.”