LOUISIANA clarified in late August that owners of new merchant power plants built in the state qualify for a 10-year holiday from parish and local property taxes.

Louisiana hopes to turn itself into a center for electricity generators. Developers have proposed building at least 23 new power plants in the state. The tax at the parish level ranges from 0.5% to 1.5% of assessed value of industrial property, excluding land value, and is paid annually. The holiday applied in the past to other types of “industrial” facilities. Some utilities claimed the holiday for their power plants. The Board of Commerce and Industry said it wanted to end any uncertainty about whether the tax holiday also applies to merchant power plants and also make clear that the application for an exemption can be submitted early in the development process.

The board also called on the state legislature to eliminate a 4% sales tax on fuel used in power plants.

WEST VIRGINIA increased a reclamation tax on coal mining from 3¢ to 14¢ a ton, effective next January 1. The measure passed the state legislature on September 15.

The new rate would remain in effect through March 2005, after which it would drop to 7¢ a ton. The tax applies to all surface mining of coal, including recovery of coal from gob piles and silt ponds. The money collected from the tax is used to clean up abandoned mines.

VIETNAM imposed a 25% surtax on highly profitable companies.

The tax will be collected on top of the normal 32% corporate income tax and is retroactive to the start of the current income tax reporting year, which started in July. It will apply to any company that reports after-tax income of more than 20% of its capital base. Companies with special tax holidays or that operate in special manufacturing zones may be temporarily exempted.

PERU adjusted its income tax rates.

Rates will be higher in 2002 than in 2001. The new base income tax rate for corporations and partnerships will be 27%. An additional tax of 4.1% must be paid on profits that are distributed in an effort to encourage companies to reinvest earnings rather than distribute them to shareholders. Branches of foreign companies doing business in Peru will be subject to income tax at a 30% rate.

At the same time, Peru will make it easier to carry forward losses. Companies have been able to carry forward losses for up to four years. This will not change, but the four years will be measured in the future from the first year in which the company has profits.

Keith Martin