State considers changing assessments on commercial vessels

The Louisiana Tax Commission has reviewed proposals for assessments on vessels and carbon capture technologies, with a decision likely next month.

The meeting centered primarily on competing proposals for assessing taxes on commercial vessels for 2024.

Wendy Thibodeaux, Lafourche Parish assessor representing the Louisiana Assessors’ Association, offered her rebuttal to a proposal to tax watercraft using a new system based on dead weight tonnage from the Offshore Marine Service Association.

Thibodeaux said information on vessel tonnage is difficult to find, alleging “there is no third party that gives the tonnage” or capacity of the watercraft. She argued vessel owners can also modify aspects of the vessels to adjust what they can carry.

“I just don’t think that’s sustainable because that can change from year to year,” Thibodeaux said.

She also objected to assessments based on a five-year average proposed by OMSA. Thibodeaux proposes instead to update current values more frequently to reflect the market, to bring a better balance to assessments on offshore vessels and in-shore vessels.
OMSA attorney J Adams, representing 140 companies operating offshore energy vessels, argued a lack of data from the assessor’s association makes it difficult to evaluate fairness.

OMSA’s proposal was done through a third party company, Vessel Values based in London, using market data and dead weight tonnage.

The five-year timeline “is more predictable and more transparent,” which would benefit both the industry and assessors, he said.

He provided an example of a vessel valued at $9.1 million currently that would go to $12.7 million under OMSA’s proposal and $18.5 million under the LAA proposal. He said the dead weight tonnage is verifiable information set when a vessel is constructed that represents its total potential carrying capacity.

“There’s a tremendous amount of data,” he said. “It’s something that’s third party and readily available.”

The commission is expected to review the proposals and rebuttals before coming to a decision in September.

Other discussions focused on assessments for carbon capture technology, with a request from the LAA to delay rules and regulations for carbon capture, sequestration or utilization properties to gather more information on the emerging industry.

Calcasieu Parish Assessor Wendy Aguillard, representing the LAA, asked the commission to assemble a working group with industry leaders “so we can come up with some good valuations for the future of this process,” noting projects in the works have yet to gain federal approvals.

Bob Adair with the Louisiana Mid-Continent Oil and Gas Association suggested companies would prefer rules now to understand the tax implications of investments that run into the hundreds of millions.

“They’re trying to get a handle on what they can project on the property taxes,” he said.

Commissioners suggested if the commission opts to establish a working group, it would be essential to set a timeline for completion to avoid drawn-out disagreements of the past. Aguillard suggested discussions over a couple of months to prepare for rules in 2025.