The Louisiana Legislature created the Dairy Producers’ Refundable Tax Credit Program in 2007. It provides a dollar-for-dollar reduction against the dairy producers’ state income taxes. The total tax credit is capped at $2.5 million per year and $30,000 per individual dairy producer.
Louisiana dairy producers are eligible for the tax credit, which ranges from $5,000 to $30,000, based on a formula that includes milk production, milk prices, and transportation and production costs. Eligibility for the credit is assessed monthly and paid for each quarter in a year that the U.S. Department of Agriculture’s uniform price drops below the announced production price.
Total production is based on the Louisiana calendar-year milk production within the Federal Milk Market Order System plus additional production not included in the system. The production price for each month is calculated by the Department of Agricultural Economics and Agribusiness
using a complex formula specified by state law.
(This article was published in the winter 2009 issue of Louisiana Agriculture.)