Judge rules against coffee giant in tax exemption lawsuit

An Orleans Parish judge in Louisiana lifted an injunction in the Folgers Coffee Co. tax exemption lawsuit, allowing local taxing authorities to bill the company for an estimated $5.1 million.

Prompted by a decision Gov. John Bel Edwards made Monday to reject the coffee giant’s final appeals for six Industrial Tax Exemption Program (ITEP) applications, Orleans Civil Court Judge Omar Mason dissolved the preliminary injunction Folgers had won in November to hold off on paying property taxes on its New Orleans facilities.

Orleans Parish Assessor Errol Williams said in a press release Thursday that he now has the green light to finally proceed with putting the disputed properties on the assessment rolls, generating approximately $5.1 million in back taxes since 2019. Williams will also file change orders with the Louisiana Tax Commission for 2023 to assess what Folgers owes for this year.

Under ITEP, the company sought millions of dollars in six separate property tax breaks for upgrades it completed at its Chef Menteur Highway and Old Gentilly Road plants. However, three local taxing bodies — the New Orleans City Council, Orleans Parish Sheriff’s Office and Orleans Parish School Board — denied all six of Folgers’ applications.

New Orleans officials then sent Folgers a $5.1 million bill for the unpaid back and current taxes. In response, Folgers filed a lawsuit and successfully convinced a judge to halt the tax bill based on the argument that its ITEP applications were still pending an administrative appeal with the Louisiana Board of Commerce and Industry.

In a split decision on March 2, that board sided with Folgers, approving all six of its exemptions for school board taxes and two of its exemptions for the city taxes. The Board of Commerce and Industry, composed mostly of unelected businessmen and others appointed by the governor, inexplicably singled out New Orleans public schools to bear the brunt of the tax revenue loss. However, the board still needed Edwards to sign off on the applications, and the governor refused.

Edwards’ refusal meant there was no longer any reason for the injunction, though it’s unclear if Folgers plans to appeal the judge’s ruling. J.M. Smucker, the parent company of Folgers, did not immediately respond to a request for comment Friday.