Buc-ee’s: a look at the tax implications and how officials feel the travel center will help the local economy

By Malcolm Butler

With the news last week that Lincoln Parish will be getting the first Buc-ee’s in the state of Louisiana, a lot has been asked about the tax implications involving luring the wildly popular travel center to north Louisiana.

What did Lincoln Parish and the City of Ruston have to “give up” to make the deal for the $50 million development that will be built on the north side of I-20 on Tarbutton Road?

The answer is 5.75 percent for 20 years.

Ruston mayor Ronny Walker said that sales tax exemption exists only for Buc-ee’s and that any additional properties that are built within the 82-acre footprint would not receive the exemption, thus bringing in additional sales tax revenue for the city and parish.

He believes it’s a huge coup for the area, especially when focused on the big picture.

“Rising tides lifts all ships,” said Walker, who believes that the addition of Buc-ee’s will only draw more out-of-parish dollars to the area as well as more businesses.

“It’s a way to get people off I-20 (in Ruston),” said Walker. “Are we giving up something? Not really, because there’s not one thing currently out there on that property. The fact that we were able to get the first one in the state is really big. Just look at all the publicity we have received locally and regionally since the news game out. We had to do some things to even get (Buc-ee’s representatives) here to listen to us.”

So what is the sales tax part of this Cooperative Endeavor Agreement (see full agreement below)?

Lincoln Parish will surrender 5.75% sales tax for the first 20 years of Buc-ee’s existence in Ruston. Where does that total come from?

  • 0.25 percent from the Lincoln Parish Sheriff’s Department
  • 0.75 percent from the Lincoln Parish Police Jury
  • 2.75 percent from the City of Ruston
  • 2.00 percent from the Economic Development District

Lincoln Parish Sheriff Stephen Williams said he felt it was a no-brainer for the parish.

“To me we are giving up something we didn’t have,” said Williams, referring to sales tax that otherwise wouldn’t be collected with no businesses in that area. “We weren’t going to get (Buc-ee’s) if we didn’t give it up. It is a chance to bring 200 plus good jobs to our parish.

“The first time we met early on a year ago, they showed us aerial views of other Buc-ee’s locations and how they built up around them quickly. We will gain tax revenue from those additional businesses. It’s more jobs for the community. I believe 95 percent of the revenue is going to be off the interstate. I think it will be a money generator for the parish in the long run. That positive outweighed the negative.”

Although the Lincoln Parish School Board didn’t surrender sales tax, they did surrender their portion of the property tax for 20 years.

However, LPSB Superintendent Ricky Durrett also believes it’s a win for Lincoln Parish.

“We think it’s a positive,” said Durrett. “We think the 200 good paying jobs that it is going to create, that’s going to just enhance people in our community. I think it just puts more money into our economy which will in turn help more at the grocery store, more restaurants, more doing everything. I think it’s a risk like anything else, but I do think the upside to it is very positive.”

Based on some projections that Durrett was given by Buc-ee’s representatives, he said they expect an additional $1M annually from their portion of the sales tax. Durrett said that money will go toward health insurance (for current and retired employees), salary supplements (13th and 14th checks), and some instructor and enrichment positions (within the elementary system).

Walker also made note that the city really is only surrendering .97 percent thanks to Ruston’s participation within the state’s tax incremental district.

“It’s really the only reason we were able to get to the number needed,” said Walker. “Buc-ee’s said they needed us to get to 5.75 percent in order for them to come to Ruston.”

According to Walker, the tax incremental tax district runs parallel along I-20 and the state receives 4.5 percent sales tax for any businesses located within that footprint. The state then in turn sends back 40 percent of that total (1.78 percent) that Ruston can use for work only within that tax incremental district footprint (roads, bridges, water, sewer, electricity).

Thus, instead of surrendering 2.75 percent of sales tax, the city is only surrendering .97 percent due to the state returning the 1.78 percent for the tax incremental district.

“The service roads we have today, the bridge across to Wal-Mart and Tarbutton … none of that would have been possible without the tax incremental district because that is where the money came from to build every one of those,” said Walker. “It’s about $50 million worth of construction.

“The only reason we could do that is because (former mayor) Hilda Taylor Perritt got us into the tax incremental district. Us and Monroe are the only two cities in the state that have that. It was offered and no other cities were smart enough to jump on it. Hilda was smart enough to say it was a no-brainer.”

Walker said he believes that the addition of Buc-ee’s will be the tide that helps raise additional business in Ruston and the surrounding area.

“If we have 25,000 to 50,000 cars get off the interstate each month and stop at Buc-ee’s, they are stopping in Ruston,” said Walker. “Some of them, I’m not saying all of them, but some of them are going to come into town and check it out. They may go to (Louisiana) Tech and check it out. They may go to the Eddie Robinson Museum. They may stop at a hotel or a restaurant.”

Walker also noted that Buc-ee’s will provide $250,000 to the City of Ruston within 30 days of opening the travel center to the general public to be used at the discretion of the City. Walker said $200,000 of it would go towards the Ruston Sports Complex.

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