A Louisiana sheriff just denied a tax exemption for a local small business. Can he do that?

(This post originally appeared on The Washington Post)

Shreveport-based Inferno Manufacturing is a 21-person maker of high pressure valves and gaskets used in the oil industry. In 2016, the company bought a $480,000 piece of machinery that it says will increase its production capabilities and also add three employees. As in the past, the company — like many other manufacturers in the state — submitted the item for an exemption from local property taxes.

The request for the tax exemption was denied. By the local sheriff.

“It just didn’t appear like there was an economic value for the citizens,” Steve Prater, the sheriff of Caddo Parish told The Advocate. In Prater’s opinion, the machinery purchase was just “business as usual and shouldn’t be subsidized by taxpayers.”

Since when does a local sheriff get the authority to deny a company’s request for a tax exemption?

For 80 years, Louisiana’s Industrial Tax Exemption program has allowed manufacturers to take advantage of a 10-year property tax exemption for eligible equipment that satisfied certain requirements, chief among them whether the investment would increase employment. Requests were rarely denied. But in 2016 Gov. John Bel Edwards (D) changed that by not only shrinking the exemption period but also giving local authorities — like Sheriff Prater — more power to decide whether the exemptions were worth the loss in taxes to their jurisdiction.

Prater appears to be the first local official to actually deny such a request, and now larger manufacturers are worried that this is a foreshadowing of things to come. Some companies in the state receive millions of dollars of tax breaks from the exemption. Both business leaders and state officials are concerned that if more local authorities follow in the sheriff’s footsteps, businesses may be motivated to pick up and move operations to nearby Texas, where there’s no income taxes.

“The program has been one of the state’s most effective economic development tools for decades,” Stephen Waguespack, president of Louisiana Association of Business and Industry, the state’s largest business lobby and a major supporter of the break told the Advocate. “Right now, it’s in a state of chaos, and that lack of certainty has made it very unclear about what the role is for locals and what it means for companies who want to invest here.”

Sheriff Prater says “I don’t begrudge the companies for trying, but fair is fair.”

Meanwhile, Allan Organick, the president of Inferno, is still hopeful that other local authorities will join in and approve his request. After all, $6,000 may not be much to the parish or the state, but the tax break is very meaningful for a company his size.