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Louisiana Income, Franchise Tax Alert

Article
4 minute read
August 18, 2016

As a result of Louisiana’s 2016 Second Extraordinary Legislative Session, the Governor signed the following new income and franchise tax laws to address the state’s budgetary needs: 

Apportionment Factors (as of January 1, 2016) 

Limited Refunds on Inventory Tax Credit 

This new rule applies to returns filed after July 1, 2016, regardless of the taxable year to which the return relates. The law will not apply to an amended return filed on or after July 1, 2016, for any credit properly claimed on an original return filed prior to July 1, 2016.

The new law no longer necessarily permits full refunds on the portion of the tax credit for ad valorem taxes paid on inventory that exceeds the tax liability. Instead, it establishes three groupings of taxpayers, each with different refundability rules and limitations.

These law changes are effective for any return filed on or after July 1, 2016, regardless of the taxable year to which the return relates.

The new law revises certain underlying confidentiality requirements so that the Louisiana Department of Revenue is able to confirm the inventory credit. This legislation also makes the portion of the inventory tax credit that exceeds the tax liability nonrefundable for manufacturers exempt from property taxation under Louisiana’s “Industrial Tax Exemption Program” (ITEP). Instead, any excess credit may now be carried forward for up to five years to offset future tax liabilities.

Other Administrative Changes

For questions about this regulation or other state and local tax matters, please contact us.