Registration Requirements in Louisiana
Louisiana requires new businesses to register with the Louisiana Secretary of State, Louisiana Department of Revenue, and the Louisiana Workforce Commission. Louisiana has created a website for businesses to fulfill all their registration requirements. See the following link for more information.
S Corporation Tax
Louisiana does not recognize the federal S election. Therefore, S corporations in Louisiana must file and pay the states corporate income tax. The corporate tax for S corps is taken as a ratio of non-Louisiana residents vs. Louisiana residents. If all shareholders are Louisiana residents, S corporations will not owe corporate income tax. Each individual shareholder must pay state tax on his or her share of income.
Louisiana corporation income tax is based on marginal tax rates as follows:
S Corporations file annual returns on Form CIFT-620 Louisiana Corporation Income Tax
LLCs and partnerships are not required to pay Louisiana corporate franchise tax and corporate income tax. Instead, business income is split between LLC members and partnership partners, and who then pay state taxes on the amounts allocated to them. If all members of a partnership are natural Louisiana citizens, a Partnership return is not required to be filed. Partnerships with non residents will be required to file Form IT-565 - Partnership Return of Income
Corporate Franchise Tax
Louisiana corporation franchise tax is a net worth tax essentially imposed for the privilege of doing business in Louisiana. The basic breakdown is as follows:
- $1.50 for each $1,000 or major fraction thereof up to $300,000 of capital used in Louisiana; and
- $3.00 for each $1,000 or major fraction thereof in excess of $300,000 of capital used in Louisiana.
Partnerships engaging in business in Louisiana that have nonresident partners must file a composite partnership return. The only partnerships that are exempt from this have one of the following:
- All nonresident partners are corporations, partnerships, or tax exempt trusts; or
- All nonresident individual partners have a valid agreement on file with the Department of Revenue.
The composite return must be filed electronically and a tax rate of 6% is assessed on the total distributive shares for nonresident partners.
Individual Income Tax
Louisiana generally conforms to the Internal Revenue Code on a rolling basis, and therefore adopts most federal provisions, unless otherwise modified.
The starting point for computing Louisiana's personal income tax liability is the federal adjusted gross income.
Louisiana has a combined personal exemption and standard deduction, which is based on your filing status. Here are the amounts for 2019:
- Single filers and those married filing separately: $4,500
- Married filing jointly, qualifying widow(er)s and heads of household: $9,000
You are able to take an itemized deduction, which is state defined, but only if you itemized on your federal return.
Louisiana does not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Shareholders and partners with gross income assignable to Louisiana may need to file an individual income tax return that reflects their portion of Louisiana income.
Louisiana has three individual income tax rates — 2%, 4% and 6%. Your tax rate and tax will depend on your filing status and your Louisiana taxable income.
CARES Act Guidance
Rolling conformity states generally automatically adopt changes to the IRC as they are enacted at the federal level, unless otherwise modified. Louisiana specifically does not conform to the IRC Section 172 of the CARES Act regarding business net operating loss (NOL) provisions. Instead, Louisiana will retain its treatment of business NOLs, not allowing any carryback and allowing only a 20-year carryforward.
In response to the pandemic, Louisiana has temporarily suspended franchise tax for small businesses within July 1, 2020 - June 30, 2021. Typically, $1.50 of franchise tax for each $1,000 is levied on the first $300,000 of taxable capital and an initial franchise tax of $110 but this will no longer apply within this time frame.
Corporate income and franchise tax returns are due on the 15th day of the 5th month following the close of an accounting period (May 15th for calendar year filers).
Partnership returns are due on the 15th day of the 4th month following the close of a fiscal period (April 15th for calendar year filers).
Individual Income and Composite Partnership returns are due on the 15th day of the 5th month following the close of an accounting period (May 15th for calendar year filers).
If the due date is on a weekend or holiday, the return and payment must be filed/postmarked by the following business day.
Estimated Payment Requirements
Corporations and individuals who can reasonably expect their tax liability to be over $1,000 are required to make estimated payments.
Corporations estimated payments are due on the 15th day of the 4th, 6th, 9th, and 12th month of the tax year.
Individual estimated payments are due on the 15th day of the 4th, 6th, 9th month of the tax year. The fourth payment is due on the 15th day of the first month of the following tax year.
Vouchers for corporations can be found here
Vouchers for individuals can be found here
For corporations and composite partnership returns, Louisiana will only accept an extension to file request electronically. In order to file an extension, see the website found here:
Individuals may also request an extension at the website above, but may also request on paper using this form:
All requests for an extension must be filed by the original due date of the return.
Corporation and individual returns which are filed delinquent are penalized at 5% of the tax for each 30 days or fraction thereof which the return is not filed. The max delinquent filing penalty is 25%. Late payments are subject to a penalty of .5% for each 30 day or fraction thereof. Not to exceed 25%.
Partnership returns which are fraudulent or were willfully not filed on time are subject to a penalty not to exceed $1,000.
If your business was formed or is located in another state, but generates income in Louisiana, it may be subject to Louisiana taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
Louisiana Department of Revenue
Louisiana Secretary of State