Louisiana Revised Statute 47:1604.1 provides that a negligence penalty can be imposed of 10 percent of the deficiency due to the negligence. This information must be manually researched and processed, which isĪdministratively costly for LDR.
I did not put my corporation state account number on my tax return, and was assessed a negligence penalty-why was that?Ĭorporations are required to include their Louisiana corporation incomeĪnd franchise tax account number on all tax returns. Returns need to be filed until the corporation’s charter is dissolved, liquidated, or withdrawn through the Louisiana Secretary of State. If my corporation is inactive, do I need to file a corporate income/franchise return?. You can call LDR at 85 for instructions to obtain your account number. Who should I contact if I do not know the account number for my corporation?. Who should I contact if I need a letter of good standing?Ī corporation that requires a Letter of Good Standing should contact our Special Collection Unit in the Collection Division. Subtitle A, Chapter 1, Subchapter S, is not subject to franchise tax.įor Franchise tax periods beginning before January 1, 2017, an LLC is not considered to be a corporation for franchise tax purposes, and therefore is not subject to Louisiana franchise tax Any other entity that was acquired during the period Januto December 31, 2013, by an entity that was taxed pursuant to 26 U.S.C. Subtitle A, Chapter 1, Subchapter S on the first day of the franchise tax period is not subject to franchise tax. Any limited liability company qualified and eligible to make an election to be taxed in accordance with the provisions of 26 U.S.C. Subtitle A, Chapter 1, Subchapter C for federal income tax purposes, is now subject to franchise tax if it meets any of the criteria that subject a domestic or foreign corporation to franchise tax, with 2 exceptions: A domestic or foreign entity taxed as a corporation pursuant to 26 U.S.C. Act 12 of the 2016 First Extraordinary Session extended the imposition of the franchise tax to additional types of entities. Starting with the 2017 Franchise tax period, an LLC for Louisiana franchise tax purposes is treated and taxed in the same manner that it is treated and taxed for federal income tax purposes. Income tax purposes, which is the most common situation, the LLC is treated as a partnership for Louisiana income tax purposes. If the LLC is considered a partnership for federal If the LLC is taxed as a corporation for federal income tax purposes, the LLC willīe taxed as a corporation for Louisiana income tax purposes. How are Limited Liability Companies (LLCs) taxed for Louisiana income and franchise tax purposes?Īn LLC is treated and taxed in the same manner for Louisiana income tax purposes as it is treated and taxed forįederal income tax purposes. The franchise tax is imposed on an S corporation in the same manner as it is for a C corporation. 
An S corporation is not exempt from franchise tax. When electing the second method, the Subchapter S exclusion must not offset the net income to be reported on the corporation income and franchise taxes return.
In general terms, the portion of income that can be excluded is determined by the ratio of the number of issued and outstanding shares of the S corporation’s capital stock owned by Louisiana resident individuals to total number of issues and outstanding shares of capital stock.Shareholders who are nonresidents of Louisiana may elect to file the individual nonresident and part-year resident return to report their portion of the income derived from the activities of the S corporation or to allow the corporation to pay the tax at the corporate income tax rate on their portion of the income. Shareholders who are Louisiana residents are required to file a Louisiana individual income tax return to report their portion of the income derived from the activities of the corporation. Since the classification of a Subchapter S corporation is a determination made under federal law, any question regarding that classification must be referred to the IRS.A corporation classified by the IRS as an "S" corporation may exclude all or part of its income derived from the activities of the corporation, depending upon the domicile of the shareholders. For federal tax purposes, an S corporation will determine its items of income and expense in the same manner as if it were a regular "C" corporation. Louisiana taxes Subchapter S corporations, known as S corporations or Sub S corporations, in the same manner as regular corporations, with one exception.
How does Louisiana tax a corporation that is classified by the IRS as an "S" (small business) corporation?. 
Fairs, Festivals, and Other Special Eventsįrequently Asked Questions Corporation Income and Franchise Taxes.
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