La. Admin. Code tit. 13 § I-1915

Current through Register Vol. 50, No. 9, September 20, 2024

Section I-1915 - Yearly Determination of Tax Equalization Amount

A. The contract of tax equalization shall, on an annual basis, effect equality in amount between the taxes payable in Louisiana and the taxes which would have been payable in the competing state. For each taxable year of the contractee, at the time of filing the contractee's annual Louisiana corporate income and franchise tax return, the contractee shall furnish. to the Department of Revenue and the Department of Economic Development, the following, where applicable, on an annual basis:

1. a taxable year compilation of what would have been the state and local sales and use taxes, including any applicable tax incentives, of the contractee had it located in the competing state, together with a compilation of the actual Louisiana state and local sales and use taxes paid for the contractee's taxable year;

2. using forms provided by the competing state, a computation of the corporate income tax and corporate franchise tax, including any applicable incentives, which would have been owed had the contractee located in the competing state;

3. all other state and local returns or tax payment information, including any applicable tax incentives, for the contractee's taxable year which would have been filed or paid by the contractee had the contractee located in the competing state; and

4. all other tax returns, including any applicable incentives, filed in the state of Louisiana with other state agencies or local governments.

B. The contractee shall authorize the Department of Economic Development to review all tax returns of the contractee and to share the information with the Department of Revenue.

C. The data reflecting the tax burden, including any available tax incentives. which would have been incurred in the competing state shall be compiled on behalf of the contractee by an independent certified public accounting firm. The CPA firm shall certify to the best of its knowledge and belief that the data furnished are true and correct statements of the taxes which would have been incurred during the taxable year of the contractee had the contractee originally located in the competing state, using the same level of business activity that the contractee enjoys in Louisiana.

D. Annually for each taxable year of the contractee and on the basis of all pertinent information, the Department of Revenue shall compute the total tax liability of the contractee in Louisiana and the total tax liability that the contractee would have incurred had the contractee located in the competing state. The Department of Economic Development, Office of Business Development Services will assist the Department of Revenue should any audit of the tax data for the competing state be necessary.

E. If the total tax liability of the contractee in Louisiana for the contractee's taxable year is greater than the total tax liability that the contractee would have incurred in the competing state, then the contractee's Louisiana tax liability shall be reduced by allowing an exemption until the Louisiana tax burden is equal to the tax burden the contractee would have incurred if it had located in the competing state.

F. Exemptions from taxation for manufacturing establishments shall be granted in the following priority:

1. state corporation franchise tax;

2. state corporation income tax;

3. state sales and use tax on machinery and equipment to be used in manufacturing;

4. state sales and use taxes on materials and supplies required in the manufacture or production of a product;

5. any other tax imposed by the state of Louisiana to which the applicant is subject.

G. Exemptions from taxation for headquarter shall be granted in the following priority:

1. state corporation franchise tax;

2. state corporation income tax;

3. state sales and use tax on purchases and leases of, and repairs to, machinery and equipment which is used in the on-site operation of the headquarters facility;

4. state sales and use tax on purchases of tangible personal property used in the construction of the headquarters facility;

5. any other taxes imposed by the state to which such businesses are subject.

H. Exemptions from taxation for warehousing and distribution establishments shall be granted in the following priority:

1. state corporation franchise tax;

2. state corporation income tax;

3. state sales and use tax on purchases and leases of, and repairs to, machinery and equipment which is used in the on-site operation of the warehousing and distribution establishment;

4. state sales and use tax on purchases of materials and supplies necessary for the on-site operation of the warehousing and distribution establishment;

5. state sales and use tax on purchases of tangible personal property used in the construction of the warehousing and distribution establishment;

6. any other taxes imposed by the state to which like businesses are subject.

La. Admin. Code tit. 13, § I-1915

Promulgated by the Department of Economic Development, Office of Commerce and Industry, LR 15:1048 (December 1989), amended by the Department of Economic Development, Office of Business Development, LR 37:3503 (December 2011).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:3201-3206.