La. Admin. Code tit. 61 § I-311

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

Section I-311 - Newly Taxable Corporations

A. Every corporation or other entity subject to the franchise tax shall pay only the minimum tax in the first accounting period or fraction thereof in which it becomes subject to the tax. It is immaterial whether the corporation became liable for the tax on the first day or the last day of the accounting period regularly used by the taxpayer in keeping its books; the minimum tax is due for that accounting period. The tax accrues immediately upon the corporations becoming subject thereto.

B. The tax for all accounting periods subsequent to the period in which the corporation became subject to the tax accrues on the first day of the period and is based on the previous period's closing.

C. In all instances, the tax is payable on or before the fifteenth day of the fourth month following the month in which the tax accrues.

D. Notwithstanding the provisions of this Section, the initial tax of an entity in existence and actually conducting business in Louisiana, as reflected in the definition of doing business found in R.S. 47:601(A)(1), during its previous calendar or fiscal year shall be calculated pursuant to R.S. 47:609, based on its corporate books on the first day of the calendar or fiscal year in which the tax levied under this Chapter becomes due and shall be payable on or before the date otherwise required by this Section.

E. For entities previously determined not subject to corporate franchise taxation under the Utelcom, Inc. and Ucom, Inc. v. Bridges, 2010-0654 (La. App. 1 Cir. 9/12/11), 77 So. 3d 39, Writ Denied 2011-2632 (La. 3/2/12), 84 So. 3d 1046 decision, such entities shall be liable for the franchise tax pursuant to R.S. 47:611(B) for the 2017 franchise tax period based on the entities corporate books on the first day of the 2017 calendar or fiscal year.

F. Examples.

1. On February 1, 2017, one hundred fifty natural persons organized Limited Liability Company A. Limited Liability Company A is a domestic limited liability company as defined by R.S. 12:1301(A)(10). Limited Liability Company A elected to be taxed as a corporation pursuant to 26 U.S.C. Subtitle A, Chapter 1, Subchapter C for federal income tax purposes and is ineligible to make an election to be taxed in accordance with the provisions of 26 U.S.C. Subtitle A, Chapter 1, Subchapter S for federal income tax purposes because its membership exceeds one hundred members. Therefore, Limited Liability Company A must file a corporate franchise tax return and remit an initial tax of one hundred ten dollars on or before May 15, 2017.

2. Corporation A was previously determined not subject to corporate franchise taxation under the Utelcom, Inc. and Ucom, Inc. v. Bridges, 2010-0654 (La. App. 1 Cir. 9/12/11), 77 So. 3d 39, Writ Denied 2011-2632 (La. 3/2/12), 84 So. 3d 1046 decision. Corporation A, a calendar year taxpayer, holds a limited partnership interest in Partnership B. Partnership B conducts business in Louisiana in 2016 and 2017. Because of Corporation As partnership interest in Partnership B, which conducted business in Louisiana in 2016, Corporation A is deemed to have conducted business in Louisiana in 2016 and is subject to initial franchise tax pursuant to R.S. 47:611(B) for the 2017 franchise tax period. The tax is based on Corporation As corporate books on January 1, 2017 and is payable on or before April 15, 2017.

La. Admin. Code tit. 61, § I-311

Promulgated by the Department of Revenue and Taxation, Income and Corporation Franchise Taxes Section, Office of Group III, LR 6:25 (January 1980), amended LR 11:108 (February 1985), repromulgated by the Department of Revenue, Policy Services Division, LR 30:469 (March 2004), Amended LR 441637 (9/1/2018).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:611.