Section 47:602 - Determination of taxable capitalA. Taxable capital. (1) Taxable capital shall be the amount of a corporation's issued and outstanding capital stock, surplus, and undivided profits.(2) Every corporation taxed under this Chapter shall determine the amount of its issued and outstanding capital stock, surplus, and undivided profits as the basis for computing the franchise tax levied under this Chapter and determining the extent of the use of its franchise in this state.B. Holding corporation deduction. Any corporation having as a subsidiary a banking corporation as defined below shall be entitled to deduct from its taxable capital, as defined in this Chapter, its investments in and advances to such subsidiary banking corporation to the extent that such investments and advances exceed the difference between the total assets and the taxable capital of the holding corporation. "Subsidiary banking corporation" is defined to be a banking corporation organized under the laws of the United States of America or of the state of Louisiana the capital stock of which to an extent of at least eighty percent is owned by a holding corporation.C. Public utility holding corporation deductions. Any corporation registered under the Public Utility Holding Company Act of 1935 having subsidiary corporations as defined hereinbelow, shall be entitled to deduct from the amount of its Louisiana taxable capital the amount of its investments in and advances to subsidiary corporations allocated to Louisiana as provided herein. The amount of the deduction allowed shall be determined by multiplying the sum of the regulated company's investments in and advances to all of its subsidiary corporations wherever located, by the parent corporation's average ratio as determined pursuant to R.S. 47:606. If the amount of its franchise tax calculated by utilizing the applicable formula provided for in R.S. 47:601 is less than one hundred thousand dollars for any tax year, then the tax for such year shall be one hundred thousand dollars. "Subsidiary corporation" is defined to be a corporation in which at least eighty percent of the voting power of all classes of its stock, not including nonvoting stock which is limited and preferred as to dividends, is owned by a registered public utility holding corporation. Any repeal of the Public Utility Holding Company Act of 1935 shall not affect the entitlement to deductions under this Subsection of corporations registered under the provisions of the Public Utility Holding Company Act of 1935 prior to its repeal.D. Holding corporation deductions. (1) Any corporation having one or more subsidiary public water utility corporations as defined herein shall be entitled to deduct from the amount of its taxable capital the amount of its investments in and advances to the subsidiary public water utility corporation in computing its franchise tax.(2) "Subsidiary public water utility corporation" is defined to be any public utility corporation organized under the laws of the state of Louisiana, subject to the jurisdiction of the Public Service Commission under R.S. 45:1161 et seq., engaged in operating a waterworks or in furnishing water and related services, and in which at least eighty percent of the voting power of all classes of its stock, not including nonvoting stock which is limited and preferred as to dividends and stock which is otherwise nonvoting during the taxable year, is owned by a holding corporation.E. Deduction for members of certain controlled groups. (1) Any corporation in a controlled group, having as a member of such group a telephone corporation regulated by the Louisiana Public Service Commission, shall be entitled to deduct from its taxable capital, as defined in this Chapter, its investment in and advances to any member of the controlled group.(2) For purposes of this Subsection, "controlled group" is defined to be a group of affiliated corporations at least one of which is regulated by the Louisiana Public Service Commission and holds a certificate of public convenience and necessity issued by the Louisiana Public Service Commission to provide local exchange telephone service and other members of which are engaged in providing telephone, cellular, microwave, paging, data-transmission, or other telecommunications services and includes subsidiary, brother-sister, or tier corporations engaged in the sale, manufacture, maintenance, financing, or installation of equipment to facilitate the providing of telephone and other related services, and the capital stock of which, to an extent of at least eighty percent, is owned by another member of the controlled group. This Subsection shall not apply to any corporation primarily engaged in activity unrelated to the telecommunications services referred to in the Subsection.F. Insurance holding corporation deduction. For tax years beginning on and after July 1, 2002 and before January 1, 2005, any corporation owning at least eighty percent of the capital stock of a subsidiary property and casualty insurance corporation, such subsidiary having capital and surplus of less than twenty million dollars, shall be entitled to deduct from the amount of its taxable capital the amount of its investments in and advances to such subsidiary insurance corporation that was allocated to Louisiana under R.S. 47:606(B).G. Holding company deduction. (1) Any corporation, as defined in R.S. 47:601(C), that is subject to the franchise tax imposed by R.S. 47:601(A) and that is not subject to Subsection B, C, D, E, or F of this Section, that has one or more subsidiaries as defined hereinbelow, shall be entitled to deduct from its taxable capital, as defined in this Chapter, its investments in and advances to one or more subsidiaries, whether made directly or indirectly, in computing its franchise tax as provided herein.(2) For purposes of this Subsection, "subsidiaries" shall be defined as any corporation, as provided for in R.S. 47:601(C), that is subject to the franchise tax imposed by R.S. 47:601(A), and in which at least eighty percent of the voting and nonvoting power of all classes of their stock, membership, partnership, or other ownership interests are owned, directly or indirectly, by a corporation subject to the franchise tax imposed by R.S. 47:601(A).(3) The amount of the deductions allowed by this Subsection shall be the sum of the amounts determined by multiplying parent corporation's investments in and advances to each subsidiary by each subsidiary's average ratio, as determined pursuant to R.S. 47:606.(4) Any direct or indirect subsidiary of a regulated company, as provided for in Subsection C of this Section, that directly owns at least eighty percent of the voting power of the stock, membership, partnership, or other ownership interests in a "public-utility company", as defined by the Public Utility Holding Company Act of 1935 prior to its repeal, may use the holding corporation deduction provided in this Subsection with respect to investments in and advances to subsidiary corporations or subsidiary limited liability companies to calculate its taxable capital.H. The deduction for "investments in and advances to" as provided for in this Section shall only include amounts included in the taxable capital of the recipient.La. Revenue and Taxation § 47:602
Acts 1970, No. 385, §1; Acts 1973, No. 119, §1; Acts 1982, No. 34, §1; Acts 1990, No. 385, §1, eff. Jan. 1, 1991; Acts 1994, No. 40, §1, eff. for all taxable periods beginning after Dec. 31, 1994; Acts 1994, 3rd Ex. Sess., No. 134, §1, eff. July 7, 1994, applicable to any taxable period beginning on or after Jan. 1, 1994; Acts 2002, No. 59, §1, eff. for taxable years beginning after June 30, 2002, and before Jan. 1, 2005; Acts 2004, 1st Ex. Sess., No. 2, §1, eff. Jan. 1, 2006; Acts 2008, 2nd Ex. Sess., No. 10, §1, eff. May 13, 2008, for taxable periods beginning on or after July 1, 2008, and §2, eff. for taxable periods beginning on or after Jan. 1, 2011; Acts 2016, 1st Ex. Sess., No. 12, §2, eff. March 10, 2016.Amended by Acts 2016EX1, No. 12,s. 2, eff. 3/10/2016, op. 1/1/2017.Acts 1970, No. 385, §1; Acts 1973, No. 119, §1; Acts 1982, No. 34, §1; Acts 1990, No. 385, §1, eff. 1/1/1991; Acts 1994, No. 40, §1, eff. for all taxable periods beginning after 12/31/1994; Acts 1994, 3rd Ex. Sess., No. 134, §1, eff. 7/7/1994, applicable to any taxable period beginning on or after 1/1/1994; Acts 2002, No. 59, §1, eff. for taxable years beginning after 6/30/2002, and before 1/1/2005; Acts 2004, 1st Ex. Sess., No. 2, §1, eff. 1/1/2006; Acts 2008, 2nd Ex. Sess., No. 10, §1, eff. 5/13/2008, for taxable periods beginning on or after 7/1/2008, and §2, eff. for taxable periods beginning on or after 1/1/2011.See Acts 2016, 1st Ex. Sess., No. 12, §3, regarding applicability.