Corporation Income and Franchise Taxes

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Corporation Income Tax

Who must file

All corporations and entities taxed as corporations for federal income tax purposes deriving income from Louisiana sources, whether or not they have any net income, must file an income tax return. Corporations that obtain a ruling of exemption from the Internal Revenue Service must submit a copy of the ruling to the Department to obtain an exemption.

Rate of Tax

Corporations will pay tax on net income computed at the following rates:

  • Four percent on the first $25,000 of net income
  • Five percent on the next $25,000
  • Six percent on the next $50,000
  • Seven percent on the next $100,000
  • Eight percent on the excess over $200,000

Date tax due

Returns and payments are due on or before the 15th day of the fourth month following the close of an accounting period (April 15 for a calendar year).

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Corporation Franchise Tax

Who must file

Any corporation meeting any of the following provisions, unless specifically exempted under the provisions of R.S. 47:608, must file a Louisiana corporation franchise tax return:

  1. Organized under the laws of Louisiana.
  2. Qualified to do business in this state or doing business in this state.
  3. Exercising or continuing the corporate charter within this state.
  4. Owning or using any of the corporate capital, plant, or other property in this state in a corporate capacity.

Rate of Tax

$1.50 for each $1,000 or major fraction thereof up to $300,000 of capital employed in Louisiana, and $3 for each $1,000 or major fraction thereof in excess of $300,000 of capital employed in Louisiana. The initial corporation franchise tax is $10. For information concerning capital employed in Louisiana and computation of the tax, see the instructions for Forms ICFT-620 and 620A.

Date returns due

Initial return: An initial return covering the period beginning with the date the corporation first becomes liable for filing a return and ending with the next close of an accounting period must be filed on or before the 15th day of the third month after the corporation first becomes liable.

Annual return:Louisiana corporation franchise tax accrues on the first day of each accounting year, and the return for that period must be filed on or before the 15th day of the fourth month of that accounting year.

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Declaration of estimated tax

R.S. 47:287.654 requires that corporations pay estimated income tax if the corporation’s income tax less any credits for the taxable year can reasonably be expected to be $1,000 or more. If the corporation is required to pay estimated income tax, the percentage of the estimated tax must be paid on the 15th day of the following months based on the period in which the estimated tax payment requirement was met:

Date Requirement Was Met Amount Due On 15th Day Of The Following Month
4th Month 6th Month 9th Month 12th Month
Before the 1st day of the 4th month of the taxable year 25% 25% 25% 25%
After the last day of the 3rd month and before the 1st day of the 6th month of the taxable year   33⅓% 33⅓% 33⅓%
After the last day of the 5th month and before the 1st day of the 9th month of the taxable year     50% 50%
After the last day of the 8th month and before the 1st day of the 12th month of the taxable year       100%

Recomputation Of Estimated Tax

If, after paying any installment of estimated tax, the taxpayer determines that a new estimate is required, the payment amounts for the remaining installments may be increased or decreased, as the case may be. The amount required by the new estimate is computed by calculating the difference between the previous estimated tax amount and the new estimated tax amount and dividing that difference between the number of installments remaining to be paid.

Overpayment Of Estimated Income Tax Installment

If a corporation pays a tax installment that is more than the correct amount of the installment, R.S. 47:287.660 allows the overpayment to be credited against the corporation’s unpaid installments, and any excess to be credited or refunded.

Adjustment Of Overpayment Of Estimated Income Tax

Revised Statute 47:287.656 allows corporations to file an application for an adjustment of an overpayment of its estimated income tax for a taxable year. The application must be filed after the close of the taxable year and on or before the 15th day of the fourth month thereafter, and before the tax return is filed. However, no application will be allowed unless the adjustment amount is at least ten percent of the corporation’s estimated tax amount and more than $500. This application for an adjustment of overpayment of estimated income tax does not represent a claim for credit or refund. There is no application form for this adjustment. However, the request should include the following information:

  1. The estimated income tax paid by the corporation during the taxable year.
  2. amount that the corporation estimates its income tax liability is for the taxable year.
  3. amount of the adjustment.
  4. other pertinent information.

Within 45 days of the date that an application for an adjustment is filed, the adjustment will be allowed or disallowed if it is determined that the application contains material omissions or errors. If the adjustment is allowed, the secretary may credit the amount of the adjustment against any other tax liability owed by the corporation and refund the remainder.

If it is later determined that adjustment amount was excessive, a penalty of 12 percent annually of the excessive amount from the date on which the credit was allowed or the refund is paid to the due date for the taxable year. For the purposes of the penalty, the excessive amount is the lesser of the amount of the adjustment or the amount by which the corporation’s income tax liability exceeds the estimated income tax paid during the taxable year reduced by the amount of the adjustment.

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Requesting an Extension of Time for Filing a Return

Revised Statute 47:287.614 allows an extension of time for filing the combined corporation income and franchise tax return not to exceed seven months from the date the return is due. All extension requests must be made electronically on or before the return’s due date. The return’s due date is April 15th for calendar year filers, and the 15th day of the fourth month following the close of the taxable year for fiscal year filers. Extension requests received after the return’s due date or on paper will not be honored. An extension may be requested in the following manner:

  1. Requesting the extensions electronically through the bulk extension filing application or the Online Extension Filing application on LDR web site;
  2. Filing an extension request electronically via LDR’s IVR phone system by calling 225-922-3270 or 888-829-3071. For an extension request, select option #3, then select option #2. Taxpayers will need the Corporation’s LA account number to request the extension; or
  3. Requesting the extensions electronically through tax preparation software that supports the electronic filing of the Louisiana Application for Extension to File Corporation Income and Franchise Tax.

Payments cannot be made through the bulk extension filing application on LDR’s website. Electronic payment can be made through tax preparation software that supports the option, through LaTap; or by credit card at Officialpayments.com. If you need to mail in a check or money order, you must use the electronically filed extension payment voucher, Form CIFT-620EXT-V. This voucher can be printed through the Online Extension Filing application or the Online Payment Voucher application.

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Filing an Amended Return

In order to amend the amounts reported for the computation of income or franchise taxes, you must file an amended (corrected) Form CIFT-620. Louisiana Revised Statute 47:287.614(C) requires every taxpayer whose federal return is adjusted to furnish a statement disclosing the nature and amounts of such adjustments within 60 days after the adjustments have been made and accepted. This statement should accompany the amended return.

To file a paper amended return:

  1. Use the correct form for the tax year you are amending. Louisiana does not have a separate form for amending a return.
  2. File the amended return as if the original return was not filed. Do not make any adjustments for refunds previously received or for payments previously made.
  3. The return should be clearly marked with an "X" in the "Amended Return" box.
  4. The amended return should be submitted along with a detailed explanation of the change(s) and a copy of the federal amended return, Form 1120X, if one was filed.
  5. To apply for a tentative refund resulting from the carryback of a net operating loss, use Form R-6701, CIT-624 Request for a Tentative Refund Resulting from the Election to Carryback a Net Operating Loss.
  6. Mail the amended return to the following address:

    Louisiana Department of Revenue
    P.O. Box 91011
    Baton Rouge, La 70821-9011

You also have the option of filing the amended return electronically through the LDR Fed/State e-file program for corporation income and franchise tax returns.

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