2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:287.732.2. Election for S corporations and other flow-through entities

RS 47:287.732.2 - Election for S corporations and other flow-through entities
A.(1) Any S corporation or entity taxed as a partnership for federal income tax purposes may elect to be taxed and to comply with this Part in the same manner as if the entity had been required to file an income tax return with the Internal Revenue Service as a C corporation. S corporations that make this election shall not be eligible for the exclusion provided in R.S. 47:287.732.
(2) The election shall be made in writing and may be made at any time during the preceding taxable year, or at any time during the taxable year and on or before the fifteenth day of the fourth month after the close of the taxable year. The secretary may treat an election made after the fifteenth day of the fourth month after the close of the taxable year as timely made for the taxable year if the secretary determines that there was reasonable cause for the failure to make the election timely.
(3) The election shall be effective for the taxable year of the entity for which it is made and for all succeeding taxable years of the entity, until the election is terminated by the secretary or an application for prospective termination of the election is effective.
(4)(a) An entity that has made an election pursuant to this Section may apply to the secretary for termination of the election if shareholders, partners, or members holding more than one-half of the ownership interest in the entity on the day on which the revocation is requested consent to the revocation request.
(b) The secretary may terminate an entity's election if the entity shows a material change in circumstances. A significant change in federal tax law may be considered by the secretary as a material change in circumstances.
(c) An application for prospective termination of the election shall be effective automatically for the subsequent taxable year upon completion of the following:
(i) The shareholders, partners, or members holding more than one-half of the ownership interest in the entity consent, in writing and maintained in the entity's records, to the application for prospective termination.
(ii) The entity timely submits the application for prospective termination to the secretary, in a manner as prescribed by the secretary, no later than November first prior to the close of the taxable year for calendar year filers or sixty days prior to the close of the taxable year for fiscal year filers.
(d) Upon the entity's completion of Items (c)(i) and (ii) of this Paragraph and the automatic effectiveness of the election's termination, no election otherwise allowed by this Section shall apply for the succeeding five taxable years of the entity or its successor.
B. Notwithstanding any provision of law to the contrary, the tax on the Louisiana taxable income of every entity that makes the election pursuant to this Section shall be computed at the rates of:
(1) One and eighty-five one hundredths percent upon the first twenty-five thousand dollars of Louisiana taxable income.
(2) Three and one-half percent upon the amount of Louisiana taxable income above twenty-five thousand dollars but not in excess of one hundred thousand dollars.
(3) Four and one-quarter percent upon the amount of Louisiana taxable income above one hundred thousand dollars.
C. Repealed by Acts 2021, No. 396, §2, eff. Jan. 1, 2022.
D. The secretary may require the electronic filing of tax returns or reports filed by entities making an election pursuant to this Section.
E. Unless otherwise provided in this Section, the provisions of this Part shall apply to all entities making an election pursuant to this Section.
F. Any entity filing a composite partnership return pursuant to R.S. 47:201.1 is prohibited from making the election pursuant to this Section for the same tax year.
G. The secretary may promulgate rules necessary for administering the provisions of this Section in accordance with the provisions of the Administrative Procedure Act.
Acts 2019, No. 442, §1, eff. June 22, 2019; Acts 2021, No. 396, §§1, 2, eff. Jan.1, 2022; Acts 2023, No. 450, §1.
NOTE: See Acts 2019, No. 442, re: applicability.