Louisiana Administrative Code › Title 61 - REVENUE AND TAXATION › Part I - Taxes Collected and Administered by the Secretary of Revenue › Chapter 3 - Corporation Franchise Tax › Section I-302 - Determination of Taxable Capital

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				Taxable Capital. Every corporation subject to the tax imposed by
				R.S.
				47:601 must determine the total of its
				capital stock, as defined in
				R.S.
				47:604, its surplus and undivided profits, as
				defined in
				R.S.
				47:605, and its borrowed capital, as defined
				in
				R.S. 47:603,
				which total amount shall be used as the basis for determining the extent to
				which its franchise and the rights, powers, and immunities granted by Louisiana
				are exercised within this state. Determination of the taxable amount thereof
				shall be made in accordance with the provisions of
				R.S.
				47:606 and
				R.S.
				47:607, and the rules and regulations issued
				thereunder by the secretary of revenue and taxation.
B. Holding Corporation Deduction. Any
				corporation which owns at least 80 percent of the capital stock of a banking
				corporation organized under the laws of the United States or of the state of
				Louisiana may deduct from its total taxable base, determined as provided in
				§302.A and before the allocation of taxable base to Louisiana as provided in
				R.S.
				47:606 and
				R.S.
				47:607, the amount by which its investment in
				and advances to such banking corporation exceeds the excess of total assets of
				the holding corporation over total taxable capital of the holding corporation,
				determined as provided in §302 A
C.
				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
				R.S.
				47:602(B), (C), (D), (E), or
				(F), that has one or more subsidiaries, will
				be entitled to deduct from its taxable capital its investments in and advances
				to one or more subsidiaries, whether made directly or indirectly, when
				computing its franchise tax.
1. The term
subsidiaries
shall include 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 80 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).
2. The amount of deduction allowed will be
				the sum of the amounts determined by multiplying the parent corporations
				investments in and advances to each subsidiary by each subsidiarys average
				ratio, as determined pursuant to
				R.S.
				47:606.
3. Any direct or indirect subsidiary of a
				regulated company, as provided for in
				R.S.
				47:602(C), that directly
				owns at least 80 percent of the voting power of the stock, membership,
				partnership, or other membership 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 with respect to
				investments in and advances to subsidiary corporations or subsidiary limited
				liability companies to calculate its taxable capital.
4. Example. Company A is a corporation owning
				one hundred percent of Company B. Company B is a non-Louisiana corporation
				qualified to do business in Louisiana. Company B is a one hundred percent
				member of XYZ LLC. XYZ LLC is an out of state limited liability company that
				owns property in Louisiana and has elected to be treated as a corporation
				pursuant to 26 U.S.C. Subtitle A, Chapter 1, Subchapter C, for federal income
				tax purposes. XYZ LLC would be subject to Louisiana corporation franchise tax.
				Company B would be subject to Louisiana corporation franchise tax as a one
				hundred percent member of XYZ LLC. Company A would not be subject to Louisiana
				corporation franchise tax. Company B would be eligible for the holding company
				deduction.
5. Nothing in this
				Subsection shall extend franchise tax liability to any limited liability
				company at least eighty percent owned, directly or indirectly, by any entity
				subject to the bank shares tax pursuant to
				R.S.
				47:1967.