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-308 - Exemptions

Current through Register Vol. 50, No. 6, June 20, 2024
A. General
1. Corporations organized for the purposes
				described in §308. B 1-15 of this Section are fully exempt from the payment of
				Louisiana Corporation Franchise Tax. Only those corporations which meet the
				prescribed standards of organization, ownership, control, sources of income,
				and disposition of funds are exempt from the tax, whether or not they may enjoy
				exemption from any other tax, federal, state, or local, or whether or not they
				may be specifically exempted from all taxes under the laws of the state in
				which they were organized, chartered, or domiciled.
2. A corporation is not exempt from the
				corporation franchise tax merely because it is a nonprofit organization. In
				each case, an organization other than those described in §308. B.1.a ii and iii
				as limited by §308. B.1.c.i and ii, must file a verified application for
				exemption with the Secretary of Revenue and Taxation which shall include an
				affidavit showing, in addition to such other information as the secretary may
				deem necessary from any particular applicant, the following:
a. character of the organization;
b. purpose for which organized;
c. its actual activities;
d. ownership of stock in the
				corporation;
e. the source of its
				income;
f. the disposition of its
				income;
g. whether or not any of
				its income is credited to surplus, and if so, the intended future use of the
				retained amounts;
h. whether any of
				its income may inure to the benefit of any shareholder or individual;
i. a copy of the charter or articles of
				incorporation;
j. bylaws of the
				organization;
k. the latest
				statement of the assets, liabilities, receipts, and disbursements;
l. any other facts relating to its operations
				which affect its right to exemption from the tax; and
m. a copy of the ruling or determination
				letter issued by the federal Internal Revenue Service.
3. The required application for exemption may
				be filed by an organization before it has started operations or at any time it
				can describe its operations in sufficient detail to permit a conclusion that it
				will be clearly exempt under the particular requirements of the Section for
				which the exemption is sought.
4.
				Once the secretary has issued a ruling or determination letter that an
				organization, except those described in §308. B.1.a ii and iii, as limited by
				§308. B.1.c.i and ii, meets the exemption requirements, there is no mandatory
				provision that it make a return or any further showing that it meets the
				specified requirements unless it changes the character of its organization or
				operations. The secretary reserves the right to review any exemption granted,
				and may require the filing of whatever information deemed necessary to permit
				proper evaluation of the exempt status.
5. No exemption will be granted to a
				corporation, other than those described in §308. B.1.a ii and iii, as limited
				by §308. B.1.c.i and ii, organized and operated for the purpose of carrying on
				a trade or business for profit, even though its entire income may be
				contributed or distributed to another organization or organizations which are
				themselves exempt from the tax.
6.
				An application for exemption filed by a corporation under either the Louisiana
				income tax law or the Louisiana corporation franchise tax law may be accepted
				by the secretary as fulfilling the application requirements under both laws.
				Taxpayers are cautioned, however, that approval of exemption under either law
				does not grant exemption under the other law in the absence of a statement
				contained in the ruling to that effect.
7. A corporation is either entirely exempt
				from the corporation franchise tax law or it is wholly taxable. There is no
				statutory provision under which partial exemption may be granted.