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-311 - Newly Taxable Corporations

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				Every corporation or other entity subject to the franchise tax shall pay only
				the minimum tax in the first accounting period or fraction thereof in which it
				becomes subject to the tax. It is immaterial whether the corporation became
				liable for the tax on the first day or the last day of the accounting period
				regularly used by the taxpayer in keeping its books; the minimum tax is due for
				that accounting period. The tax accrues immediately upon the corporations
				becoming subject thereto.
B. The
				tax for all accounting periods subsequent to the period in which the
				corporation became subject to the tax accrues on the first day of the period
				and is based on the previous period's closing.
C. In all instances, the tax is payable on or
				before the fifteenth day of the fourth month following the month in which the
				tax accrues.
D. Notwithstanding the
				provisions of this Section, the initial tax of an entity in existence and
				actually conducting business in Louisiana, as reflected in the definition of
doing business
found in
				R.S.
				47:601(A)(1), during its
				previous calendar or fiscal year shall be calculated pursuant to
				R.S.
				47:609, based on its corporate books on the
				first day of the calendar or fiscal year in which the tax levied under this
				Chapter becomes due and shall be payable on or before the date otherwise
				required by this Section.
E. For
				entities previously determined not subject to corporate franchise taxation
				under the
Utelcom, Inc.
and
Ucom, Inc. v.
				Bridges
, 2010-0654 (La. App. 1 Cir. 9/12/11), 77 So. 3d 39, Writ
				Denied 2011-2632 (La. 3/2/12), 84 So. 3d 1046 decision, such entities shall be
				liable for the franchise tax pursuant to
				R.S.
				47:611(B) for the 2017
				franchise tax period based on the entities corporate books on the first day of
				the 2017 calendar or fiscal year.
F. Examples.
1. On February 1, 2017, one hundred fifty
				natural persons organized Limited Liability Company A. Limited Liability
				Company A is a domestic limited liability company as defined by
				R.S.
				12:1301(A)(10). Limited
				Liability Company A elected to be taxed as a corporation pursuant to 26 U.S.C.
				Subtitle A, Chapter 1, Subchapter C for federal income tax purposes and is
				ineligible to make an election to be taxed in accordance with the provisions of
				26 U.S.C. Subtitle A, Chapter 1, Subchapter S for federal income tax purposes
				because its membership exceeds one hundred members. Therefore, Limited
				Liability Company A must file a corporate franchise tax return and remit an
				initial tax of one hundred ten dollars on or before May 15, 2017.
2. Corporation A was previously determined
				not subject to corporate franchise taxation under the
Utelcom,
				Inc.
and
Ucom, Inc. v. Bridges
, 2010-0654 (La. App. 1
				Cir. 9/12/11), 77 So. 3d 39, Writ Denied 2011-2632 (La. 3/2/12), 84 So. 3d 1046
				decision. Corporation A, a calendar year taxpayer, holds a limited partnership
				interest in Partnership B. Partnership B conducts business in Louisiana in 2016
				and 2017. Because of Corporation As partnership interest in Partnership B,
				which conducted business in Louisiana in 2016, Corporation A is deemed to have
				conducted business in Louisiana in 2016 and is subject to initial franchise tax
				pursuant to
				R.S.
				47:611(B) for the 2017
				franchise tax period. The tax is based on Corporation As corporate books on
				January 1, 2017 and is payable on or before April 15, 2017.