Multi-state Income Taxes | Companies expanding into Louisiana

Louisiana Multi-State Tax Codes

Louisiana may come in high on both individual (4.5%) and business tax rates (7.5%), but the cost of doing business in this state is low, making it a favorable state for netting higher profits. In addition to this, Louisiana also holds a world-class infrastructure for smooth and efficient interstate business trade and is home to a highly-skilled workforce beneficial to any business.

If you have recently expanded your business into this state, or if you’re considering doing so, understanding the cost of apportionment is important to help you accurately report earnings to the IRS and local governments. 

  • S Corporations

    • Filing Requirements
      • 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. 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.
    • Allocation & apportionment
      • One Factor Formula: Sales Factor
      • Market-based apportionment
        • Louisiana follows the market-based rule in sourcing receipts from the performance of services. Receipts from the sale of service are sourced to Louisiana if and to the extent the service is delivered to a location in Louisiana. The delivery of a tangible medium representing the output of a service does not control the sourcing of receipts from the underlying service.
  • Partnerships

    • Filing Requirements
      • All partnerships doing business in Louisiana or deriving any income from sources therein, must file a Partnership Return of Income, Form IT–565, pursuant to Louisiana Revised Statute (R.S.) 47:201. Form IT-565 is an informational return and as such, the partnership is not subject to the income tax imposed.
    • Allocation & apportionment
      • One Factor Formula: Sales Factor
      • Market-based apportionment
        • Revenues received from customers within the state
  • Employees & individual filers

    • The following individuals are required to file a 2021 Louisiana individual income tax return:
      • Louisiana residents, part-year residents of Louisiana, and nonresidents with income from Louisiana sources who are required to file a federal income tax return must file a Louisiana Individual Income Tax Return.
      • Taxpayers who have overpaid their tax through withholding or declaration of estimated tax must file a return to obtain a refund or credit.
      • Military personnel whose domicile (home of record) in Louisiana and who is required to file a federal income tax return must file a return and report all of their income regardless of where they were stationed.

Ensuring Accurate Tax Filing

Keeping a handle on these different laws and tax implications might be difficult for your staff members but can be accomplished by outsourcing a CPA. Allow an expert who deals with business structuring, accounting, and taxation regularly set up accounting software to factor in applicable tax laws for each US state.

Fusion CPA recently expanded into new states bringing us firsthand experience and knowledge. We have a team of certified public accountants who are highly skilled in handling multistate taxes. Our team of professionals understands the federal and state laws in various states and jurisdictions.

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This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.

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