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Louisiana State Tax Updates

For the latest news and updates on Louisiana state and local tax

February 2020

Louisiana Issues Guidance for Pass-Throughs Electing C-Corp Status

The Louisiana Department of Revenue recently issued guidance regarding the new corporate income tax regulations for pass-through entities electing to be taxed as a C corporation. The Department has begun accepting elections as of February 1, 2020, for taxable years beginning on or after January 1, 2019.[1] Elections can be made in the prior taxable year that the election was in effect. The election can also be made on or prior to the 15th day of the fourth month after the close of the taxable year the election is initially in effect. Pass-through entities electing to be taxed as a C corporation must meet specific requirements. On election day, members with more than a 50% interest in the entity, based upon capital accounts, must do the following:

  1. Approve the election
  2. Inform the Department in writing of this approval at the time of the election
  3. File Form R-6980, Tax Election for Pass-Through Entities, with the Department

Subsequently, the entity must electronically file Louisiana Form CIFT-620, Corporation Income Tax and Franchise Tax Return, for the taxable year in which the election was made as well as all tax years thereafter until the election is terminated.

[1] U.S. Department of Revenue Policy Services Division. Internal Revenue Service. (2020). Election of Pass-Through Entities (LAC 61.I.1001). Retrieved from http://revenue.louisiana.gov/LawsPolicies/NOI%20LAC%2061.I.1001%20(Proposed%20Regulation).pdf.

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