The cost of doing business in Louisiana is low, making it a favorable state for netting higher profits, despite high tax rates. The state’s individual income tax rate ranges from 3.5% to 7.%, with a 9.56% corporate income tax rate.
Understanding the cost of apportionment in Louisiana can help you accurately report earnings to the IRS and local government.
S Corporations
- Filing Requirements. All corporations and entities taxed as corporations for federal income tax purposes with income from Louisiana sources must file an income tax return. This applies whether or not you have any net income. Also, if your corporation has an exemption ruling from the IRS, you must submit a copy of this to the state Department for a state exemption.
- Allocation & apportionment. Louisiana follows the single-sales factor rule in sourcing receipts from the performance of services.
Partnerships
Filing Requirements. If your partnership does business in Louisiana or earns any income from state sources, you must file a Partnership Return of Income. This is done as an informational return, via Form IT–565. As such, your partnership isn’t subject to the income tax imposed.
Employees & individual filers
Anyone filing a federal income tax return must file a state return for Louisiana. This includes residents, part-year residents, and nonresidents with income from state sources. If you’ve overpaid through withholding or declaration of estimated tax, you’ll also need file a return for a refund or credit. Note that if you are military personnel living in Louisiana, you must must report all income. This applies no matter where you were stationed.
Download our Multi-State Tax Filing Requirements Guide
Ensuring Accurate Tax Filings
Consulting an expert CPA can help you keep a handle on different laws and tax implications.
Fusion CPA has a team of certified public accountants who are highly skilled in handling multi state taxes. We’re positioned to help you take the stress out of tax season, so you can focus on what really matters.
To see how we can help you with a proactive tax strategy to save you time and money, schedule A Discovery Call with one of our CPAs.
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