Louisiana Franchise Tax 2023 - 2024

Generally, any entity that sells goods or services in Louisiana must collect sales and franchise taxes. This includes both physical products and digital goods, such as software. The state collects these taxes, and the rates vary depending on the region, city, and county. The state has a base sales tax rate, and local governments can levy additional amounts. If you’re a business owner, it’s important to register with the state to collect these taxes. The Department of Revenue also requires all corporations to file an initial return with a minimum franchise tax of $110. The amount of the initial franchise tax is determined by dividing the corporation’s net worth at the close of its first accounting period by its number of shareholders.

The corporate franchise tax is a state-imposed privilege tax levied on a corporation’s capital stock, surplus, and undivided profits. It’s one of the most harmful taxes a state can impose, as it penalizes investment and puts Louisiana at an economic disadvantage with neighboring states that have eliminated theirs. Louisiana has both a Corporation Income Tax and a Corporation Franchise Tax, which are separate but often filed jointly:

Louisiana Corporation Income Tax

• 3.5% on the first $50,000
• 5.5% on the next $100,000
• 7.5% on any income exceeding $150,000

Louisiana Corporation Franchise Tax

$2.75 for each $1,000 (or a major fraction thereof) in excess of $300,000 of capital employed in Louisiana

Failure to Pay Louisiana Franchise Tax

If you’re a Louisiana taxpayer who has filed a tax return but failed to pay the taxes due, you may be subject to delinquent filing and payment penalties. However, you can apply for a waiver of these penalties by submitting a Request For Waiver Of Penalties For Delinquency, Form R-20128. The form is available online and can be submitted electronically or on paper.

Louisiana Franchise Tax Due Dates

The Louisiana Department of Revenue (LDR) has several tax due dates specific to individual, fiduciary, and corporation franchise taxes. These due dates are set in the 2022 Regular Legislative Session Act, Act 410, and were implemented by the Department through final regulations issued in April 2023 and Revenue Information Bulletin 23-011.

Generally, taxpayers who file a Louisiana individual income tax return are required to pay that tax within seven months of the return’s original filing date. However, LDR allows individuals who know they will be unable to file by the deadline to submit a request for an automatic six-month extension of time to file. To receive this extension, there is no need to submit a paper or electronic extension form.

In contrast, those who file a Louisiana corporate franchise tax return are ineligible for the automatic extension of time to file but may still request an extension by submitting a written request to the Commissioner. A payment plan request must also be submitted with this request, and any payments made after the return due date will be subject to interest.