§1675. General administrative provisions for credits against income and corporation
franchise tax
A. Unless specifically provided for herein or in the statute granting the credit against
income or corporation franchise tax:
(1)The tax credit is not refundable.
(2)The tax credit does not carry forward or carry back.
(3)The tax credit cannot be used for taxes that became due in a tax year prior to the
year in which the credit was initially earned or granted.
(4)The tax credit is not transferable.
(5)The tax credit cannot be used to reduce interest or penalty.
(6)(a) If a tax credit has an annual or total program cap or limit on the total amount
of the credit which may be allowed to taxpayers within a certain time period, the tax credit
shall be administered on a first-come, first-served
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§1675. General administrative provisions for credits against income and corporation
franchise tax
A. Unless specifically provided for herein or in the statute granting the credit against
income or corporation franchise tax:
(1) The tax credit is not refundable.
(2) The tax credit does not carry forward or carry back.
(3) The tax credit cannot be used for taxes that became due in a tax year prior to the
year in which the credit was initially earned or granted.
(4) The tax credit is not transferable.
(5) The tax credit cannot be used to reduce interest or penalty.
(6)(a) If a tax credit has an annual or total program cap or limit on the total amount
of the credit which may be allowed to taxpayers within a certain time period, the tax credit
shall be administered on a first-come, first-served basis.
(b) However, all tax credit requests received on the same business day shall be
treated as received at the same time, and if the aggregate amount of tax credit requests
received on a single business day exceed the amount of tax credits available, tax credits shall
be approved on a pro rata basis.
B. Priority of credits. The department shall apply credits against income and
corporation franchise tax. The provisions of this Subsection shall supersede and control to
the extent of conflict with any other provision of law. Credits and payments shall be applied
in the following order:
(1) Current year nonrefundable credits with no carry forward.
(2) Refundable tax credits. Refundable credits, other than the credit provided for in
R.S. 47:6006, that are allowable against both income and corporation franchise tax shall be
applied first against income tax. Any credit in excess of the income tax liability shall then
be applied against corporation franchise tax.
(3) Any carry forward amount from a tax credit earned, granted, or received in a prior
year, in the order of the length of the carry forward period remaining, beginning with the
shortest carry forward period.
(4) Current year nonrefundable credits with a carry forward, in the order of the length
of the carry forward period, beginning with the credit with the shortest carry forward period.
(5) Tax credits that are transferable, but that are not refundable that the taxpayer
elects to apply against the tax.
(6) Refundable tax credits provided for in R.S. 47:6006.
(7) Estimated payments, the credit for withholding, and other payments of tax.
C. Definitions.
(1) When used in a statute granting a credit against income or corporation franchise
tax, the term "carryover" shall mean carry forward.
(2) Value of donations of property or services. When a credit is available for the
donation of property or services, unless otherwise provided in the statute granting the credit:
(a) The value of any donated property shall mean the fair market value of that
property.
(b) The value of any service donated shall mean the fair market value of that service
in the community in which the service was performed.
D. Unless otherwise provided in the statute granting the credit, credits against
income or corporation franchise tax are earned in the tax year in which the person has
completed all requirements set forth in the statute granting the credit.
E. Unless otherwise provided in the statute granting the credit, if two or more
taxpayers share in costs that would be eligible for any of the following credits, each taxpayer
may take the credit in proportion to that taxpayer's respective share of the costs paid or
incurred:
(1) Credit for neighborhood assistance, R.S. 47:34 and 287.749.
(2) Credit for donations to assist qualified playgrounds, R.S. 47:6008.
(3) Credit for donations to public schools, R.S. 47:6013.
(4) Credit for rehabilitation of historic structures, R.S. 47:6019.
(5) Any credit for which the statute granting the credit specifically provides for a
credit in proportion to that taxpayer's respective share of the costs paid or incurred.
(6) Any other credit listed in regulations promulgated by the secretary.
F. Application of credit.
(1) Unless otherwise provided in the statute granting the credit, credits earned,
granted, allocated, or transferred shall be claimed as follows:
(a) All entities taxed as a C corporation for federal income tax purposes shall claim
any credit allowed on their corporation income tax return.
(b)(i) If an entity not subject to Louisiana income tax acquires an income tax credit,
the credit shall flow through to partners or members as provided in the operating agreement
of the entity or shareholders as provided in the corporate bylaws of the S corporation. In the
absence of an operating agreement or corporate bylaws, the credit shall flow through to each
partner or member in accordance with the partner or member's ownership interest in the
entity, or to each shareholder in accordance with the number of issued and outstanding shares
of capital stock of the S corporation which are owned by the shareholder relative to the total
number of issued and outstanding shares of capital stock of the S corporation on the last day
of the S corporation's taxable year.
(ii) Partners or members that are C corporations shall claim their share of the credit
on their corporate income tax return.
(iii) Partners, members, or shareholders of an S corporation that are individuals shall
claim their share of the credit on their individual income tax return.
(iv) Partners, members, or shareholders of an S corporation that are estates or trusts
shall claim their share of the credit on their fiduciary income tax return.
(c) Estates or trusts shall claim any credit allowed on their fiduciary income tax
return.
(d) Individuals shall claim any credit allowed on their individual income tax return.
(2) Unless flow through of the credit is prohibited by the statute granting the credit,
if an entity not subject to Louisiana income tax or corporation franchise tax earns a credit and
has a tax year-end different from that of a partner or member, the credit is available in the
same tax year in which the partner or member is required to report any income or loss from
that entity.
(3) An entity not subject to Louisiana income tax or corporation franchise tax must
prepare and distribute to each partner or member a schedule detailing the partner or member's
share of each credit earned and any recapture that is required. Copies of these schedules
must be attached to each return on which the credit is claimed.
(4) The provisions of this Subsection shall not apply to entities that make an election
pursuant to R.S. 47:287.732.2. Beginning with the taxable year for which the election is first
made, the entity shall apply any credits earned at the entity level.
G. Repealed by Acts 2025, No. 382, §2, eff. June 20, 2025.
H. Transferable income or corporation franchise tax credits.
(1) Unless otherwise provided in the statute granting the credit:
(a) A person is not required to apply a transferable credit against its own tax liability
prior to transferring all or part of the credit.
(b) If a person either earns the credit or receives the credit by flow through, the credit
will be treated as a tax item and can only be applied against tax.
(c) If a person acquires a credit through transfer, the credit is property and can be
used to pay any outstanding tax liability for the tax against which the credit was originally
granted and any related penalty and interest. Interest and penalties will continue to accrue
at the statutory rates until the date the department receives a return on which the credit is
claimed. The provisions of Paragraphs (A)(3) and (5) will not apply to this Subparagraph.
(d) A tax credit cannot be claimed on a tax return or utilized as a payment prior to
the effective date of transfer, as reflected in the Tax Credit Registry pursuant to R.S.
47:1524, between the transferor and transferee.
(e) To claim a credit on a tax return, either:
(i) The effective date of transfer shall be on or before the due date of the return,
without regard to the granting of any extension; or
(ii) On or before the due date of the return, without regard to the granting of any
extension, the transferor and transferee shall have executed a binding agreement to transfer
the credit. The agreement shall be on a form approved by the secretary. The specific project
from which the credit shall be generated, specific type of transferable credit, and the exact
amount of credit to be transferred shall not be required terms of the agreement.
(iii) For purposes of this Paragraph, "effective date of transfer" means the date of
transfer as reflected in the Tax Credit Registry pursuant to R.S. 47:1524.
(iv) A credit acquired through transfer can be applied to any allowable tax liability
that is due for the year the credit was originally earned or to any year due afterward until the
applicable carryforward period is over.
(f) A tax credit with an effective date of transfer or an executed transfer agreement
entered into after the due date of the return, without regard to the granting of any extension,
shall be applied only to any allowable tax, penalty, and interest and shall not be claimed as
a credit on a tax return.
(g) A credit acquired through transfer that is applied as a payment may be applied
to any allowable tax liability, interest, and penalty that is due provided that the applicable
carryforward period of the credit has not expired.
(2) Income from the transfer of a Louisiana transferable tax credit is income from
Louisiana sources.
I. Repealed credits and credits with sunset provisions. Unless otherwise provided
in the statute granting or repealing the credit, any remaining carry forward from a credit that
has been repealed or otherwise made inoperative shall continue to be applied and carried
forward under the provisions of the statute granting the credit immediately before it expired
or was repealed.
J. Documentation for tax credits.
(1) Record retention.
(a) For credits with no carry forward provision, original records supporting any credit
claimed must be maintained for four years following the date the return was filed claiming
the credit.
(b) For credits with a carry forward provision, original records supporting the credit
must be maintained for four years following the date on which the last return was filed
claiming the credit.
(2) Documentation supporting a tax credit shall be provided by a taxpayer claiming
a tax credit as required by rule or on forms or instructions provided by the secretary.
NOTE: See Acts 2016, 1st Ex. Sess., No. 23, §2 and Acts 2016, No. 661, §3,
regarding applicability.
NOTE: See Acts 2019, No. 442, re: applicability.