Louisiana ~ Multiple Taxes: Manufacturers Must Carry Forward Excess Inventory Tax Credits

CCH Tax Day Report

Louisiana Gov. John Bel Edwards has signed legislation that prevents a manufacturer’s excess income and franchise tax credit for ad valorem taxes paid on inventory from being refunded. Instead, the excess credit may be carried forward for up to five years. In addition, the legislation requires the Louisiana Department of Revenue to promulgate rules to ensure that related or affiliated parties be considered one taxpayer for the purpose of the limitations on refundability. The legislation expands the definition of a “manufacturer” to include a person who meets existing definition of a manufacturer and who has claimed the ad valorem exemption under the Louisiana Constitution during the taxable year in which the local inventory taxes were levied.

The changes made by the new legislation apply to all claims for ad valorem tax credits on any return filed on or after July 1, 2016, regardless of the taxable year to which the return relates. However, the changes do not apply to an amended return filed on or after July 1, 2016, provided that the credits were properly claimed on an original return filed before July 1, 2016.

Act 5 (S.B. 10), Laws 2016, effective June 28, 2016, applicable as noted



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