Louisiana ~ Multiple Taxes: CAT Bill Introduced

CCH Tax Day Report

A bill has been introduced in the Louisiana House of Representatives that would, if enacted, impose a commercial activity tax (CAT) on the taxable gross receipts of each entity doing business in Louisiana. The CAT would be required in addition to any other Louisiana tax for which the entity may be liable. Entities with less than $150,000 in gross receipts, non-profit organizations and certain organizations not formed for pecuniary profit, certain public utilities, and certain financial institutions would be exempt from the CAT.

For business entities that are not corporations, the CAT would be as follows:

– $250 if the entity’s gross receipts are at least $150,000, but equal to or less than $500,000;

– $500 if the entity’s gross receipts are more than $500,000, but equal to or less than $1 million;

– $750 if the entity’s gross receipts are more than $1 million, but equal to or less than $1.5 million;

– $1,500 if the entity’s gross receipts are more than $1.5 million, but equal to or less than $3 million;

– $3,250 if the entity’s gross receipts are more than $3 million, but equal to or less than $6 million;

– $6,500 if the entity’s gross receipts are more than $6 million, but equal to or less than $12 million; and

– $12,500 if the entity’s gross receipts are more than $12 million.

Corporations and entities that are taxed as corporations for federal income tax purposes, except corporations engaged in the business of manufacturing or merchandising, would pay the greater of the following:

– The net corporation income tax due after the application of all credit carryforwards, nonrefundable credits, and refundable credits; or

– One of the following amounts: (a) $250 if the entity’s gross receipts are at least $150,000, but equal to or less than $500,000, (b) $500 if the entity’s gross receipts are more than $500,000, but equal to or less than $1 million, (c) $750 if the entity’s gross receipts are more than $1 million, but equal to or less than $1.5 million, or (d) 0.35% of the amount of gross receipts if the entity’s gross receipts are greater than $1.5 million.

Corporations and entities that are taxed as corporations for federal income tax purposes that are engaged in the business of manufacturing or merchandising or gaming would pay the greater of the following:

– The net corporation income tax due after the application of all credit carryforwards, nonrefundable credits, and refundable credits;

– One of the following amounts: (a) $250 if the entity’s gross receipts are at least $150,000, but equal to or less than $500,000, (b) $500 if the entity’s gross receipts are more than $500,000, but equal to or less than $1 million, or (c) $750 if the entity’s gross receipts are more than $1 million, but equal to or less than $1.5 million; or

– The lesser of the following: (a) 0.35% of the amount of gross receipts if the entity’s gross receipts are greater than $1.5 million, or (b) 2.76% of the amount of the entity’s Louisiana gross profits.

Consolidated returns would have to be filed by a corporation that is the sole member of one or more single member limited liability companies, a corporation that is the sole shareholder of one or more qualified S corporation subsidiaries, or certain publicly traded partnerships.

Subscribers can view the text of the introduced bill.

HB_628-Introduced

H.B. 628, introduced in the Louisiana House of Representatives on April 17, 2017

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