S Corporations Taxation in Louisiana: What You Need to Know

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How are S corps taxed in Louisiana?
Louisiana law currently requires S corps to pay income tax at the corporate rates of 4, 5, 6, 7 and 8 percent on all taxable income in excess of $200,000 (if not making a special election available to S corps that allows income and losses passed on to shareholders to be excluded).
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S Corporations, often known as S Corps, are a type of business organization that combines the liability defense of a corporation with the tax advantages of a partnership. S Corps are subject to state and federal taxes in Louisiana, however the state has different tax regulations from other states. We’ll address some frequently asked inquiries about S Corp taxation in Louisiana in this article.

Is the Louisiana franchise tax applicable to S corporations?

Yes, Louisiana’s franchise tax is applicable to S Corporations there. The franchise tax, which is based on a corporation’s net value or capital stock, is a tax on the right to conduct business in Louisiana. With a minimum tax of $10, the current tax rate is $1.50 per $1,000 of net worth or capital stock. The tax is payable by May 1st each year and is due.

Therefore, do S corporations exist in Louisiana?

S Corporations are a legal company structure in Louisiana, so the answer is yes. Because they provide liability protection and pass-through taxation, which means that the business’s income is transferred through to the owners’ personal income tax returns, S Corps are well-liked by small business owners. The company must fulfill the IRS’s eligibility standards and submit Form 2553 to the IRS in order to be eligible to operate as a S Corp in Louisiana.

In Louisiana, How Do I Form a S Corp?

You must first create a corporation by submitting articles of incorporation to the Louisiana Secretary of State’s office in order to create a S Corp in Louisiana. You can choose S Corp status after the corporation is incorporated by submitting Form 2553 to the IRS. The company must submit an annual report to the Secretary of State’s office and pay the franchise tax in order to keep its S Corp status in Louisiana. Is There a Corporate Income Tax in Louisiana?

Although Louisiana does have a corporate income tax, its tax regulations are distinct from those in other states. There is a corporate franchise tax in addition to the state’s 4% corporate income tax, as was already mentioned. Additionally, Louisiana offers a number of tax advantages and credits for companies that meet the necessary requirements, including the Industrial Tax Exemption Program and the Louisiana Enterprise Zone Program.

In conclusion, Louisiana S Corporations are liable to both state and federal taxes, including the corporate income tax and franchise tax. You must first create a corporation before choosing S Corp status with the IRS in order to create a S Corp in Louisiana. For firms that meet specific requirements, Louisiana additionally provides tax credits and incentives. To ensure compliance with both state and federal tax regulations, it’s crucial to speak with a tax expert if you’re thinking of incorporating a S Corp in Louisiana.