Does Louisiana Have S Corporations?

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Does Louisiana have S corporations?
An S corporation is a standard corporation operating in the state of Louisiana that has filed a form with the IRS to elect a different tax status than what applies to a C corporation. The election form for an S corporation can be filed as soon as the corporation has been formed or any time after forming the business.
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Louisiana is one of the states that permits the creation of S companies. An S corporation is a particular kind of corporation that is set up to prevent double taxation on its profits. An S corporation’s income is passed through to its shareholders, who then report it on their individual tax returns, as opposed to being taxed twice: once at the corporate level and once at the individual level.

How Is Louisiana Taxed on S Corporations?

S corporations are exempt from Louisiana’s state income tax. They must still submit a Louisiana Corporation Income and Franchise Tax Return each year (Form CIFT-620). The income, deductions, and credits of the S corporation are reported using this form.

It’s crucial to keep in mind that although while S corporations are exempt from Louisiana’s state income tax, they can still be liable to other state taxes, such the sales tax or the payroll tax.

In Louisiana, How Do I Form a S Corp?

You must first submit articles of incorporation to the Louisiana Secretary of State in order to establish a S corporation in Louisiana. You can choose S corporation status by completing Form 2553 with the IRS once your articles of incorporation have been approved.

You must register with the Louisiana Department of Revenue and receive any required licenses and permits for your business in addition to filing the required documentation.

How Does the Louisiana S Corp Exclusion Work?

Louisiana grants some small enterprises a S corporation exception. This deduction enables qualifying S firms to completely avoid paying Louisiana corporate income tax on their income.

The corporation’s annual gross receipts must be less than $50 million to qualify for the S corporation exclusion, and all of its shareholders must be natural persons, estates, or certain kinds of trusts. Who Is Affected by the Louisiana Franchise Tax?

All corporations in Louisiana, even S corporations, are liable for paying the state’s franchise tax. The franchise tax is based on the entire authorized capital stock of the corporation and is a levy on the right to conduct business in Louisiana.

For businesses with less than $300,000 in capital stock and more over $300,000 in capital stock, the franchise tax rate is $1.50 per $1,000 of capital stock and $3.00 per $1,000 of capital stock, respectively.

S corporations do exist in Louisiana, and they are exempt from state income taxes. They must still submit a Louisiana Corporation Income and Franchise Tax Return each year, though. You must submit articles of incorporation and choose S corporation status with the IRS in order to establish a S corporation in Louisiana. Additionally, Louisiana provides a S corporation exclusion for specific small firms. S corporations are nevertheless subject to the state’s franchise tax, as are all other corporations.

FAQ
How is an LLC taxed in Louisiana?

An LLC is taxed in Louisiana as a pass-through entity, which means that the company’s profits are not subject to corporate income taxes. Instead, the LLC’s gains and losses are distributed to each individual member, who then reports their portion of the revenue on their individual tax returns.