Pursuant to Act 661 of the 2016 Regular Session of the Louisiana Legislature, La. Rev. Stat. Ann. § 47:1675(H)(1)(e) now requires taxpayers to perform only one of two actions on or before the due date of the return (without regard to the granting of any extension), to claim a transferable tax credit on a Louisiana tax return:
- Purchase tax credits with an effective date of transfer on or before the due date of the return, without regard to the granting of any extension; or
- Execute Form R-6111, which evidences a binding agreement to transfer a tax credit, on or before the due date of the return, without regard to the granting of any extension.
Prior to the enactment of Act 661, taxpayers were required to purchase tax credits with an effective date of transfer on or before the due date of the return, without regard to the granting of any extension, and did not have the option to execute a binding agreement to transfer the credits before the due date of the return, without regard to the granting of any extension. The “effective date of transfer” is defined as the date of transfer as reflected in the Tax Credit Registry pursuant to La. Rev. Stat. Ann. § 47:1524. Additionally, the binding agreement on Form R-6111 does not require details for the specific project from which the credit shall be generated, the specific type of transferable credit, nor the exact amount of credit to be transferred.
Under the new law amendment, failure to subsequently transfer credits within the terms of the binding agreement under option two will result in the assessment of penalties and interest from the due date of the return, without regard to the granting of any extension. Failure to perform either of one of the two permissible actions on or before the due date of the return, without regard to the granting of any extension, will result in the credit being disallowed in its entirety as a claim on the return. A tax credit with an effective date of transfer or an executed transfer agreement entered into after the due date of the return shall be applied only to allowable tax, penalty, and interest that has accrued from the due date of the return, without regard to granting of any extension, and shall not be claimed as a credit on the tax return.
The provisions of Act 661 are effective March 10, 2016 and are applicable to income tax periods beginning on or after January 1, 2016 and for corporation franchise tax periods beginning on or after January 1, 2017.
TECHNICAL INFORMATION CONTACT:
Robin Sigur
Director
Ryan
713.629.0090
robin.sigur@ryan.com