Louisiana Research and Development Tax Credit Summary

The Louisiana R&D Tax Credit defines Qualified Research Expenditures the same as the federal version but does have some differences. Below are some of the differences between the federal and Louisiana R&D Tax Credit:

  • Qualified research expenses must be incurred in Louisiana.
  • The tax credit was refundable from 2009 through June 30, 2015
  • Credit in excess of the tax liability is refundable for credits claimed on an original return filed after June 30, 2015 and has a carryforward of five (5) years.
  • Credits claimed prior to 2009 that cannot be utilized may be carried forward, transferred or sold.
  • Louisiana defines its base amount as 70% of the average prior three years of Qualified Research Expenditures
  • The credit amount is 40% for companies that employ up to 50 Louisiana residents
  • The credit amount is 20% for companies that employ 50-99 employee
  • The credit amount is 8% for companies with 100 or more employee
  • For taxpayers with less than 50 employees a Federal Form 6765 must be filed for the current tax year or a completed Agreed Upon Procedures Report
  • In order for the R&D Tax Credits to be awarded, a taxpayer must claim the expenditures within one year after December 31 in which the expenditures was incurred. For example: a business has a fiscal filing period of July 1, 2014 to June 30, 2015 and the business incurred qualifying research expenses in that time period. Then, the Research and Development application will be due no later than December 31, 2016.
  • Prior to claiming the R&D Tax Credits, a company must apply for and obtain a credit certification from the Department of Economic Development. The application requires a $250 fee.
  • Once the credits are authorized, a taxpayer must file an amended return

Louisiana R&D Tax Credit Case Study

A Louisiana Architectural firm with fewer than 50 employees had never before claimed the R&D credit. This project involved the tax year 2013. The Company qualified for the federal R&D credits of $37,164 and an additional refundable $109,527 in Louisiana state R&D Tax Credit. Summary of credits:

FEDERAL LOUISIANA
Year Total QREs Credit Total QREs Credit
2013 $653,173 $37,164 $653,164 $109,527

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