HLS 11RS-1049 ORIGINAL
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Regular Session, 2011
HOUSE BILL NO. 632
BY REPRESENTATIVE HENRY
TAX/TAXATION: Provides the method of calculating taxable income derived from
broadcasting film and radio programming which is attributable to activity in La.
AN ACT1
To amend and reenact R.S. 47:287.95(K) and 606(A)(1)(e), relative to corporation income2
and franchise tax; to provide for the method of determining certain taxable revenue3
from broadcasting film or radio programming which is attributable to activity in4
Louisiana; to provide for definitions; to provide for effectiveness; and to provide for5
related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 47:287.95(K) and 606(A)(1)(e) are hereby amended and reenacted8
to read as follows: 9
§287.95. Determination of Louisiana apportionment percent10
* * *11
K. Attribution of revenue from television, radio, and other broadcasting.12
(1) Definitions. For the purposes of this Subsection, the following terms13
have the following meanings unless the context clearly indicates otherwise:14
(a) "Broadcast" means transmission by an electronic or other signal15
conducted by radio waves or microwaves or by wires, lines, coaxial cables, wave16
guides, fiber optics, satellite transmissions directly or indirectly to viewers and17
listeners, or by any other means of communications.18
(b) "Commercial domicile" shall mean the state where management19
decisions are implemented, which is presumed to be the state where the taxpayer20 HLS 11RS-1049 ORIGINAL
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conducts its principal business and thereby benefits from public facilities provided1
by that state. The location of board of directors' meetings is not presumed to create2
a commercial domicile at that location.3
(c) "Customer" shall mean a business or party, such as an advertiser or4
licensee, that has a contract or agreement directly with the taxpayer under which5
revenue is derived by such taxpayer.6
(d) "Film" or "film programming" means all performances, events, or7
productions intended to be broadcast for visual perception, including but not limited8
to news, sporting events, plays, stories, or other literary, commercial, educational,9
or artistic works. Each episode of a series of films shall constitute a separate "film"10
even if the series relates to the same principal subject.11
(c) (e) "Radio" or "radio programming" means all performances, events, or12
productions intended to be broadcast for auditory perception, including but not13
limited to news, sporting events, plays, stories, or other literary, commercial,14
educational, or artistic works. Each episode of a series of radio programming shall15
constitute a separate "radio programming" even if the series relates to the same16
principal subject.17
(d) (f) "Subscriber" means the individual residence or other outlet that is the18
ultimate recipient of the transmission.19
(2) Gross apportionable income, including license fees, from broadcasting20
film or radio programming, whether through the public airwaves, by cable, direct or21
indirect satellite transmission, or any other means of communication, either through22
a network, including owned and affiliated stations, or through an affiliated,23
unaffiliated, or independent television or radio broadcasting station, shall be24
attributed to this state as follows:25
(a) For Except as otherwise provided by this Subsection, for purposes of26
computing the apportionment percents provided by Subsections A through F of this27
Section, the amount of gross apportionable income, including advertising income,28
attributed to this state from broadcasting film or radio programming shall be29 HLS 11RS-1049 ORIGINAL
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determined by multiplying the total gross apportionable income from broadcasting1
film or radio programming, including advertising revenue, by the audience factor.2
(b) Except as otherwise provided by this Subsection For purposes of3
attributing the gross apportionable income earned by a local television or radio4
station, the audience factor shall be determined by the ratio of the taxpayer's5
Louisiana viewing or listening audience to their total viewing or listening audience.6
The audience factor shall be determined based on the books and records of the7
taxpayer or on published rating statistics. However, the method used to determine the8
audience factor must be used consistently from year to year and must fairly represent9
the taxpayer's activity in Louisiana.10
(c)(i) When broadcasting is through or by For purposes of attributing the11
gross apportionable income earned by a cable television system, satellite television12
system or other arrangement system, hereinafter referred to collectively in this13
Paragraph as "cable or satellite system", under which ultimate viewers or listeners14
must pay the cable or satellite system for the right to receive the broadcast, the15
audience factor shall be the ratio that the subscribers for that cable television system16
or other arrangement cable or satellite system located in Louisiana bears to the total17
subscribers of that cable television system or other arrangement cable or satellite18
system if the payment entitles the ultimate viewers or listeners to continuous19
reception of programming during a subscription period.20
(ii) If the number of subscribers cannot be accurately determined from the21
taxpayer's books and records, the audience factor shall be determined based on the22
applicable year's subscription statistics located in published surveys. However, the23
source selected to determine the audience factor must be consistently used from year24
to year and must fairly represent the taxpayer's activity in Louisiana.25
(iii) If the payment entitles the ultimate viewers or listeners to only discrete26
episodes or instances of film or radio programming, the audience factor shall be the27
ratio of the subscribers for such discrete programming located in Louisiana to the28
total subscribers for such discrete programming. If the number of subscribers for29 HLS 11RS-1049 ORIGINAL
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such discrete episodes or instances cannot be accurately determined from the1
taxpayer's books and records, the audience factor shall be determined based on2
statistics located in published surveys. However, the source selected to determine3
the audience factor must be consistently used from year to year and must fairly4
represent the taxpayer's activity in Louisiana.5
(d)(i) For purposes of computing the apportionment percent provided in6
Subsections A through F of this Section, the amount of gross apportionable income7
attributed to this state from all other film and radio broadcasting shall be determined8
by multiplying the total gross apportionable income from such film and radio9
broadcasting by the ratio of income received from Louisiana customers to income10
received from customers everywhere; however, the gross apportionable income11
attributable to the state using this ratio shall not be less than seventy-five percent of12
the amount which would be attributable if calculated using an audience factor as13
defined in Subparagraph (b) of this Paragraph.14
(ii) For purposes of this Subparagraph, gross apportionable income includes15
advertising income and income from cable or satellite systems and local television16
and radio stations. Louisiana customers are cable or satellite systems, local17
television and radio stations, and advertisers with a commercial domicile in the state18
and a contract or agreement directly with the taxpayer under which revenue is19
derived by such taxpayer. Notwithstanding the provisions of Subparagraph (1)(b)20
of this Subsection, if the taxpayer's customer is a television or radio station operating21
in Louisiana, then the commercial domicile of the customer is deemed to be22
Louisiana. This provision shall have no impact on the tax filing position of the23
customer.24
* * *25
§606. Allocation of taxable capital26
A. General allocation formula.27
For the purpose of ascertaining the tax imposed in this Chapter, every28
corporation subject to the tax is deemed to have employed in this state the proportion29 HLS 11RS-1049 ORIGINAL
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of its taxable capital, computed on the basis of the ratio obtained by taking the1
arithmetical average of the following ratios:2
(1) 3
* * *4
(e) Revenue, including license fees, from broadcasting film or radio5
programming, whether through the public airwaves, by cable, direct or indirect6
satellite transmission, or any other means of communication, either through a7
network, including owned and affiliated stations, or through an affiliated,8
unaffiliated, or independent television or radio broadcasting station, shall be9
attributed to the state as follows:10
(i) The Except as otherwise provided in this Subsection, the revenue,11
including advertising revenue attributed to the state from broadcasting film or radio12
programming, shall be determined by multiplying total revenue from broadcasting13
film or radio programming, including advertising revenue, by the audience factor.14
(ii) Except as otherwise provided by this Subsection For purposes of revenue15
attributed to the state from a local television or radio station broadcasting film or16
radio programming, the audience factor shall be determined by the ratio of the17
taxpayer's Louisiana viewing or listening audience to their total viewing or listening18
audience. The audience factor shall be determined based on the books and records19
of the taxpayer or published rating statistics. However, the method used to determine20
the audience factor must be used consistently from year to year and must fairly21
represent the taxpayer's activity in Louisiana.22
(iii) When broadcasting is through or by For purposes of revenue attributed23
to the state from a cable television system, satellite television system, or other24
arrangement system broadcasting film or radio programming, hereinafter referred to25
collectively in this Subparagraph as "cable or satellite system" under which ultimate26
viewers or listeners must pay the cable or satellite system for the right to receive the27
broadcast, the audience factor shall be the ratio that the subscribers for that cable28
television system or other arrangement cable or satellite system located in Louisiana29 HLS 11RS-1049 ORIGINAL
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bears to the total subscribers of that cable television system or other arrangement1
cable or satellite system if the payment entitles the ultimate viewers or listeners to2
continuous reception of programming during a subscription period.3
(aa) If the number of subscribers cannot be accurately determined from the4
taxpayer's books and records, the audience factor shall be determined based on the5
applicable year's subscription statistics located in published surveys. However, the6
source selected to determine the audience factor must be consistently used from year7
to year and must fairly represent the taxpayer's activity in Louisiana.8
(bb) If the payment entitles the ultimate viewers or listeners to only discrete9
episodes or instances of film or radio programming, the audience factor shall be the10
ratio that the subscribers for such discrete programming located in Louisiana bears11
to the total subscribers for such discrete programming. If the number of subscribers12
for such discrete episodes or instances cannot be accurately determined from the13
books and records maintained by the taxpayer, the audience factor shall be14
determined on the basis of statistics located in published surveys. However, the15
source selected to determine the audience factor must be consistently used from year16
to year for that purpose and must fairly represent the taxpayer's activity in Louisiana.17
(iv)(aa) The amount of revenue attributed to this state from all other film and18
radio broadcasting shall be determined by multiplying the total revenue from such19
film and radio broadcasting by the ratio of revenue received from Louisiana20
customers to revenue received from customers everywhere; however, such revenue21
attributable to the state using this ratio shall not be less than seventy-five percent of22
the amount which would be attributable if calculated using an audience factor as23
defined in Item (ii) of this Subparagraph.24
(bb) For purposes of this Subparagraph, revenue includes advertising25
revenue and revenue from cable or satellite systems and local television and radio26
stations. Louisiana customers are cable or satellite systems, local television and27
radio stations, and advertisers with a commercial domicile in the state and a contract28
or agreement directly with the taxpayer under which revenue is derived by the29 HLS 11RS-1049 ORIGINAL
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taxpayer. Notwithstanding the provisions of Subitem (bb) of Item (v) of this1
Subparagraph, if the taxpayer's customer is a television or radio station broadcasting2
in Louisiana, then the commercial domicile of the customer is deemed to be3
Louisiana. This provision shall have no impact on the tax filing position of the4
customer. 5
(v) Definitions. For the purposes of this Subsection, the following terms6
have the following meanings unless the context clearly indicates otherwise:7
(aa) "Broadcast" means transmission by an electronic or other signal8
conducted by radio waves or microwaves or by wires, lines, coaxial cables, wave9
guides, fiber optics, satellite transmissions, directly or indirectly to viewers and10
listeners, or by any other means of communications.11
(bb) "Commercial domicile" shall mean the state where management12
decisions are implemented, which is presumed to be the state where the taxpayer13
conducts its principal business and thereby benefits from public facilities provided14
by that state. The location of board of directors' meetings is not presumed to create15
a commercial domicile at that location.16
(cc) "Customer" shall mean a business or party, such as an advertiser or17
licensee, that has a contract or agreement directly with the taxpayer under which18
revenue is derived by such taxpayer.19
(dd) "Film" or "film programming" means all performances, events, or20
productions intended to be broadcast for visual perception, including but not limited21
to news, sporting events, plays, stories, or other literary, commercial, educational,22
or artistic works. Each episode of a series of films shall constitute a separate "film"23
even if the series relates to the same principal subject.24
(cc) (ee) "Radio" or "radio programming" means all performances, events,25
or productions intended to be broadcast for auditory perception, including but not26
limited to news, sporting events, plays, stories, or other literary, commercial,27
educational, or artistic works. Each episode of a series of radio programming shall28 HLS 11RS-1049 ORIGINAL
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constitute a separate "radio programming" even if the series relates to the same1
principal subject.2
(dd) (ff) "Subscriber" means the individual residence or other outlet that is3
the ultimate recipient of the transmission.4
* * *5
Section 2. The provisions of this Act shall be applicable for all taxable periods6
beginning on or after January 1, 2012.7
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Henry HB No. 632
Abstract: Provides the method of calculating the amount of gross apportionable income
earned from broadcasting film and radio programming which is attributable to
activity in La. and subject to corporation income and franchise tax.
Present law establishes the methods for attributing income to Louisiana for purposes of
determining corporation income and franchise tax sales ratios of taxpayers who broadcast
film and radio programming.
Present law provides definitions for purposes of proposed law.
Proposed law adds definitions for "commercial domicile" and "customer".
Present law provides the calculation used to determine the amount of gross apportionable
income attributable to La. for a taxpayer broadcasting film or radio programming. The
amount shall be determined by multiplying the total gross apportionable income by an
audience factor, which is the ratio of the taxpayer's La. viewing or listening audience to the
total viewing or listening audience.
Present law provides specifically for the calculation used for income of a cable television
system or "other arrangement" under which viewers or listeners pay for the right to receive
the broadcast. The audience factor is the ratio of that system's subscribers located in La. to
the total subscribers of that system.
Proposed law retains present law and adds provisions specific to taxpayers which broadcast
film and radio programming, but are not local television or radio stations, cable television
systems, or satellite television systems, all of which are currently provided for in present
law.
Proposed law provides the calculation used for such "other" taxpayers to determine the
amount of gross apportionable income attributable to La. from broadcasting film or radio
programming. The amount shall be determined by multiplying the total gross apportionable
income by the ratio of income received from customers commercially domiciled in La. to
income received from customers everywhere. Further, the amount of gross apportionable
income attributable to La. resulting from use of the foregoing ratio shall not be less than 75% HLS 11RS-1049 ORIGINAL
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of the income that would be attributable to La. using the audience factor provided for in
present law.
Provisions of proposed law are applicable to taxable periods beginning on or after Jan. 1,
2012.
(Amends R.S. 47:287.95(K) and 606(A)(1)(e))