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ACT No. 381
Regular Session, 2011
HOUSE BILL NO. 632
BY REPRESENTATIVE HENRY
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
conducts its principal business and thereby benefits from public facilities provided21
by that state. The location of board of directors' meetings is not presumed to create22
a commercial domicile at that location.23 ENROLLEDHB NO. 632
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(c) "Customer" shall mean a business or party, such as an advertiser or1
licensee, that has a contract or agreement directly with the taxpayer under which2
revenue is derived by such taxpayer.3
(d) "Film" or "film programming" means all performances, events, or4
productions intended to be broadcast for visual perception, including but not limited5
to news, sporting events, plays, stories, or other literary, commercial, educational,6
or artistic works. Each episode of a series of films shall constitute a separate "film"7
even if the series relates to the same principal subject.8
(c) (e) "Radio" or "radio programming" means all performances, events, or9
productions intended to be broadcast for auditory perception, including but not10
limited to news, sporting events, plays, stories, or other literary, commercial,11
educational, or artistic works. Each episode of a series of radio programming shall12
constitute a separate "radio programming" even if the series relates to the same13
principal subject.14
(d) (f) "Subscriber" means the individual residence or other outlet that is the15
ultimate recipient of the transmission.16
(2) Gross apportionable income, including license fees, from broadcasting17
film or radio programming, whether through the public airwaves, by cable, direct or18
indirect satellite transmission, or any other means of communication, either through19
a network, including owned and affiliated stations, or through an affiliated,20
unaffiliated, or independent television or radio broadcasting station, shall be21
attributed to this state as follows:22
(a) For Except as otherwise provided by this Subsection, for purposes of23
computing the apportionment percents provided by Subsections A through F of this24
Section, the amount of gross apportionable income, including advertising income,25
attributed to this state from broadcasting film or radio programming shall be26
determined by multiplying the total gross apportionable income from broadcasting27
film or radio programming, including advertising revenue, by the audience factor.28
(b) Except as otherwise provided by this Subsection For purposes of29
attributing the gross apportionable income earned by a local television or radio30 ENROLLEDHB NO. 632
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station, the audience factor shall be determined by the ratio of the taxpayer's1
Louisiana viewing or listening audience to their total viewing or listening audience.2
The audience factor shall be determined based on the books and records of the3
taxpayer or on published rating statistics. However, the method used to determine the4
audience factor must be used consistently from year to year and must fairly represent5
the taxpayer's activity in Louisiana.6
(c)(i) When broadcasting is through or by For purposes of attributing the7
gross apportionable income earned by a cable television system , satellite television8
system, or other arrangement system, hereinafter referred to collectively in this9
Paragraph as "cable or satellite system", under which ultimate viewers or listeners10
must pay the cable or satellite system for the right to receive the broadcast, the11
audience factor shall be the ratio that the subscribers for that cable television system12
or other arrangement cable or satellite system located in Louisiana bears to the total13
subscribers of that cable television system or other arrangement cable or satellite14
system if the payment entitles the ultimate viewers or listeners to continuous15
reception of programming during a subscription period.16
(ii) If the number of subscribers cannot be accurately determined from the17
taxpayer's books and records, the audience factor shall be determined based on the18
applicable year's subscription statistics located in published surveys. However, the19
source selected to determine the audience factor must be consistently used from year20
to year and must fairly represent the taxpayer's activity in Louisiana.21
(iii) If the payment entitles the ultimate viewers or listeners to only discrete22
episodes or instances of film or radio programming, the audience factor shall be the23
ratio of the subscribers for such discrete programming located in Louisiana to the24
total subscribers for such discrete programming. If the number of subscribers for25
such discrete episodes or instances cannot be accurately determined from the26
taxpayer's books and records, the audience factor shall be determined based on27
statistics located in published surveys. However, the source selected to determine28
the audience factor must be consistently used from year to year and must fairly29
represent the taxpayer's activity in Louisiana.30 ENROLLEDHB NO. 632
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(d)(i) For purposes of computing the apportionment percent provided in1
Subsections A through F of this Section, the amount of gross apportionable income2
attributed to this state from all other film and radio broadcasting shall be determined3
by multiplying the total gross apportionable income from such film and radio4
broadcasting by the ratio of income received from Louisiana customers to income5
received from customers everywher e; however, the gross apportionable income6
attributable to the state using this ratio shall not be less than twenty-five percent of7
the amount which would be attributable if calculated using an audience factor as8
defined in Subparagraph (b) of this Paragraph.9
(ii) For purposes of this Subparagraph, gross apportionable income includes10
advertising income and income from cable or satellite systems and local television11
and radio stations. "Louisiana customers" includes cable or satellite systems, local12
television and radio stations, and advertisers with a commercial domicile in the state13
and a contract or agreement directly with the taxpayer under which revenue is14
derived by such taxpayer. Notwithstanding the provisions of Subparagraph (1)(b)15
of this Subsection, if the taxpayer's customer is a television or radio station operating16
in Louisiana, then the commercial domicile of the customer is deemed to be17
Louisiana. This provision shall have no impact on the tax filing position of the18
customer.19
* * *20
§606. Allocation of taxable capital21
A. General allocation formula.22
For the purpose of ascertaining the tax imposed in this Chapter, every23
corporation subject to the tax is deemed to have employed in this state the proportion24
of its taxable capital, computed on the basis of the ratio obtained by taking the25
arithmetical average of the following ratios:26
(1) 27
* * *28
(e) Revenue, including license fees, from broadcasting film or radio29
programming, whether through the public airwaves, by cable, direct or indirect30 ENROLLEDHB NO. 632
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satellite transmission, or any other means of communication, either through a1
network, including owned and affiliated stations, or through an affiliated,2
unaffiliated, or independent television or radio broadcasting station, shall be3
attributed to the state as follows:4
(i) The Except as otherwise provided in this Subsection, the revenue,5
including advertising revenue attributed to the state from broadcasting film or radio6
programming, shall be determined by multiplying total revenue from broadcasting7
film or radio programming, including advertising revenue, by the audience factor.8
(ii) Except as otherwise provided by this Subsection For purposes of revenue9
attributed to the state from a local television or radio station broadcasting film or10
radio programming, the audience factor shall be determined by the ratio of the11
taxpayer's Louisiana viewing or listening audience to their total viewing or listening12
audience. The audience factor shall be determined based on the books and records13
of the taxpayer or published rating statistics. However, the method used to determine14
the audience factor must be used consistently from year to year and must fairly15
represent the taxpayer's activity in Louisiana.16
(iii) When broadcasting is through or by For purposes of revenue attributed17
to the state from a cable television system, satellite television system, or other18
arrangement system broadcasting film or radio programming, hereinafter referred to19
collectively in this Subparagraph as "cable or satellite system" under which ultimate20
viewers or listeners must pay the cable or satellite system for the right to receive the21
broadcast, the audience factor shall be the ratio that the subscribers for that cable22
television system or other arrangement cable or satellite system located in Louisiana23
bears to the total subscribers of that cable television system or other arrangement24
cable or satellite system if the payment entitles the ultimate viewers or listeners to25
continuous reception of programming during a subscription period.26
(aa) If the number of subscribers cannot be accurately determined from the27
taxpayer's books and records, the audience factor shall be determined based on the28
applicable year's subscription statistics located in published surveys. However, the29 ENROLLEDHB NO. 632
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source selected to determine the audience factor must be consistently used from year1
to year and must fairly represent the taxpayer's activity in Louisiana.2
(bb) If the payment entitles the ultimate viewers or listeners to only discrete3
episodes or instances of film or radio programming, the audience factor shall be the4
ratio that the subscribers for such discrete programming located in Louisiana bears5
to the total subscribers for such discrete programming. If the number of subscribers6
for such discrete episodes or instances cannot be accurately determined from the7
books and records maintained by the taxpayer, the audience factor shall be8
determined on the basis of statistics located in published surveys. However, the9
source selected to determine the audience factor must be consistently used from year10
to year for that purpose and must fairly represent the taxpayer's activity in Louisiana.11
(iv)(aa) The amount of revenue attributed to this state from all other film and12
radio broadcasting shall be determined by multiplying the total revenue from such13
film and radio broadcasting by the ratio of revenue received from Louisiana14
customers to revenue received from customers everywhere; however, such revenue15
attributable to the state using this ratio shall not be less than twenty-five percent of16
the amount which would be attributable if calculated using an audience factor as17
defined in Item (ii) of this Subparagraph.18
(bb) For purposes of this Subparagraph, revenue includes advertising19
revenue and revenue from cable or satellite systems and local television and radio20
stations. Louisiana customers are cable or satellite systems, local television and21
radio stations, and advertisers with a commercial domicile in the state and a contract22
or agreement directly with the taxpayer under which revenue is derived by the23
taxpayer. Notwithstanding the provisions of Subitem (bb) of Item (v) of this24
Subparagraph, if the taxpayer's customer is a television or radio station operating in25
Louisiana, then the commercial domicile of the customer is deemed to be Louisiana.26
This provision shall have no impact on the tax filing position of the customer. 27
(v) Definitions. For the purposes of this Subsection, the following terms28
have the following meanings unless the context clearly indicates otherwise:29 ENROLLEDHB NO. 632
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(aa) "Broadcast" means transmission by an electronic or other signal1
conducted by radio waves or microwaves or by wires, lines, coaxial cables, wave2
guides, fiber optics, satellite transmissions, directly or indirectly to viewers and3
listeners, or by any other means of communications.4
(bb) "Commercial domicile" shall mean the state where management5
decisions are implemented, which is presumed to be the state where the taxpayer6
conducts its principal business and thereby benefits from public facilities provided7
by that state. The location of board of directors' meetings is not presumed to create8
a commercial domicile at that location.9
(cc) "Customer" shall mean a business or party, such as an advertiser or10
licensee, that has a contract or agreement directly with the taxpayer under which11
revenue is derived by such taxpayer.12
(dd) "Film" or "film programming" means all performances, events, or13
productions intended to be broadcast for visual perception, including but not limited14
to news, sporting events, plays, stories, or other literary, commercial, educational,15
or artistic works. Each episode of a series of films shall constitute a separate "film"16
even if the series relates to the same principal subject.17
(cc) (ee) "Radio" or "radio programming" means all performances, events,18
or productions intended to be broadcast for auditory perception, including but not19
limited to news, sporting events, plays, stories, or other literary, commercial,20
educational, or artistic works. Each episode of a series of radio programming shall21
constitute a separate "radio programming" even if the series relates to the same22
principal subject.23
(dd) (ff) "Subscriber" means the individual residence or other outlet that is24
the ultimate recipient of the transmission.25
* * *26
Section 2. The provisions of this Act are severable. It is intended that if any27
provision of this Act, or the application thereof to any person or circumstance is held invalid28
under the Constitution of Louisiana or of the United States by a final and nonappealable29 ENROLLEDHB NO. 632
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judgment, then such provision shall be ineffective to the extent of such invalidity without1
invalidating the remaining provisions of this Act.2
Section 3. The provisions of this Act shall be applicable for all corporate income tax3
periods beginning on or after January 1, 2012, and for all corporation franchise tax periods4
beginning on or after January 1, 2013.5
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: