HLS 13RS-1543 ORIGINAL
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Regular Session, 2013
HOUSE BILL NO. 697
BY REPRESENTATIVE JAMES
TAX/INCOME TAX: Provides for the net operating loss deduction and the tax credit for
inventory taxes paid
AN ACT1
To amend and reenact R.S. 47:287.86 and 6006(D)(5), relative to income tax; to provide for2
the amount of the tax credit for local inventory taxes paid; to provide with respect3
to the net operating loss deduction; to provide for effectiveness; and to provide for4
related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:287.86 and 6006(D)(5) are hereby amended and reenacted to read7
as follows: 8
§287.86. Net operating loss deduction9
A. Deduction from Louisiana net income. Except as otherwise provided,10
there shall be allowed for the taxable year an adjustment reducing Louisiana net11
income in an amount equal to the aggregate of:12
(1) The net operating loss carryovers to such year , plus13
(2) The net operating loss carrybacks to such year. 14
B. Net operating loss carrybacks and carryovers. The taxable years to which15
a Louisiana net loss may be carried shall be :16
(1) A net operating loss carryback to each of the three taxable years17
preceding the taxable year of such loss, unless carryback treatment is relinquished18
pursuant to R.S. 47:287.86(D).19 HLS 13RS-1543 ORIGINAL
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(2) For for losses incurred for taxable years beginning before January 1984,1
a net operating loss carryover to each of the five taxable years following the taxable2
year of such loss. For losses incurred for taxable years beginning on or after January3
1, 1984, a net operating loss carryover to each of the fifteen taxable years following4
the taxable year of such loss.5
C. Manner and amount of carrybacks and carryovers. The entire amount of6
Louisiana net loss for any taxable year, hereinafter the "loss year", shall be carried7
back to the earliest of the taxable years allowed, unless an election to relinquish8
carryback treatment is made, in which case such loss shall be carried to the earliest9
of the taxable years allowed for carryovers. The portion of such loss which shall be10
carried to each of the other taxable years allowed by Subsection B shall be the11
excess, if any, of the amount of such loss over the aggregate of the Louisiana taxable12
income for each of the prior taxable years to which such loss may be carried. For the13
purposes of this Subsection:14
(1) Louisiana taxable income shall not be adjusted to less than zero.15
(2) In calculating the aggregate Louisiana taxable incomes in cases where16
more than one loss year must be taken into account, the various net operating loss17
carryovers and carrybacks to such taxable year are considered to be applied in18
reduction of Louisiana net income in the order of the taxable years from which such19
losses are carried over or carried back, beginning with the loss for the earliest taxable20
year.21
D. Election to relinquish carryback. Any taxpayer may make an election to22
relinquish the carryback treatment allowed and have its Louisiana net loss treated23
only as a carryover. Such election shall be made as prescribed by the secretary.24
E. Statement with tax return. Every corporation claiming a net operating25
loss deduction for any taxable year shall file with its return for such year a concise26
statement setting forth the amount of the net operating loss claimed and all material27
and pertinent facts relative thereto, including a detailed schedule showing the28
computation of the net operating loss deduction.29 HLS 13RS-1543 ORIGINAL
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F. Adjustment dependent upon Louisiana net loss carryback. If in computing1
the net operating loss deduction the taxpayer is entitled to a carryback which cannot2
be ascertained at the time the return is due, the deduction, if any, shall be computed3
without regard to such carryback. When the taxpayer ascertains the correct amount4
of such carryback, a claim for credit or refund of the overpayment, if any, resulting5
from the failure to compute the deduction for the taxable year with the inclusion of6
such carryback may be filed within the prescriptive period, or the taxpayer may file7
an application for a tentative refund as provided in Subsection G.8
G. Tentative refund. A taxpayer may request a tentative refund resulting9
from the application of a net operating loss carryback in the manner and with forms10
prescribed by the secretary. If the tentative refund is paid, the secretary may recover11
any amount thereof determined not to be an overpayment through any collection12
remedy authorized by R.S. 47:1561 within two years from December thirty-first of13
the year in which the refund was paid. Any tentatively refunded amount determined14
not to be an overpayment shall bear interest at the rate provided in R.S. 47:1601,15
which shall be computed from the date the tentative refund was issued to the date16
payment is received by the secretary.17
H. Interest on refunds. Any amount actually refunded as an overpayment18
resulting from the application of a net operating loss carryback, tentative or19
otherwise, shall bear interest at the rate provided in R.S. 47:1624, which shall be20
computed:21
(1) From the latest of the following dates:22
(a) Ninety days after the date the request for tentative refund or claim for23
refund (amended return) is filed.24
(b) Ninety days after the due date of the loss year return without regard to25
extensions of time to file.26
(2) To the date such refund is issued by the secretary.27
I. E. Net operating loss carryovers.28 HLS 13RS-1543 ORIGINAL
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(1) Notwithstanding any other provisions of this Chapter to the contrary, the1
acquiring corporation shall succeed to and take into account, as of the close of the2
day of distribution or transfer, the aggregate net operating loss carryovers of the3
distributors or transferor corporation as determined under this Section, subject to4
federal law and the limitations provided thereunder.5
(2) Net operating losses generated after the effective date of a reorganization6
cannot be carried back to a corporation that does not survive the reorganization,7
unless the reorganization is a reorganization under Internal Revenue Code Section8
368(a)(1)(F). For purposes of this Part, the surviving entity of a reorganization under9
Internal Revenue Code Section 368(a)(1)(F) is the same entity as the transferor10
entity, and the reorganization will be treated as a mere change in form.11
* * *12
§6006. Tax credits for local inventory taxes paid13
* * *14
D. The credit provided in this Section shall be allowed as follows:15
* * *16
(5) For inventory taxes paid to political subdivisions on or after July 1, 1996,17
the credit shall be one hundred seventy-five percent of such taxes paid.18
Section 2. This Act shall become effective on January 1, 2014.19
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)]
James HB No. 697
Abstract: Removes carryback provisions for the net operating loss deduction and reduces
the tax credit for local inventory taxes paid
Present law authorizes net operating losses to be either carried back over five years or
carried forward over 15 years as a deduction from state income tax.
Proposed law repeals provisions authorizing the carryback of net operating losses.
Present law authorizes a state income tax credit equal to the amount of local property taxes
paid on business inventories. HLS 13RS-1543 ORIGINAL
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Proposed law reduces the amount of the tax credit to 75% of the amount of local property
taxes paid.
Effective Jan. 1, 2014.
(Amends R.S. 47:287.86 and 6006(D)(5))