HLS 15RS-946 ORIGINAL
2015 Regular Session
HOUSE BILL NO. 395
BY REPRESENTATIVE JAY MORRIS
TAX/INCOME TAX: Eliminates the carryback provisions for the net operating loss
deduction for purposes of corporate income tax
1 AN ACT
2To amend and reenact R.S. 47:246(E) and (G), 287.86(A), (B)(1), (C), (D), (E), and (I),
3 1621(B)(7), and 1623(E)(introductory paragraph) and to repeal R.S. 47:287.86(F),
4 (G), and (H), and 1623(C) and (D), relative to corporate income tax; to provide for
5 the net operating loss deduction; to eliminate net operating loss deduction carryback;
6 to provide for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:246(E) and (G), 287.86(A), (B)(1), (C), (D), (E), and (I),
91621(B)(7), and 1623(E)(introductory paragraph) are hereby amended and reenacted to read
10as follows:
11 §246. Corporations; deduction from net income from Louisiana sources
12 * * *
13 E. At For losses incurred for taxable years prior to January 1, 2015, at the
14 election of the taxpayer, a net operating loss deduction as determined in Subsection
15 B of this Section, may be a net operating loss carry-back to each of the three taxable
16 years preceding the taxable year of such loss. Such election shall be made in
17 accordance with rules and regulations prescribed by the Secretary of Revenue and
18 Taxation. The first period to which a net operating loss may be carried under this
19 provision is taxable years beginning on or after January 1, 1980.
20 * * *
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HB NO. 395
1 G. Any For losses incurred for taxable years prior to January 1, 2015, any
2 amount actually refunded, tentative or otherwise, as an overpayment resulting from
3 a net operating loss carry-back shall bear interest at the rate provided in R.S. 47:1624
4 computed ninety days after the date the request for tentative refund or claim for
5 refund (amended return) is filed, or from ninety days after the due date, without
6 regard to extensions of time, to file of the loss year return, whichever is later.
7 * * *
8 §287.86. Net operating loss deduction
9 A. Deduction from Louisiana net income. Except as otherwise provided, for
10 losses incurred for taxable years beginning on or after January 1, 2015, there shall
11 be allowed for the taxable year an adjustment reducing Louisiana net income in an
12 amount equal to the aggregate of:
13 (1) The net operating loss carryovers to such year, plus.
14 (2) The net operating loss carrybacks to such year.
15 B. Net operating loss carrybacks and carryovers. The taxable years to which
16 a Louisiana net loss may be carried shall be:
17 (1) A For losses incurred for taxable years beginning on or after January 1,
18 1984, and before January 1, 2015, net operating loss carryback to each of the three
19 taxable years preceding the taxable year of such loss, unless carryback treatment is
20 relinquished pursuant to R.S. 47:287.86(D).
21 * * *
22 C. Manner and amount of carrybacks and carryovers. The entire amount of
23 Louisiana net loss for any taxable year, hereinafter the "loss year", shall be carried
24 back over to the earliest of the taxable years allowed, unless an election to relinquish
25 carryback treatment is made, in which case such loss shall be carried to the earliest
26 of the taxable years allowed for carryovers. The portion of such loss which shall be
27 carried to each of the other taxable years allowed by Subsection B shall be the
28 excess, if any, of the amount of such loss over the aggregate of the Louisiana taxable
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HB NO. 395
1 income for each of the prior taxable years to which such loss may be carried. For the
2 purposes of this Subsection:
3 (1) Louisiana taxable income shall not be adjusted to less than zero.
4 (2) In calculating the aggregate Louisiana taxable incomes in cases where
5 more than one loss year must be taken into account, the various net operating loss
6 carryovers and carrybacks to such taxable year are considered to be applied in
7 reduction of Louisiana net income in the order of the taxable years from which such
8 losses are carried over or carried back, beginning with the loss for the earliest taxable
9 year.
10 D. Election to relinquish carryback. Any taxpayer may make an election to
11 relinquish the carryback treatment allowed and have its Louisiana net loss treated
12 only as a carryover. Such election shall be made as prescribed by the secretary.
13 E. D. Statement with tax return. Every corporation claiming a net operating
14 loss deduction for any taxable year shall file with its return for such year a concise
15 statement setting forth the amount of the net operating loss claimed and all material
16 and pertinent facts relative thereto, including a detailed schedule showing the
17 computation of the net operating loss deduction.
18 * * *
19 I. E. Net operating loss carryovers.
20 (1) Notwithstanding any other provisions of this Chapter to the contrary, the
21 acquiring corporation shall succeed to and take into account, as of the close of the
22 day of distribution or transfer, the aggregate net operating loss carryovers of the
23 distributors or transferor corporation as determined under this Section, subject to
24 federal law and the limitations provided thereunder.
25 (2) Net operating losses generated after the effective date of a reorganization
26 cannot be carried back to a corporation that does not survive the reorganization,
27 unless the reorganization is a reorganization under Internal Revenue Code Section
28 368(a)(1)(F). For purposes of this Part, the surviving entity of a reorganization under
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HB NO. 395
1 Internal Revenue Code Section 368(a)(1)(F) is the same entity as the transferor
2 entity, and the reorganization will be treated as a mere change in form.
3 * * *
4 §1621. Refunds of overpayments authorized
5 * * *
6 B. The secretary shall make a refund of each overpayment where it is
7 determined that:
8 * * *
9 (7) With regard to a Louisiana income tax overpayment, the overpayment
10 resulted from application of a Louisiana net operating loss carryback or carryover.
11 * * *
12 §1623. Prescription of refunds or credits
13 * * *
14 E. C. Provided that where a refund or credit relates to an overpayment of
15 income tax, the running of prescription shall be suspended by means of:
16 * * *
17 Section 2. R.S. 47:287.86(F), (G), and (H) and 1623(C) and (D) are repealed in their
18entirety.
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)]
HB 395 Original 2015 Regular Session Jay Morris
Abstract: Eliminates the three year carryback of the net operating loss deduction for
purposes of calculating corporate income tax liability.
Present law provides for imposition, computation, and payment of income tax for estates and
property held in trust. Present law further authorizes the net operating loss to be deducted
from net income in any of the 15 years immediately following the year in which the loss
occurred.
Present law provides a deduction from Louisiana net income for a net operating loss to be
carried back three taxable years preceding the taxable year of such loss or carried over to
each of the 15 taxable years following the taxable year of such loss.
Proposed law repeals the three year carryback provisions of present law.
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HB NO. 395
Present law provides for refunds of overpayment of taxes, penalties, and interest. Further
authorizes a refund when La. tax overpayment results from application of a net operating
loss carryback.
Proposed law retains present law but repeals provisions relative to net operating loss carry
back.
Present law provides a three year prescriptive period within which a refund or credit shall
be paid and provides for suspension of the prescriptive period. Further provides a time table
for prescription when a refund or credit is attributable to net the operating loss deduction
carryback election.
Proposed law retains present law but repeals provisions relative to the net operating loss
deduction carryback election.
(Amends R.S. 47:246(E) and (G), 287.86(A), (B)(1), (C), (D), (E), and (I), 1621(B)(7), and
1623(E)(intro. para.); Repeals R.S. 47:287.86(F), (G), and (H) and 1623(C) and (D))
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