HLS 15RS-404 ORIGINAL
2015 Regular Session
HOUSE BILL NO. 530
BY REPRESENTATIVE STOKES
TAX/CORP INCOME: Limits the net operating loss deduction associated with income tax
1 AN ACT
2To amend and reenact R.S. 47:181(B)(2), 246(E) and (G), 287.86, 1621(B)(7), and 1623(C),
3 (D), and (E)(introductory paragraph), and to enact R.S. 47:181(B)(3), relative to
4 corporate income tax; to provide for the net operating loss deduction; to eliminate
5 net operating loss deduction carryback; to increase net operating loss deduction
6 carryforward; 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. 47:181(B)(2), 246(E) and (G), 287.86, 1621(B)(7), and 1623(C), (D),
9and (E)(introductory paragraph) are hereby amended and reenacted and R.S. 47:181(B)(3)
10is hereby enacted to read as follows:
11 §181. Imposition of tax on estates and trusts
12 * * *
13 B. Computation and payment.
14 * * *
15 (2) The amount of a net operating loss for any tax year beginning on or after
16 January 1, 1992 and before January 1, 2000, may be deducted from net income in
17 any of the fifteen years immediately following the year in which the loss occurred.
18 (3) The amount of a net operating loss for any tax year beginning on or after
19 January 1, 2000, may be deducted from net income in any of the twenty years
20 immediately following the year in which the loss occurred.
21 * * *
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HB NO. 530
1 §246. Corporations; deduction from net income from Louisiana sources
2 * * *
3 E. At For losses incurred for taxable years prior to January 1, 2015, at the
4 election of the taxpayer, a net operating loss deduction as determined in Subsection
5 B of this Section, may be a net operating loss carry-back carryback to each of the
6 three taxable years preceding the taxable year of such loss. Such election shall be
7 made in accordance with rules and regulations prescribed by the Secretary of
8 Revenue and Taxation. The first period to which a net operating loss may be carried
9 under this provision is taxable years beginning on or after January 1, 1980.
10 * * *
11 G. Any For losses incurred for taxable years prior to January 1, 2015, any
12 amount actually refunded, tentative or otherwise, as an overpayment resulting from
13 a net operating loss carry-back carryback shall bear interest at the rate provided in
14 R.S. 47:1624 computed ninety days after the date the request for tentative refund or
15 claim for refund (amended return) is filed, or from ninety days after the due date,
16 without regard to extensions of time, to file of the loss year return, whichever is later.
17 * * *
18 §287.86. Net operating loss deduction
19 A. Deduction from Louisiana net income. Except as otherwise provided, for
20 losses incurred for taxable years beginning on or after January 1, 2015, there shall
21 be allowed for the taxable year an adjustment reducing Louisiana net income in an
22 amount equal to the aggregate of:
23 (1) The net operating loss carryovers to such year, plus.
24 (2) The net operating loss carrybacks to such year.
25 B. Net operating loss carrybacks and carryovers. The taxable years to which
26 a Louisiana net loss may be carried shall be:
27 (1) A For losses incurred for taxable years beginning on or after January 1,
28 1984, and before January 1, 2015, net operating loss carryback to each of the three
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HB NO. 530
1 taxable years preceding the taxable year of such loss, unless carryback treatment is
2 relinquished pursuant to R.S. 47:287.86(D).
3 (2) For losses incurred for taxable years beginning before January 1, 1984,
4 a net operating loss carryover to each of the five taxable years following the taxable
5 year of such loss.
6 (3) For losses incurred for taxable years beginning on or after January 1, 1984
7 and before January 1, 2000, a net operating loss carryover to each of the fifteen
8 taxable years following the taxable year of such loss.
9 (4) For losses incurred for taxable years beginning on or after January 1,
10 2000, a net operating loss carryover to each of the twenty taxable years following the
11 taxable year of such loss.
12 C. Manner and amount of carrybacks and carryovers. The entire amount of
13 Louisiana net loss for any taxable year, hereinafter the "loss year", shall be carried
14 back over to the earliest of the taxable years allowed, unless an election to relinquish
15 carryback treatment is made, in which case such loss shall be carried to the earliest
16 of the taxable years allowed for carryovers. The portion of such loss which shall be
17 carried to each of the other taxable years allowed by Subsection B shall be the
18 excess, if any, of the amount of such loss over the aggregate of the Louisiana taxable
19 income for each of the prior taxable years to which such loss may be carried. For the
20 purposes of this Subsection:
21 (1) Louisiana taxable income shall not be adjusted to less than zero.
22 (2) In calculating the aggregate Louisiana taxable incomes in cases where
23 more than one loss year must be taken into account, the various net operating loss
24 carryovers and carrybacks to such taxable year are considered to be applied in
25 reduction of Louisiana net income in the order of the taxable years from which such
26 losses are carried over or carried back, beginning with the loss for the earliest taxable
27 year.
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1 D. Election to relinquish carryback. Any taxpayer may make an election to
2 relinquish the carryback treatment allowed and have its Louisiana net loss treated
3 only as a carryover. Such election shall be made as prescribed by the secretary.
4 E.D. Statement with tax return. Every corporation claiming a net operating
5 loss deduction for any taxable year shall file with its return for such year a concise
6 statement setting forth the amount of the net operating loss claimed and all material
7 and pertinent facts relative thereto, including a detailed schedule showing the
8 computation of the net operating loss deduction.
9 F. Adjustment dependent upon Louisiana net loss carryback. If in computing
10 the net operating loss deduction the taxpayer is entitled to a carryback which cannot
11 be ascertained at the time the return is due, the deduction, if any, shall be computed
12 without regard to such carryback. When the taxpayer ascertains the correct amount
13 of such carryback, a claim for credit or refund of the overpayment, if any, resulting
14 from the failure to compute the deduction for the taxable year with the inclusion of
15 such carryback may be filed within the prescriptive period, or the taxpayer may file
16 an application for a tentative refund as provided in Subsection G.
17 G. Tentative refund. A taxpayer may request a tentative refund resulting
18 from the application of a net operating loss carryback in the manner and with forms
19 prescribed by the secretary. If the tentative refund is paid, the secretary may recover
20 any amount thereof determined not to be an overpayment through any collection
21 remedy authorized by R.S. 47:1561 within two years from December thirty-first of
22 the year in which the refund was paid. Any tentatively refunded amount determined
23 not to be an overpayment shall bear interest at the rate provided in R.S. 47:1601,
24 which shall be computed from the date the tentative refund was issued to the date
25 payment is received by the secretary.
26 H. Interest on refunds. Any amount actually refunded as an overpayment
27 resulting from the application of a net operating loss carryback, tentative or
28 otherwise, shall bear interest at the rate provided in R.S. 47:1624, which shall be
29 computed:
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1 (1) From the latest of the following dates:
2 (a) Ninety days after the date the request for tentative refund or claim for
3 refund (amended return) is filed.
4 (b) Ninety days after the due date of the loss year return without regard to
5 extensions of time to file.
6 (2) To the date such refund is issued by the secretary.
7 I. E. Net operating loss carryovers.
8 (1) Notwithstanding any other provisions of this Chapter to the contrary, the
9 acquiring corporation shall succeed to and take into account, as of the close of the
10 day of distribution or transfer, the aggregate net operating loss carryovers of the
11 distributors or transferor corporation as determined under this Section, subject to
12 federal law and the limitations provided thereunder.
13 (2) Net operating losses generated after the effective date of a reorganization
14 cannot be carried back to a corporation that does not survive the reorganization,
15 unless the reorganization is a reorganization under Internal Revenue Code Section
16 368(a)(1)(F). For purposes of this Part, the surviving entity of a reorganization under
17 Internal Revenue Code Section 368(a)(1)(F) is the same entity as the transferor
18 entity, and the reorganization will be treated as a mere change in form.
19 * * *
20 §1621. Refunds of overpayments authorized
21 * * *
22 B. The secretary shall make a refund of each overpayment where it is
23 determined that:
24 * * *
25 (7) With regard to a Louisiana income tax overpayment, the overpayment
26 resulted from application of a Louisiana net operating loss carryback or carryover.
27 * * *
28 §1623. Prescription of refunds or credits
29 * * *
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1 C. Provided that in any case where a refund relates to an overpayment
2 attributable to a net operating loss deduction carry-back election made pursuant to
3 R.S. 47:246(E) or 287.86, for taxable periods ending on or after December 31, 1983,
4 in lieu of the three-year period of limitation prescribed in Subsection A of this
5 Section, the period shall be the period which ends three years from the thirty-first
6 day of December of the year in which the tax for the loss year would become due or
7 the period prescribed in Subsection B or E of this Section with respect to such
8 taxable year, whichever expires later.
9 D. Provided that in any case where a refund of taxes imposed by R.S. 47:295
10 relates to an overpayment attributable to a net operating loss deduction carry-back
11 election, in lieu of the three-year period of limitation prescribed in Subsection A of
12 this Section, the period shall be the period which ends three years from the
13 thirty-first day of December of the year in which the tax for the loss year would
14 become due, or the period prescribed in Subsection B or E of this Section with
15 respect to such taxable year, whichever expires later. The provisions of this
16 Subsection would be effective for net operating loss deduction carry-back elections
17 made for taxable periods ending on or after December 31, 1987.
18 E. C. Provided that where a refund or credit relates to an overpayment of
19 income tax, the running of prescription shall be suspended by means of:
20 * * *
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 530 Original 2015 Regular Session Stokes
Abstract: Eliminates the three year carryback of the net operating loss deduction for
purposes of calculating corporate income tax liability and increases the carryover
period from 15 years to 20 years.
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.
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HB NO. 530
Proposed law retains present law but changes the time allowed for carryover of the net
operating loss from 15 years to 20 years.
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 and increases the
carry over period from 15 years to 20 years.
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. 47:181(B)(2), 246(E) and (G), 287.86, 1621(B)(7), and 1623(C), (D), and
(E)(intro. para.); Adds R.S. 47:181(B)(3))
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