HLS 161ES-63 ORIGINAL
2016 First Extraordinary Session
HOUSE BILL NO. 58
BY REPRESENTATIVE JACKSON
TAX/CORP INCOME: Provides relative to the apportionment formula for computing
corporate income tax (Item #5)
1 AN ACT
2To amend and reenact R.S. 47:287.95(A), (C)(1)(a), (D), and (F)(1) and (2)(a) and (b),
3 relative to corporate income tax; to provide for the calculation of apportionment
4 income for certain businesses; to provide for the weighing of certain ratios in the
5 calculation of Louisiana apportionment percent; to provide for applicability; to
6 provide for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:287.95(A), (C)(1)(a), (D), and (F)(1) and (2)(a) and (b) are hereby
9amended and reenacted to read as follows:
10 ยง287.95. Determination of Louisiana apportionment percent
11 A.(1) Air transportation. The Louisiana apportionment percent of any
12 taxpayer whose net apportionable income is derived primarily from the business of
13 transportation by aircraft shall be the arithmetical average of two ratios, as follows:
14 (1)(a) The ratio of the value of immovable and corporeal movable property,
15 other than aircraft, owned by the taxpayer and located in Louisiana to the value of
16 all immovable and corporeal movable property, other than aircraft, owned by the
17 taxpayer and used in the production of apportionable income.
18 (2)(b) The ratio of the amount of gross apportionable income derived from
19 Louisiana sources to the total gross apportionable income of the taxpayer.
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1 (2) For the purposes of this Subsection, gross apportionable income from
2 Louisiana sources shall include all gross receipts derived from passenger journeys
3 and cargo shipments originating in Louisiana and any other items of gross
4 apportionable income or receipts derived entirely from sources in this state.
5 (3) For taxable periods beginning on or after January 1, 2016, for purposes
6 of this Subsection, the Louisiana apportionment percent of any taxpayer whose net
7 apportionable income is derived primarily from the business of transportation by
8 aircraft shall be computed by means of the ratios provided in Subparagraphs (1)(a)
9 and (1)(b) of this Subsection, except that the ratio of gross apportionable income as
10 provided in Subparagraph (1)(b) of this Subsection shall be double-weighted or
11 counted twice, and the Louisiana apportionment percent shall be the arithmetical
12 average of the three ratios.
13 * * *
14 C. Other transportation. (1)(a) The Louisiana apportionment percent of any
15 taxpayer whose net apportionable income is derived primarily from the business of
16 transportation, other than by aircraft or pipeline, shall be the arithmetical average of
17 two ratios, as follows:
18 (i) The ratio of the value of immovable and corporeal movable property
19 owned by the taxpayer and located in Louisiana to the value of all immovable and
20 corporeal movable property owned by the taxpayer and used in the production of
21 apportionable income.
22 (ii) The ratio of the amount of gross apportionable income from Louisiana
23 sources to the total amount of gross apportionable income of the taxpayer.
24 (iii) For taxable periods beginning on or after January 1, 2016, for purposes
25 of this Subsection, the Louisiana apportionment percent of any taxpayer whose net
26 apportionable income is derived primarily from the business of transportation, other
27 than by aircraft or pipeline, shall be computed by means of the ratios provided in
28 Items (i) and (ii) of this Subparagraph, except that the ratio of gross apportionable
29 income as provided in Item (ii) of this Subparagraph shall be double-weighted or
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1 counted twice, and the Louisiana apportionment percent shall be the arithmetical
2 average of the three ratios.
3 * * *
4 D.(1) Service enterprises. The Louisiana apportionment percent of any
5 taxpayer whose net apportionable income is derived primarily from a service
6 business in which the use of property is not a substantial income-producing factor
7 shall be the arithmetical average of two ratios, as follows:
8 (1)(a) The ratio of the amount paid by the taxpayer for salaries, wages, and
9 other compensation for personal services rendered in Louisiana to the total amount
10 paid by the taxpayer for salaries, wages, and other compensation for personal
11 services in connection with the production of the net apportionable income.
12 (2)(b) The ratio of the gross apportionable income of the taxpayer from
13 Louisiana sources to the total gross apportionable income of the taxpayer.
14 (c) For taxable periods beginning on or after January 1, 2016, for purposes
15 of this Subsection, the Louisiana apportionment percent of any taxpayer whose net
16 apportionable income is derived primarily from a service business in which the use
17 of property is not a substantial income-producing factor shall be computed by means
18 of the ratios provided in Subparagraphs (a) and (b) of this Paragraph, except that the
19 ratio of gross apportionable income as provided in Subparagraph (b) of this
20 Paragraph shall be double-weighted or counted twice, and the Louisiana
21 apportionment percent shall be the arithmetical average of the three ratios.
22 (2) For the purposes of this Subsection, the gross apportionable income from
23 Louisiana sources shall include the revenue from services performed in this state,
24 and any other gross income derived entirely from sources within this state.
25 * * *
26 F.(1) Manufacturing, merchandising, and other business. Except as provided
27 in this Subsection, the Louisiana apportionment percent of any taxpayer whose net
28 apportionable income is derived primarily from the business of transportation by
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1 pipeline or from any business not included in Subsections A through E of this
2 Section shall be the arithmetical average of three four ratios, as follows:
3 (a) The ratio of the value of the immovable and corporeal movable property
4 owned by the taxpayer and located in Louisiana to the value of all immovable and
5 corporeal movable property owned by the taxpayer and used in the production of the
6 net apportionable income.
7 (b) The ratio of the amount paid by the taxpayer for salaries, wages, and
8 other compensation for personal services rendered in this state to the total amount
9 paid by the taxpayer for salaries, wages, and other compensation for personal
10 services in connection with the production of net apportionable income.
11 (c) The double-weighted ratio of net sales made in the regular course of
12 business and other gross apportionable income attributable to this state to the total
13 net sales made in the regular course of business and other gross apportionable
14 income of the taxpayer.
15 (2)(a) For taxable periods beginning on or after January 1, 1997, and ending
16 on or before December 31, 2005, and for the purpose of this Subsection, the
17 Louisiana apportionment percent of any taxpayer whose net apportionable income
18 is derived primarily from the business of manufacturing or merchandising shall be
19 computed by means of the ratios provided in Subparagraphs (1)(a) through (c) of this
20 Subsection, except that the ratio of net sales as provided in Subparagraph (c) shall
21 be double-weighted or counted twice, and the Louisiana apportionment percent shall
22 be the arithmetical average of the four ratios.
23 (b) For taxable periods beginning on or after January 1, 2006, through
24 December 31, 2015, and for the purpose of this Subsection, the Louisiana
25 apportionment percent of any taxpayer whose net apportionable income is derived
26 primarily from the business of manufacturing or merchandising shall be computed
27 by means of a single ratio consisting of the ratio provided for in Subparagraph (1)(c)
28 of this Subsection.
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1 (b) For taxable periods beginning on or after January 1, 2016, for purposes
2 of this Subsection, the Louisiana apportionment percent of any taxpayer whose net
3 apportionable income is derived primarily from the business of manufacturing and
4 merchandising shall be computed by means of the ratios provided in Subparagraphs
5 (1)(a) through (c) of this Subsection, except that the ratio of net sales provided in
6 Subparagraph (1)(c) of this Subsection shall be double-weighted or counted twice,
7 and the Louisiana apportionment percent shall be the arithmetical average of the four
8 ratios.
9 * * *
10 Section 2. The provisions of this Act shall be applicable to all taxable periods
11beginning on and after January 1, 2016.
12 Section 3. This Act shall become effective upon signature by the governor or, if not
13signed by the governor, upon expiration of the time for bills to become law without signature
14by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
15vetoed by the governor and subsequently approved by the legislature, this Act shall become
16effective on the day following such approval.
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 58 Original 2016 First Extraordinary Session Jackson
Abstract: Changes the apportionment percent for apportionable income derived for certain
transportation, service, and manufacturing and merchandising industry sectors to a
ratio calculation that double-weighs certain income.
TRANSPORTATION BY AIRCRAF T
Present law provides that the La. apportionment percent of any taxpayer whose net
apportionable income is derived primarily from transportation by aircraft shall be calculated
from the average of following ratios:
(1)The ratio of the value of immovable and movable property, other than aircraft,
owned by the taxpayer located in La. to the value of all immovable and movable
property, other than aircraft, owned by the taxpayer used in the production of
apportionable income.
(2)The ratio of gross apportionable income derived from La. sources to the total gross
apportionable income of the taxpayer.
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HB NO. 58
Present law provides that "gross apportionable income from La. sources" shall include all
gross receipts derived from passenger journeys and cargo shipments originating in La. and
other items of gross apportionable income or receipts derived entirely from sources in La.
Proposed law changes present law to provide that for taxable periods beginning on or after
Jan. 1, 2016, the La. apportionment percent of these taxpayers shall be computed in
accordance with the ratios in present law; however, the ratio relative to gross apportionable
income shall be double-weighted or counted twice, and the La. apportionment percent shall
be calculated from the average of the three ratios.
TRANSPORTATION OTHER THAN AIRCRAF T OR PIPELINE
Present law provides that the La. apportionment percent of any taxpayer whose net
apportionable income is derived primarily from transportation other than by aircraft or
pipeline, shall be calculated from the average of the following ratios:
(1)The ratio of the value of immovable and movable property owned by the taxpayer
located in La. to the value of all immovable and movable property owned by the
taxpayer used in the production of apportionable income.
(2)The ratio of gross apportionable income from La. sources to the total amount of
gross apportionable income of the taxpayer.
Present law provides that "gross apportionable income from La. sources" shall include all
income derived entirely from sources within the state and a portion of revenue from
transportation partly in and partly outside this state, prorated with deference given to the
proportion of service performed in La.
Present law further provides that the value of immovable and movable property owned by
the taxpayer used in La. shall include the value of property regularly situated in this state
plus a pro rata of the value of all rolling stock and other mobile equipment owned by the
taxpayer used in the production of apportionable income, with deference given for the
mileage operated and traffic density inside and outside of this.
Present law provides for special provisions for trucking companies.
Proposed law changes present law to provide that for taxable periods beginning on or after
Jan. 1, 2016, the La. apportionment percent of these taxpayers shall be computed in
accordance with the ratios in present law; however, the ratio relative to gross apportionable
income shall be double-weighted or counted twice, and the La. apportionment percent shall
be calculated from the average of the three ratios.
SERVICE ENTERPRISES
Present law provides that the La. apportionment percent of any taxpayer whose net
apportionable income is derived primarily from a service business in which the use of
property is not a substantial income-producing factor shall be calculated from the following
ratios:
(1)The ratio of the amount paid by the taxpayer for salaries, wages, and other
compensation for personal services rendered in La. to the total amount paid by the
taxpayer for salaries, wages, and other compensation for personal services in
connection with the production of the net apportionable income.
(2)The ratio of the gross apportionable income of the taxpayer from La. sources to the
total gross apportionable income of the taxpayer.
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HB NO. 58
Present law provides that "gross apportionable income from La. sources" shall include
revenue from services performed in this state, and any other gross income derived entirely
from sources within this state.
Proposed law changes present law to provide that for taxable periods beginning on or after
Jan. 1, 2016, the La. apportionment percent of these taxpayers shall be computed in
accordance with the ratios in present law; however, the ratio relative to gross apportionable
income shall be double-weighted or counted twice, and the La. apportionment percent shall
be calculated from the average of the three ratios.
MANUFACTURING AND MERCHANDISING
Present law provides that the La. apportionment percent of a taxpayer whose net
apportionable income is derived primarily from the transportation by pipeline or from any
business not included in other provisions of present law (manufacturing and merchandising)
shall be calculated from the following three ratios:
(1)The ratio of the value of the immovable and movable property owned by the
taxpayer located in La. to the value of all immovable and movable property owned
by the taxpayer used in the production of the net apportionable income.
(2)The ratio of the amount paid by the taxpayer for salaries, wages, and other
compensation for personal services rendered in this state to the total amount paid by
the taxpayer for salaries, wages, and other compensation for personal services in
connection with the production of net apportionable income.
(3)The ratio of net sales made in the regular course of business and other gross
apportionable income attributable to this state to the total net sales made in the
regular course of business and other gross apportionable income of the taxpayer.
Present law provides that since Jan. 1, 2006, the La. apportionment percent of any taxpayer
whose net apportionable income is derived primarily from manufacturing or merchandising
shall be computed by a single ratio of net sales made in the regular course of business and
other gross apportionable income attributable to this state to the total net sales made in the
regular course of business and other gross apportionable income of the taxpayer.
Present law defines a manufacturing or merchandising business as a taxpayer whose net
apportionable income is derived primarily from the manufacture, production, or sale of
tangible personal property.
Proposed law changes present law by deleting the single sales ratio for manufacturers and
merchandisers beginning on or after Jan. 1, 2016, in favor of the four ratio calculation that
double-weighs sales.
Proposed law changes present law with respect to the apportionment percent for net
apportionable income derived primarily from the transportation by pipeline or from any
business not included in other provisions of present law (manufacturing and merchandising)
from a three ratio calculation to a four ratio calculation that double-weighs sales.
Applicable to all taxable periods beginning on and after Jan. 1, 2016.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:287.95(A), (C)(1)(a), (D), and (F)(1) and (2)(a) and (b))
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