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 99 Original 2016 First Extraordinary Session Stokes
Abstract: Changes the apportionment percent for apportionable income derived for certain
transportation and service industry sectors to a single ratio calculation.
Transportation By Aircraft
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.
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 by using the single ratio
as provided in (2).
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.
Transportation Other Than Aircraft 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.
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 by using the single ratio
as provided in (2).
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.
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 average of 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.
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 by using the single ratio
as provided in (2).
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.
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
average of 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.
Proposed law changes present law to provide that for taxable periods beginning on or after Jan. 1,
2016, the La. apportionment percent of taxpayers whose apportionable income is derived primarily
from transportation by pipeline or from any business not included in other provisions of present law
shall be computed by using the single ratio as provided in (3).
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.
Proposed law retains present law as it relates to the apportionment ratios for manufacturing or
merchandising sectors.
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), (D), and (F)(2)(a) and (b))