HLS 23RS-174 ENGROSSED
2023 Regular Session
HOUSE BILL NO. 428
BY REPRESENTATIVE PRESSLY
TAX/INCOME TAX: Extends to estates, trusts, and partnerships the flow-through entity
income exclusion allowed to individuals
1 AN ACT
2To enact R.S. 47:203(C), 300.6(B)(2)(e), and 300.7(C)(2)(d), relative to state income tax;
3 to provide relative to computation of income of estates, trusts, and partnerships
4 subject to state income tax; to provide relative to income derived from flow-through
5 entities; to provide for an exclusion of such income from the taxable income of
6 estates, trusts, and partnerships subject to certain conditions; to provide for
7 requirements and limitations associated with the exclusion; to provide for
8 applicability; and to provide for related matters.
9Be it enacted by the Legislature of Louisiana:
10 Section 1. R.S. 47:203(C), 300.6(B)(2)(e), and 300.7(C)(2)(d) are hereby enacted
11to read as follows:
12 §203. Partnership computations
13 * * *
14 C.(1) In computing the taxable income of a partnership, the partnership shall
15 exclude net income or losses received from an entity of which the partnership is a
16 shareholder, partner, or member if the entity properly filed a Louisiana corporation
17 income tax return pursuant to R.S. 47:287.732.2 which included the net income or
18 loss. However, no such exclusion shall be allowed for any amount attributable to
19 income that, for any reason, will not bear the tax due pursuant to R.S. 47:287.732.2.
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1 (2)(a) A partnership whose federal income tax return is adjusted due to S
2 corporation or partnership income or losses for which the partnership used the
3 exclusion provided in Paragraph (1) of this Subsection shall furnish a statement to
4 the secretary disclosing the nature and amounts of such adjustments within sixty days
5 after the federal adjustments have been made and accepted by the partnership.
6 However, if the partnership does not receive a statement of the federal adjustments
7 until after it accepts the adjustments, it shall have sixty days from the receipt of such
8 statement within which to furnish the required statement to the secretary.
9 (b) For purposes of Subparagraph (a) of this Paragraph, paying the federal
10 tax shown due or signing a consent to immediate assessment shall constitute an
11 acceptance of the federal adjustments.
12 * * *
13 §300.6. Louisiana taxable income of resident estate or trust
14 * * *
15 B. Modification. For purposes of this Section, federal taxable income shall
16 be modified by adding or subtracting the items set forth below:
17 * * *
18 (2) There shall be subtracted from federal taxable income, unless already
19 excluded therefrom:
20 * * *
21 (e)(i) Net income or losses received from an entity of which the estate or
22 trust is a shareholder, partner, or member if the entity properly filed a Louisiana
23 corporation income tax return pursuant to R.S. 47:287.732.2 which included the net
24 income or loss. However, no such exclusion shall be allowed for any amount
25 attributable to income that, for any reason, will not bear the tax due pursuant to R.S.
26 47:287.732.2.
27 (ii)(aa) An estate or trust whose federal income tax return is adjusted due to
28 S corporation or partnership income or losses for which the estate or trust used the
29 exclusion provided in Item (i) of this Subparagraph shall furnish a statement to the
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HB NO. 428
1 secretary disclosing the nature and amounts of such adjustments within sixty days
2 after the federal adjustments have been made and accepted by the estate or trust.
3 However, if the estate or trust does not receive a statement of the federal adjustments
4 until after it accepts the adjustments, it shall have sixty days from the receipt of such
5 statement within which to furnish the required statement to the secretary.
6 (bb) For purposes of Subitem (aa) of this Item, paying the federal tax shown
7 due or signing a consent to immediate assessment shall constitute an acceptance of
8 the federal adjustments.
9 §300.7. Louisiana taxable income of nonresident estate or trust
10 * * *
11 C. Modification. For purposes of this Section, federal taxable income shall
12 be modified by adding or subtracting the items set forth below:
13 * * *
14 (2) There shall be subtracted from federal taxable income, unless already
15 excluded therefrom:
16 * * *
17 (d)(i) Net income or losses received from an entity of which the estate or
18 trust is a shareholder, partner, or member if the entity properly filed a Louisiana
19 corporation income tax return pursuant to R.S. 47:287.732.2 which included the net
20 income or loss. However, no such exclusion shall be allowed for any amount
21 attributable to income that, for any reason, will not bear the tax due pursuant to R.S.
22 47:287.732.2.
23 (ii)(aa) An estate or trust whose federal income tax return is adjusted due to
24 S corporation or partnership income or losses for which the estate or trust used the
25 exclusion provided in Item (i) of this Subparagraph shall furnish a statement to the
26 secretary disclosing the nature and amounts of such adjustments within sixty days
27 after the federal adjustments have been made and accepted by the estate or trust.
28 However, if the estate or trust does not receive a statement of the federal adjustments
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HB NO. 428
1 until after it accepts the adjustments, it shall have sixty days from the receipt of such
2 statement within which to furnish the required statement to the secretary.
3 (bb) For purposes of Subitem (aa) of this Item, paying the federal tax shown
4 due or signing a consent to immediate assessment shall constitute an acceptance of
5 the federal adjustments.
6 Section 2. The provisions of this Act shall be applicable for taxable periods
7beginning on or after January 1, 2023.
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 428 Engrossed 2023 Regular Session Pressly
Abstract: Extends to estates, trusts, and partnerships the flow-through entity income
exclusion allowed to individuals and provides for conditions and requirements
relative to the exclusion.
Present law provides for all of the following:
(1)An election that authorizes Subchapter S corporations and other flow-through entities
to file income tax returns and pay tax on their La. income as if they were Subchapter
C corporations (R.S. 47:287.732.2).
(2)An exclusion from taxable income for individual taxpayers for net income or losses
received from a flow-through entity which properly filed a La. corporation income
tax return that included the net income or loss (R.S. 47:297.14(A)).
(3)A requirement that any individual taxpayer who utilizes the flow-through entity
exclusion described in paragraph (2) above shall notify the Dept. of Revenue if
changes are made to his federal income tax return due to adjustments to an S
corporation's income or losses (R.S. 47:297.14(B)).
Proposed law retains present law and extends to estates, trusts, and partnerships the
flow-through entity income exclusion described in paragraph (2) above that present law
allows for individual taxpayers. Proposed law also requires estates, trusts, and partnerships
to notify the Dept. of Revenue if changes are made to their federal income tax returns due
to adjustments to an S corporation's income or losses in the same manner as required by
present law for individual taxpayers as described in paragraph (3) above.
Proposed law is applicable for taxable periods beginning on or after Jan. 1, 2023.
(Adds R.S. 47:203(C), 300.6(B)(2)(e), and 300.7(C)(2)(d))
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