Louisiana State R&D Tax Credits
Louisiana authorizes corporation income tax credits for certain donations to the Dedicated Research Investment Fund, certain expenditures related to university research and development parks, and qualified taxpayers who claim certain federal income tax research and development credits or received certain federal research grant awards.
Louisiana State Dedicated Research Investment Fund Donations
Refundable Tax Credit – No*
- Before June 17, 2013, a tax credit could be claimed for a taxpayer’s cash donation to the Dedicated Research Investment Fund if the initial donation was at least $200,000. The credit was equal to 35% of the cash donation
Unused credit can be carried forward until it is fully used.
University R&D Parks Credit
Refundable Tax Credit – No*
- A tax credit may be granted to eligible businesses located in a research and development park operated in association with a public or regionally accredited independent university in the state. Eligible “concern” means any manufacturing, research and development, support, or service business entity whose primary activity is related to research and development or support of such entities
- The credit is equal to the purchase price of machinery and scientific equipment used on the premises of the concern in the park area
- The cost may be allocated to the tax liability for up to five years as established by contract [La. Rev. Stat. Ann. §17:3389]
A limited exemption from tax is also available to businesses located in research and development parks operated in association with a public or regionally accredited independent university in the state
Federal R&D Credit or Research Grant Award Claimants
Refundable – No*
- For purposes of the Louisiana R&D tax credit, qualified research expenses must be incurred in Louisiana
- Louisiana defines its base amount as 70 percent of the prior three years of QRes
The credit amount is:
- 40 percent for companies that employ up to 50 Louisiana residents
- 20 percent for companies that employ 50-99 employees, and
- 8 percent for companies with 100 or more employees
The tax credit was refundable from 2009 through June 30, 2015.* As of July 1, 2015, the credit is no longer refundable and has a carry-forward period of five years. Credits claimed prior to 2009 that can’t be utilized may be carried forward, transferred or sold.
How to obtain the credit?
For taxpayers with fewer than 50 employees, a federal Form 6765, Credit for Increasing Research Activities, must be filed for the current tax year or a completed Agreed Upon Procedures Report. In order for the R&D tax credits to be awarded, a taxpayer must claim the expenditures within one year after Dec. 31 of the year in which the expenditures were incurred. Prior to claiming the R&D tax credits, a company must apply for and obtain a credit certification from the Department of Economic Development. The application requires a $250 fee. Once the credits are authorized, a taxpayer must file an amended return.
Find out if you qualify for the R&D tax credit
SELL YOUR NOL’s AND R&D CREDITS
If your company hasn’t considered the R&D credit in the past because you have net operating losses (NOLs) and could not utilize the credit contact us today to find out which states allow you to sell your credits and losses for up to 95 cents on the dollar. Also, qualified start-up companies can now take a credit on their payroll taxes for their R&D credit, allowing your company to utilize the R&D credit immediately, even if your company does not have taxable income.
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