Information on the Louisiana R&D Tax Credit:
The Louisiana R&D credit is generated from qualified research activities (QRAs) performed within the state. Qualifying activities are defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.”
State Credit Name: Louisiana Research and Development Tax Credit
Expiration Date: Indefinite
Who Can Apply? Corporations and flow-through entities
Credit Carry Forward: 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.
About the Credit: Louisiana defines its base amount as 80% of the average of the prior three years of QREs for any entity that employs 50 or more persons. An entity with fewer than 50 employees, the base amount is 50% of the average of the prior three years of QREs.
The Application has 3 types of calculation methods:
- LQRE (<50 Employees): The credit is calculated as 30% of QREs over a base period. The base period is calculated as 50% of the average of QREs in the 3 preceding tax years;
- Credit for Increasing QREs (50-99 Employees): The credit is calculated as 10% of QREs over a base period, defined as 80% of the average of QREs in the 3 preceding tax years; and
- Credit for Increasing QREs (100+ Employees): The credit is calculated as 5% of QREs over a base period, defined as 80% of the average of QREs in the 3 preceding tax years.
If there is no base period available (e.g. first year with R&D expenditures), there will be no base calculation.
Notes: Before claiming the Louisiana R&D credit, a taxpayer must apply for and receive a credit certification from the Department of Economic Development, which requires an application fee. The fee is equal to 0.5% of the credit applied for (min. $500, max. $15,000). The taxpayer must claim the expenditures within one year after December 31 in which the expenditures were obtained.
Click here to find out if you qualify for the federal research credit.
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