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.”
Process improvement activities include:
- Identifying uncertainty concerning the development or improvement of a business component;
- Identifying one or more alternatives intended to eliminate that uncertainty; and
- Identifying and conducting a process of evaluating the alternatives (e.g., through modeling, simulation, or a systematic trial-and-error methodology).
The R&D Tax Credit is a credit that is available across various industries, such as:
- Food and Beverage
- Oil and Gas
State Credit Name: Louisiana Research and Development Tax Credit
Expiration Date: December 31, 2019
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 70% of the prior three years of QREs.
- For companies with 50 or less employees, the credit rate is 40%, and a Federal Form 6765 must be filed for the current tax year.
- The credit rate is 20% for companies that have 50-99 employees.
- The credit rate is 8% for companies that have 100 or more employees.
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 a $250 application fee. 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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