Louisiana R&D Tax Credit Explained for Businesses

Louisiana and the R&D Tax Credit

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.

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Special Notes: 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.”

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.

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.

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Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s office location at 1615 Poydras Street, New Orleans, Louisiana provides R&D tax credit consulting and advisory services to New Orleans, Baton Rouge, Shreveport, Lafayette, Lake Charles, Kenner, Bossier City, Monroe, Alexandria and Houma.

If you have any questions or need further assistance, please call or email our local Louisiana Partner on (504) 584-8597.
Feel free to book a quick teleconference with one of our Louisiana R&D tax credit specialists at a time that is convenient for you. Click here for more information about R&D tax credit management and implementation.

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Louisiana R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in Louisiana, businesses must first apply for and obtain a credit certification from Louisiana Economic Development (LED). 1 This involves completing an online application, submitting a fee, and providing documentation that details qualified research activities (QRAs) and expenditures incurred in Louisiana. 2 For businesses that file for the Federal R&D tax credit, they typically need to attach their Federal Form 6765, “Credit for Increasing Research Activities.” Once the certification is approved by LED, the business can then claim the tax credits on their Louisiana income tax return. 2 The specific form to be filed with the Louisiana Department of Revenue for the state R&D tax credit claim is Louisiana Form R-620, “Research and Development Tax Credit Claim Form.” This form should be included with the business’s corporate or personal income tax return, depending on its structure. It is crucial to claim the expenditures within one year after December 31 of the tax period in which they were incurred.

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Louisiana Patent of the Year – 2024/2025

Advano Inc. has been awarded the 2024/2025 Patent of the Year for their innovative approach to silicon anode materials. Their invention, detailed in U.S. Patent No. 11970401, titled ‘Amorphization of silicon’, introduces a novel process to transform crystalline silicon into amorphous nanoparticles, enhancing the performance and longevity of lithium-ion batteries.

This breakthrough addresses a critical challenge in battery technology: silicon’s tendency to expand and contract during charge cycles, leading to capacity loss and shortened battery life. Advano’s patented method involves milling silicon nanocrystals with a crystallinity greater than 60% to produce amorphous silicon nanoparticles with reduced crystallinity. This structural modification allows for better accommodation of volume changes during battery operation, improving cycle stability and energy density.

Advano’s approach offers a scalable and cost-effective solution, positioning it as a potential game-changer for industries reliant on high-performance batteries, such as electric vehicles and renewable energy storage. By enhancing the structural integrity of silicon anodes, this innovation paves the way for batteries that are not only more efficient but also more durable, contributing to the advancement of sustainable energy technologies.