Louisiana R&D Tax Credits

The Louisiana Research and Development Tax Credit encourages existing businesses with operating facilities in Louisiana to establish or continue R&D activities within the state to receive up to a 30% tax credit on qualified research expenditures (QREs) incurred in Louisiana—with no cap and no minimum requirement.

The incentive is open to companies who meet certain eligibility requirements (see below) pertaining to R&D activities conducted in Louisiana.

In order for credits to be awarded, a taxpayer must claim the expenditures within one year after December 31 of the tax period in which the expenditures were incurred.

Louisiana R&D credits are claimed using an online application system.

Ineligible Businesses

The following businesses will be ineligible to participate in the Research and Development tax credit program, unless specifically invited by the Department of Louisiana Economic Development (LED):

• Professional services firms (e.g. architecture or engineering) that do not have a pending or issued United States patent related to the QREs claimed; or
  
• Businesses primarily engaged in custom manufacturing and custom fabricating that do not have a pending or issued United States patent related to the QREs claimed.

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Learn more about Louisiana's R&D Tax Credit here, here, and here.

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporation, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Due with Louisiana Tax Return

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Data Required to Compute Credit:

Claim Period Federal Qualified R&D Expenses (QREs)

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What Information is needed?

Louisiana QREs for Prior 3 Years

Number of Louisiana Employees

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Credit Carryforward:

5 Years

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The R&D tax credit equals:

• 5% of the difference, if any, of the Louisiana QREs for the taxable year minus the base amount (for taxpayers employing 100 or more persons);
  
• 10% of the difference, if any, of the Louisiana QREs for the taxable year minus the base amount (for taxpayers employing 50-99 persons); or
  
• 30% of the difference, if any, of the Louisiana QREs for the taxable year minus the base amount (for taxpayers employing less than 50 persons).

Specific Items to Note:

• A company must claim the Louisiana R&D credit within one year after December 31 in which the expenditures was incurred.
• Prior to claiming a Louisiana R&D credit, the taxpayer must apply for and obtain a credit certification from the LED Secretary.  A company must submit a completed online application and fee.
• Audit Considerations:  Each year, prior to the issuance of credits, LED will perform a detailed examination of at least 10% of all applications received. The Secretary will select applications for audit based on one or more of the following:

1. A random sampling of applications;
2. the applicant's business sector; or
3. other selection criteria as determined by LED.