All Roll Calls
Yes: 233 • No: 1
LouisianaHB 5672025 Regular SessionHouseWALLET
TAX/CORP INCOME: Provides for the tax treatment of S corporations and revises other provisions related to corporate income tax (EN DECREASE SD EX See Note)
Sponsored By: Tony Bacala (Republican)
Signed by Governor
Revenue and Fiscal AffairsWays and Means
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Bill Overview
Analyzed Economic Effects
8 provisions identified: 2 benefits, 3 costs, 3 mixed.
Business tax credits pass to owners
For tax periods beginning January 1, 2026, or later, eligible credits previously earned by S corporations pass to shareholders. Unless a credit's own law says otherwise, untaxed entities split credits using their operating agreements or S corporation bylaws. Without a controlling document, ownership shares determine the split; S corporations use shares held on the tax year's last day. Owners claim credits on their own returns, while C corporations claim credits on corporate returns. The law also removes the scheduled expiration of the Louisiana work opportunity tax credit.
Shareholder loss deductions face investment limits
For tax periods beginning January 1, 2026, or later, shareholder losses cannot exceed combined adjusted stock and company-debt basis. Basis is the tax value used to measure the shareholder's investment. Residents start with federal basis at the latest stock acquisition, S election, or Louisiana residency date, with specified tax-exempt-income adjustments. Nonresidents start at zero; later federal-style adjustments are limited to income counted under Louisiana's shareholder tax rules. Disallowed losses carry forward; final S-year losses are tested against basis on the last day of the post-termination transition period.
Businesses face collection for unpaid shareholder taxes
For tax periods beginning January 1, 2026, or later, Louisiana can collect overdue shareholder income taxes directly from S corporations. This applies to resident and nonresident shareholders who fail to pay on time. Collection uses the maximum individual, trust, or estate rate times the shareholder's Louisiana income share, plus interest and applicable penalties. Corporate payments count toward the shareholder's tax; overpayments can be refunded or credited against future payments for that shareholder. The corporation can seek repayment from the shareholder, including interest and penalties.
Some business subsidiaries lose income exclusion
For tax periods beginning January 1, 2026, or later, the law removes an income exclusion for qualified Subchapter S subsidiaries. The exclusion applied when the parent S corporation included the subsidiary's Louisiana income on its return. The law also removes the related rule treating the subsidiary's tax items as the parent's.
Louisiana workdays trigger worker tax withholding
Louisiana's nonresident wage exemption has a limit of 30 Louisiana workdays per calendar year. Once an employee exceeds 30 days, employers must withhold Louisiana tax for every Louisiana workday, including the first 30. The count includes work for the employer and related entities.
Business owners gain corporate tax choices
For tax periods beginning January 1, 2026, or later, S corporations generally pay no Louisiana corporate income tax. They must file annual information returns listing shareholders and their Louisiana and non-Louisiana income shares. Shareholders report their Louisiana income shares; Louisiana residents also report their non-Louisiana shares. S corporations and federally partnership-taxed entities can instead elect C corporation treatment, but electing S corporations cannot receive pass-through credits. The law also removes an earlier bar on electing S corporations claiming the S corporation income exclusion.
Simpler tax filing for nonresident shareholders
Beginning January 1, 2026, S corporations with Louisiana activity can file one combined return for any or all nonresident shareholders. Each shareholder's payment equals their Louisiana-source income share multiplied by the maximum Louisiana individual, trust, or estate tax rate. Shareholders need no separate Louisiana return when their only Louisiana income is the S corporation income covered by that payment. Credits and overpayments are assigned to the respective shareholders and cannot be claimed again for the same period. Returns must be filed electronically, and confirmed overpayment refunds go to the filing corporation.
Resident shareholders face distribution tax rules
For tax periods beginning January 1, 2026, or later, Louisiana residents pay tax on S corporation distributions classified as dividends or gains. Federal rules guide that classification. Residents must track an accumulated adjustments account that generally follows the corporation's account, with the law's modifications. After S status ends, transition-period cash distributions are not taxable to the extent they reduce adjusted stock basis.
Sponsors & Cosponsors
Sponsor
Tony Bacala
Republican • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 6/9/2025
Read by title, roll called, yeas 98, nays 0, Senate amendments concurred in.
Yes: 98 • No: 0
Senate vote • 6/8/2025
Rules suspended. Senate floor amendments read and adopted. Read by title, passed by a vote of 38 yeas and 0 nays, and ordered returned to the House. Motion to reconsider tabled.
Yes: 38 • No: 0
House vote • 4/28/2025
Read third time by title, amended, roll called on final passage, yeas 82, nays 1. Finally passed, title adopted, ordered to the Senate.
Yes: 82 • No: 1
House vote • 4/22/2025
Reported with amendments
Yes: 15 • No: 0
Actions Timeline
Signed by the Governor. Becomes Act No. 382.
6/20/2025HouseEffective date: 06/20/2025.
6/20/2025HouseSent to the Governor for executive approval.
6/11/2025HouseEnrolled and signed by the Speaker of the House.
6/10/2025HouseSigned by the President of the Senate.
6/10/2025SenateRead by title, roll called, yeas 98, nays 0, Senate amendments concurred in.
6/9/2025HouseRules suspended. Senate floor amendments read and adopted. Read by title, passed by a vote of 38 yeas and 0 nays, and ordered returned to the House. Motion to reconsider tabled.
6/8/2025SenateReceived from the Senate with amendments.
6/8/2025HouseScheduled for concurrence on 06/09/2025.
6/8/2025HouseReported with amendments. Rules suspended. Committee amendments read and adopted. Read by title and referred to the Legislative Bureau.
6/4/2025SenateReported without Legislative Bureau amendments. Read by title and passed to third reading and final passage.
6/4/2025SenateSenate Committee amendments read and adopted.
5/13/2025SenateRead by title. Recommitted to the Committee on Finance.
5/13/2025SenateReported with amendments.
5/12/2025SenateRead second time by title and referred to the Committee on Revenue and Fiscal Affairs.
4/30/2025SenateReceived in the Senate. Read first time by title and placed on the Calendar for a second reading.
4/29/2025SenateRead third time by title, amended, roll called on final passage, yeas 82, nays 1. Finally passed, title adopted, ordered to the Senate.
4/28/2025HouseScheduled for floor debate on 04/28/2025.
4/24/2025HouseRead by title, amended, ordered engrossed, passed to 3rd reading.
4/23/2025HouseReported with amendments (15-0).
4/22/2025HouseRead by title, under the rules, referred to the Committee on Ways and Means.
4/14/2025HousePrefiled.
4/4/2025HouseUnder the rules, provisionally referred to the Committee on Ways and Means.
4/4/2025House
Bill Text
Engrossed
Enrolled
Introduced
Reengrossed
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