House Bill No. by Representative Bacala proposes significant amendments to Louisiana's corporate taxation laws, particularly focusing on S corporations. The bill raises the threshold for tax withholding on wages paid to nonresident employees from twenty-five days to thirty days and repeals the S corporation exclusion that previously allowed certain income to be exempt from taxation. It introduces new definitions and requirements for S corporations, including the obligation to file annual informational returns and the flow-through of tax credits to shareholders starting January 1, 2026. Additionally, the bill removes the sunset provision from the Louisiana work opportunity tax credit and clarifies the tax treatment of qualified Subchapter S subsidiaries.

The legislation allows S corporations to file composite returns on behalf of their nonresident shareholders, defining terms such as "composite payment" and "composite return." It stipulates that tax payments made by the S corporation for its nonresident shareholders will count as income tax payments for those shareholders, allowing for refunds or credits if the payment exceeds their tax liability. The bill also makes deletions from existing law regarding the treatment of qualified Subchapter S subsidiaries, replacing them with provisions for composite returns. Overall, the bill aims to streamline the tax process for S corporations and enhance compliance with state tax obligations, with the new provisions applying to income tax periods beginning on or after January 1, 2026.

Statutes affected:
HB567 Original: 47:2(A), 47:248(B)(1), 47:2(A)(1), 47:1675(F)(1), 39:2(15, 39:1), 47:1675(G)
HB567 Engrossed: 47:2(A), 47:248(B)(1), 47:2(A)(1), 47:1675(F)(1), 39:2(15, 39:1), 47:1675(G)
HB567 Reengrossed: 47:2(A), 47:248(B)(1), 47:2(A)(1), 47:1675(F)(1), 39:2(15, 39:1), 47:1675(G)
HB567 Enrolled: 47:2(A), 47:248(B)(1), 47:2(A)(1), 47:1675(F)(1), 39:2(15, 39:1), 47:750(I), 47:1675(G)