Laws & taxes

Employment laws | Workers' compensation | Unemployment compensation | Wages Patent, trademark, copyright | Foreign Trade Zone | Corporate Income Tax | Franchise Tax | Partnerships and LLCs | Property tax | Sales and use tax | Employment taxes

Louisiana is unique from the other states by virtue of its civil law system. Although in many areas the laws in Louisiana are similar to those in other states, Louisiana's civil code is distinct in some of its rules pertaining to areas such as property, successions and matrimonial regimes. Louisiana-specific legal issues can be easily navigated with the assistance of a Louisiana attorney. This section of the guide sets forth basic information about some of the laws in Louisiana that businesses may encounter and resources that may assist in obtaining further information and guidance about those laws.

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Of course, this guide is not intended as and cannot be used as a comprehensive legal guide, and it is not a substitute for legal advice. Additionally, laws, and the information on government agency Web sites, change, so it is important to verify the current state of the law before implementing policies or procedures, or taking action. If you have any specific questions about compliance with Louisiana laws or a particular situation, you should consult a Louisiana attorney. You can find a list of Louisiana firms and attorneys at www.martindale.com or through the Louisiana State Bar Association.

EMPOLYMENT LAWS
Louisiana is an employment-at-will state. Generally, this means that an employer may legally hire, fire, suspend, discipline, or take any other employment action against any employee at any time and for any reason, as long as it is not an unlawful reason. Louisiana laws define many types of unlawful reasons for employment actions, which are exceptions to the at-will rule of employment. For instance, an employer may not discriminate against any employee on the basis of the employee's race, sex, age, religion, color, national origin, or disability. An employer also may not take an adverse employment action against an employee for military service, political opinions or voting, or filing a workers' compensation claim. Louisiana law also prohibits discrimination on the basis of pregnancy or childbirth, sickle cell trait, handicap, and smoking, among other protected characteristics. Also, keep in mind that local governments in Louisiana may adopt more protective laws regarding employee rights, such as Orleans Parish, which prohibits discrimination on the basis of sexual orientation in that jurisdiction.

Louisiana also prohibits retaliation against employees who have engaged in certain activities. For example, Louisiana has a general whistleblower or "reprisal" law, which prohibits employers from taking reprisal against any employee who advises the employer that it is in violation of a law and the employee either discloses, threatens to disclose, or testifies about the violation of law, or the employee objects to or refuses to participate in an employment act in violation of law.

Louisiana is also a "right to work" state, which means employees may not be required to join or belong to a labor organization as a condition of employment. Louisiana law also regulates the issuance of injunctions related to labor disputes and the use of workers brought in from other states to replace striking employees.

Of course, federal employment laws apply in Louisiana as well. Employers should keep in mind, however, that Louisiana can adopt employment laws that are more protective of employees than federal law, so additional requirements may apply in Louisiana. For example, Louisiana law provides for six weeks of protected leave to an employee for pregnancy, childbirth, or a related medical condition, and up to four months of leave when there is a complication.

Like the federal employment laws, many of Louisiana's employment laws apply to employers who meet certain employee thresholds, usually 15-25 employees, depending upon the particular law. Some laws in Louisiana, however, apply to all employers, regardless of the number of employees. Any employer seeking to do business in Louisiana is encouraged to consult a Louisiana labor and employment attorney to insure compliance with these laws, as well as to insure that its policies and procedures do not conflict with Louisiana laws.

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WORKERS' COMPENSATION
All employers operating in Louisiana are required to provide workers' compensation coverage to their employees. This is true even in cases where the employee only works on temporary assignments, the employer does not withhold federal or state taxes, and the employer pays the employee in cash. The workers' compensation policy must provide coverage for all compensable incidents under the workers' compensation statute. If a particular coverage is not limited in the statute, then limitation is not permitted in the policy. Employers are cautioned about classifying employees as "independent contractors" without first consulting an attorney. Misclassification of employees as independent contractors, and failure to provide workers' compensation and withhold the appropriate taxes, can have serious legal consequences.

Employees are entitled to workers' compensation coverage from their very first day of work. The workers' compensation law prohibits an employer from withholding workers' compensation premiums from an employee's pay. The penalty for operating without proper workers' compensation coverage is $250 per employee for a first offense and $500 per employee for a second offense.

An employer can be responsible for the medical expenses and weekly benefit payments of any employee who is injured in the performance of his or her job and who is consequently unable to continue working, subject to certain exceptions. An employer may pay such expenses out-of-pocket or may obtain commercial workers' compensation insurance for employees. For information and forms, contact the Louisiana Department of Labor, Office of Workers' Compensation Administration.

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Family Medical Leave Act (FMLA)
The FMLA applies to employers in Louisiana who have 50 or more employees. Employees working for covered employers are eligible for unpaid medical leave and other benefits if they work at a job site where the employer employs 50 or more persons in a 75-mile radius, they have been employed for at least 12 months for the employer and have worked at least 1,250 hours in the preceding 12 months, and if they have a serious health condition or other qualifying circumstance under the FMLA. The FMLA is a complex statute with complex regulations, and imposes benefits continuation and job restoration obligations on employers in qualifying circumstances.

Questions about FMLA can be directed to one of the following U.S. Department of Labor offices in Louisiana, or you can consult the U.S. Department of Labor's Web site:

The publication is also available in hard copy from:
Louisiana Department of Labor
Office of the Secretary
Public Relations Division
P. O. Box 94094
Baton Rouge, LA 70804-9094
Phone: 1-877-LAWORKS or (225) 342-3035

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Posting
Employers are required to post a copy of labor laws as designated by federal and Louisiana law. Information and copies of these posters may be obtained by contacting a local Job Center or at www.laworks.net under "E-interactive services." Several private companies, such as G. Neil , offer federal and Louisiana posters and certify compliance with all applicable laws.

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Freeport trade laws
Items imported from outside the United States are exempt from property taxes so long as they remain in their original containers on the public property of the port authority or on the docks of the common carrier where they first entered the state. Raw materials, goods and commodities destined for export outside the United States are exempt from property taxes while held on the public property of a port authority, on the docks of a common carrier, or at a warehouse, grain elevator, dock, wharf or public storage facility. For more information about freeport trade laws, contact the International Trade Division, Louisiana Economic Development, P.O. Box 94185, Baton Rouge, LA 70804-9185; (225) 342-4320.

FOREIGN TRADE ZONE
The Foreign Trade Zone is a designated area considered to be outside the commerce of the United States for international purposes. Companies that import and export goods have the flexibility to delay customs duties inside the zone. If the goods are exported from the zone, no duty is paid. Corporate franchise taxes and the state inventory tax on foreign goods are also exempt inside the zone. For more information, contact one of Louisiana's port authorities or deep draft ports.

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Other resources

Equal Employment Opportunity Commission (EEOC)
It is a violation of federal law to deny equal opportunity in the hiring, firing, recruitment, promotion or retention of employees based on race, color, religion, sex, national origin, age or handicap. For information, contact the U.S. Equal Employment Opportunity Commission, 701 Loyola Ave., Suite 600, New Orleans, LA 70113; (504) 589-2329.

Occupational Safety and Health Administration (OSHA)
Federal laws and regulations regarding working conditions and employee safety and health are enforced by OSHA. For information, contact the Occupational Safety and Health Administration, Office of Public Affairs, Room N3647, 200 Constitution Ave., Washington, D.C. 20210; (202) 693-1999. OSHA also maintains a local field office at 9100 Bluebonnet Centre Blvd., Suite 201, Baton Rouge, LA 70809; (225) 298-5458, fax (225) 298-5457.

U.S. Food and Drug Administration (FDA)
For information concerning federal regulations governing the production, marketing, transporting, handling and sale of foods, drug products, medical devices, cosmetics, biologics (blood and blood products) and veterinary products, including inspections and product recalls, contact the U.S. Food and Drug Administration, 5600 Fishers Ln., Rockville, MD, 20857; (888) 463-6332.

Securities and Exchange Commission (SEC)
For information on capital formation and federal securities law, contact the Office of Small Business, U.S. Securities and Exchange Commission, 450 Fifth St. NW, Washington, D.C. 20549-0304; (202) 942-2950.

Taxes
Depending on their legal structure, businesses operating in Louisiana may be subject to the following taxes: corporate income and franchise taxes, state sales and use taxes, local sales and use taxes, and property taxes. The information presented below is intended as a general guide to Louisiana tax rules for businesses; for answers to questions about specific businesses or situations, consult your accountant or contact the Louisiana Department of Revenue at one of the numbers listed below.

To assist businesses getting started in Louisiana, LDR offers general information about business taxes on the LDR Web site business page. The department also offers the option of free Internet filing for some business taxes as well as online payment and account services. Go to the business page and click on "e-Services" to learn more.

For tax forms, visit the LDR main office, any of its regional offices, or call (225) 219-2113. Many forms can also be downloaded at www.revenue.louisiana.gov.

Louisiana Department of Revenue Phone Directory
Department Information
(225) 219-2112

Application and Business Registration
(225) 219-7318

Tax Forms
(225) 219-2113

Corporation Income & Franchise Tax
(225) 219-0067

Contractor Registration
(225) 219-7356

Sales Tax
(225) 219-7356

Excise Tax
(225) 219-7656

Withholding
(225) 219-0102

CORPORATE INCOME TAX

• Corporations doing business in Louisiana are classified as either domestic corporations or foreign corporations. An income tax return (Form CIFT-620) is due on or before the 15th day of the fourth month following the close of the corporation's year end.
• An extension may be filed to obtain an additional six months of time. If any tax is owed by the corporation, it is due by the 15th day of the fourth month following the close of the corporation's year end in order to avoid penalties and interest.
• Corporations are required to make estimated payments if the tax due for the year is expected to be $1,000 or more. Estimated tax payments are generally due quarterly.
• S corporations filing Form CIFT-620 are excluded from Louisiana income tax. The exclusion is determined by multiplying Louisiana net income by a calculated ratio. This ratio is calculated by dividing the number of issued and outstanding shares of the S corporation's capital stock owned by Louisiana residents on the last day of the S corporation's taxable year by the total number of issued and outstanding shares of capital stock on the last day of the S corporation's taxable year.

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Corporate Income Tax Rates

Louisiana provides a credit against income and franchise tax for ad valorem taxes paid to political subdivisions in Louisiana on inventory held by manufacturers, distributors and retailers. Any allowable credit that exceeds the tax liability shall be refunded to the taxpayer.

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PARTNERSHIPS AND LLCs

• A partnership is not required to file a return if all partners are residents of Louisiana.
• Partnerships, including syndicates, groups and other ventures doing business in Louisiana or deriving any income from sources therein, regardless of the amount and regardless of the residence of the partners, shall make a return of income on Form IT-565 if any partner is a nonresident of Louisiana or any partner is a business or corporation rather than an individual. If the partnership has income that is derived from sources partly within and partly outside Louisiana, Form IT-565B must be filed with Form IT-565.
• The return for the calendar year must be filed on or before May 15 of the year following the close of the calendar year. Returns for fiscal years must be filed on or before the 15th day of the fifth month after the close of the fiscal period.
• Each partner must include the distributive share of the net income of a partnership on his/her individual return. The distributive share is based on the partnership's accounting period (whether fiscal or year end) that ended during the partner's taxable year, whether or not such share is distributed. Form IT-540 is for resident individuals. A nonresident member of a partnership must include his/her distributive share of that portion of the partnership income that was derived from sources within Louisiana on Form IT-540-B. Partnerships also have the option of filing a composite return and paying the tax on the nonresident income.
• Individuals should use the information reported on the federal partnership return instead of the amounts shown in the partners' allocation schedule. Corporations should refer to R.S. 47:287.93A(7).
• The return must be filed for a calendar year, or for a fiscal year of 12 months, ending on the last day of any month other than December. The dates for which the period covered by the return begins and ends must be clearly indicated at the top of the return. Under Louisiana law, the accounting period established on the first return must be adhered to for subsequent years, unless permission to make a change is received from the Secretary of Revenue.
• An LLC is taxed and treated in the same manner for Louisiana income tax purposes as it is taxed and treated for federal income tax purposes. If the LLC is taxed as a corporation for federal income tax purposes, the LLC will be taxed as a corporation for Louisiana income tax purposes. If it is considered a partnership for federal income tax purposes (the most common situation) then it is treated as a partnership for Louisiana income tax purposes. An LLC is always treated as a partnership for franchise tax purposes and therefore is not subject to Louisiana franchise tax.

PROPERTY TAX

• Property tax in Louisiana is imposed at the local level. The property tax applies not only to real estate and tangible personal property, but also to certain intangible property. Local assessors determine the fair market value of immovable property. Taxes are due by Dec. 31.
• The rate is an aggregate of the millages levied by all taxing jurisdictions in which the taxable property is located. (One mill equals $1 tax on $1,000 assessed value.)

Property Tax Rates
Under Louisiana law, the property tax is generally assessed on a percentage of the fair market value of property subject to tax, according to classification of the property:

*Agricultural and horticultural lands, marsh and timberlands are taxed at 10% of their use value, rather than their fair market value.

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Local property tax info
Contact your parish government for information on the jurisdictions and millages that apply to your property, which depend on its location.

The Louisiana Assessors' Association maintains a list of Louisiana assessors with contact info and local Web links.

The Louisiana Tax Commission provides answers to FAQs about property taxes and assessment.

• Property taxes are assessed on an annual basis, generally on Jan. 1 of each year, except in Orleans Parish (New Orleans), where the assessment is made each Aug. 1 to determine property tax liability for the following year. While property tax assessment and collection is a local matter, the Louisiana Tax Commission generally oversees the local assessors.
• Property is assessed on the basis of its condition as of Jan. 1 of each year (Aug. 1 in Orleans Parish). Real property (land and improvements) is reassessed at least every four years and personal property (inventory, equipment, furniture and fixtures) is reassessed every year. Public service property is assessed annually (by Sept. 1) by the Louisiana Tax Commission and all other property by the assessor in each parish. The LTC also assesses taxable intangibles (bank stocks and credits and insurance premiums).
• Under Louisiana's Homestead Exemption, homesteads up to 160 acres that are primary residences are allowed an exemption of $75,000 on the assessed value of the home.

• For more information on state sales taxes, call the LDR's taxpayer assistance & information line at (225) 219-7356.
• More information on parish sales taxes is easy to find using the Louisiana Association of Tax Administrators Web site. Click on your parish's name or map location to obtain current local sales tax rates, forms and contact info for the local tax collection agency.

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EMPLOYMENT TAXES
If you have employees, you are responsible for federal, state, and local taxes. Employment taxes include the following:

• Federal income tax
• Social Security and Medicare taxes
• Federal Unemployment Tax Act (FUTA).
• You generally must withhold federal income tax from your employees wages.
• Social security and Medicare taxes pay for benefits that workers and families receive under the Federal Insurance Contributions Act (FICA). You withhold part of these taxes from your employee's wages and you pay a matching amount yourself.
• You pay FUTA tax only from your own funds. Employees do not pay this tax or have it withheld from their pay.
• Contact your accountant or the IRS or one of its Louisiana offices for assistance with forms and procedures.

Postlethwaite & Netterville assisted in the preparation of the material in this section.

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