Ezel / Tax Rulings / LA

How did Louisiana treat a corporate owner's single-member LLC that had not elected federal corporate tax status?

Short answer Louisiana followed federal treatment: the LLC was a disregarded division of its corporate owner, and its assets, liabilities, income, deductions, and credits belonged on the owner's return. Nexus of either the owner or LLC created Louisiana nexus for the corporation.
State
LA
Ruling
LA Revenue Ruling 03-006
Tax type
Corporation Income Tax
Issued
2003-12-08
Issued by
Louisiana Department of Revenue
Requested by
Not applicable; this Revenue Ruling provides general corporation income-tax guidance for single-member LLCs
Topics
single member llc disregarded entities federal conformity nexus corporate income tax
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 2003. Ask about yours and see what current Louisiana tax law says, with citations.

Currency note: this ruling is from 2003
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 2003 Louisiana Revenue Ruling that expressly assumes the single-member LLC did not elect federal corporate tax treatment. Entity-classification, nexus, and Louisiana conformity law may change, and an LLC with a corporate election falls outside the stated assumption. The ruling does not bind the public and states the Department's position only until later authority supersedes or modifies it.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A single-member LLC that had not elected federal corporate treatment was a disregarded entity and division of its corporate owner for Louisiana income-tax purposes.

The LLC's assets, liabilities, income, deductions, and credits were reported on the corporation's federal return and followed that treatment for Louisiana tax.

Nexus rule

The corporate owner computed Louisiana income tax like any other corporation. If either the corporation or its disregarded LLC had Louisiana nexus, the corporation had Louisiana nexus.

Limiting assumption

The ruling's historical note expressly assumed the single-member LLC had not elected to be treated as a corporation for federal income-tax purposes.

Common questions

Q: Did the LLC file as a separate corporation under the stated facts?

A: No. It was disregarded as a division of its corporate owner.

Q: Where were the LLC's tax items reported?

A: On the single corporate member's return.

Q: Did LLC nexus affect the owner?

A: Yes. Nexus of either entity created Louisiana nexus for the corporation.

Q: Did the ruling address an LLC that elected corporate treatment?

A: No. Its historical note excluded that situation.

Citations and references

  • La. R.S. 12:1368 — Louisiana treatment follows federal income-tax treatment
  • Treas. Reg. § 301.7701-2(a) — division of the owner
  • Treas. Reg. § 301.7701-3(b)(1)(ii) — single-member disregarded entity
  • LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

Original ruling text

Historical Note: For purposes of this Revenue Ruling, the assumption is made that the single member limited liability company has not elected to be treated as a corporation for federal income tax purposes.

Revenue Ruling
No. 03-006
December 8, 2003
Corporation Income Tax
Corporation Income Tax Treatment of Single Member LLCs

This Revenue Ruling addresses the corporate income tax treatment of single member limited liability companies (LLCs). Under the provisions of La. Rev. Stat. Ann. § 12:1368, the LLC is treated and taxed for state income tax purposes in the same manner that it is treated and taxed for federal income tax purposes. Under Internal Revenue Service Regulations § 301.7701-3(b)(1)(ii), a single member LLC is considered to be a “disregarded entity.” It is considered a division of its corporate owner under § 301.7701-2(a). All of its assets, liabilities, income, deductions, and credits are reported on the federal income tax return of its single member, the corporation. Therefore for state income tax purposes, the LLC is taxable as a “disregarded entity” and a division of the corporation. The corporation will compute its Louisiana income tax liability in the same manner as any other corporation. If either the corporation or the LLC has nexus with Louisiana, then there is nexus for the corporation. Cynthia Bridges Secretary By:

________
Bettye Winham
Revenue Tax Research Analyst
Policy Services Division

Revision History: December 8, 2003 (new document); June 14, 2004 (historical note added)

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on the public. It is a statement of the department's position and is binding on the department until superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

What does the law say today, for your facts?

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