M&A Advisory in Louisiana

Under HB 10 (Act 11) and HB 2, effective 1/1/2025, Louisiana imposes a flat 3.0% individual income tax (down from 1.85%/3.5%/4.25% graduated) and a flat 5.5% corporate income tax (down from a three-bracket structure topping out at 7.5%), with a new $20,000 corporate standard deduction and an optional 100% bonus depreciation election. The PTE election under R.S. 47:287.732.2 is now conformed to the flat 3% rate per RIB 26-007; however, Act 382 of 2025 prohibits S-corps filing composite returns from electing PTET for periods beginning on/after January 1, 2026.

Louisiana's signature M&A benefit — the net capital gains deduction under R.S. 47:293(9)(a)(xvii) and (10) (up to 100% deduction for sales of equity interest in non-publicly traded businesses commercially domiciled in Louisiana held ≥5 years) — was repealed entirely by Act 11 of the 2024 Third Extraordinary Session for taxable periods beginning on/after 1/1/2025 (confirmed by LDR FAQ). Sellers who closed qualifying transactions before 1/1/2025 may continue claiming the deduction on pre-2025 installment recognition; all post-2025 sales are taxed at the flat 3% rate with no exclusion. This is the single most material adverse M&A change in the 2025 reform.

Louisiana is a rolling-conformity state fully conforming to IRC §1202 (La. R.S. 47:287.65 and 47:287.701(A)). Post-OBBBA (signed July 4, 2025), QSBS acquired after that date enjoys enhanced tiered exclusion (50% at 3 years, 75% at 4 years, 100% at 5+ years), a $15M (or 10× basis) per-issuer cap, and a $75M aggregate gross asset threshold — all flowing through to Louisiana. For founders who recapitalized into a C-corp structure, QSBS planning is one of the few remaining tools producing meaningful state-level exit benefit now that R.S. 47:293(9)(a)(xvii) is repealed.

Louisiana's state sales/use tax rose from 4.45% to 5.0% effective 1/1/2025 (scheduled to step down to 4.75% on 1/1/2030). Combined with local parish/municipal rates averaging 5.11%, Louisiana now has the highest combined state+local sales tax rate in the nation at 10.11% (Tax Foundation 2026). Louisiana imposes successor liability for unpaid state sales/use, withholding, and corporate income taxes under R.S. 47:308, making an LDR tax clearance letter and Form R-5604 bulk-sale procedures a standard closing condition — standard 5-to-10% escrow held pending clearance.

Louisiana imposes no state estate tax and no inheritance tax (only the federal estate tax applies; $13.99M exemption in 2025). However, Louisiana remains the only U.S. civil-law state and retains forced heirship under La. Civ. Code arts. 1493 et seq.: children under age 24 (or permanently incapable of self-care) are entitled to a mandatory "legitime" — 25% of the estate if one forced heir, 50% if two or more — which cannot be defeated by testament absent just cause. Voting-control trusts, buy-sells, and pre-closing gifts must be structured around forced-heir claims, surviving-spouse usufruct (art. 890), and community-property presumptions (art. 2335).

The Industrial Tax Exemption Program (ITEP), under 2025 Rules effective 3/20/2025, provides manufacturers (NAICS 31/32/33) with 80% local ad valorem abatement for an initial 5 years (renewable for 5 more), with 93–100% "Mega-Project" rates for capital investments ≥$500M; Landry-era rules removed the job-creation requirement. The Quality Jobs Program provides cash rebates of 5–6% of annual payroll for up to 10 years plus either a 4% state sales/use tax rebate on capex or 1.5% project facility expense rebate — statutorily sunset June 30, 2025 (existing contracts honored for 10-year life). Both programs survive change of control if properly assigned via the LED FLNG portal.