§244. Computation of net apportionable income from Louisiana sources

A. From the total gross apportionable income, as provided in R.S. 47:242(2), there shall be deducted all expenses, losses and other deductions except federal income taxes, allowable under this Chapter, which are directly attributable to such income, and there also shall be deducted a ratable portion of allowable deductions, except federal income taxes, which are not directly attributable to any item or class of gross income. The remainder shall be the total net apportionable income (or loss).

B. The net apportionable income derived from sources in this state shall be computed by multiplying the total net apportionable income by the Louisiana apportionment percent determined in accordance with the provisions of R.S. 47:245.

C. In lieu of the apportionment as provided in this Section, a taxpayer may apply to the collector for permission to compute the net apportionable income derived from sources in this state by means of the separate accounting method. The collector shall grant such permission if the taxpayer shows that the apportionment method produces a manifestly unfair result, and that the unit of the taxpayer's business operating in this state could be successfully operated independently of the units in other states, and makes all of its sales in this state or derives all of its gross revenues from sources in this state, and any merchandise or products sold by the unit in this state are either:

(1) Produced by the taxpayer in Louisiana,

(2) Purchased by the taxpayer from non-affiliated sources within or without this state,

(3) Purchased from an affiliated source at not more than the price at which similar merchandise or products in similar quantities could be purchased from non-affiliated sources, or,

(4) Transferred from another department of the taxpayer's business at not more than the actual cost to the taxpayer; or where it is otherwise shown to the satisfaction of the collector that the apportionment method produces a manifestly unfair result and that the separate accounting method produces a fair and equitable determination of the amount of net income taxable in this state.

D. If such permission is granted by the collector, the taxpayer shall compute the net apportionable income derived from sources in this state by means of a separate accounting method which shall comply with the regulations to be prescribed by the collector. When a taxpayer has secured permission to employ the separate accounting method, a change to the method of apportionment shall not be made for any subsequent year without securing the permission of the collector.

E. When the collector finds that the use of the apportionment method by a taxpayer produces a manifestly unfair result and that the separate accounting method would more equitably determine the amount of net income derived from sources in Louisiana, he may require that the separate accounting method be used in such case.

F. Whenever there is a contest between the taxpayer and the collector as to whether the separate accounting method or the apportionment method should be used, the burden shall be upon him who urges the use of the separate accounting method to show that the apportionment method produces a manifestly unfair result.

G. In any case where the secretary requires that a taxpayer change to the separate method of accounting, the secretary may, absent the negligence of the taxpayer and upon a showing of reasonable cause by the taxpayer, remit or waive payment of the whole or any part of any accrued interest which would be due from such taxpayer with respect to any additional taxes due as a result of the required change to the separate method of accounting. The secretary shall not waive any interest accruing thirty days after the first issuance to the taxpayer of a proposed assessment in connection with the change to the separate method of accounting.

Amended by Acts 1950, No. 445, §1; Acts 1970, No. 258, §8; Acts 1973, Ex.Sess., No. 8, §1; Acts 1986, No. 688, §1, eff. July 8, 1986.