State & Local Tax Impacts of COVID-19 for Louisiana – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Sep 09, 2021
SALT GOV COVID TW - 1

Information current as of August 31, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Louisiana

  • Due to COVID-19, Louisiana extended the suspension of sales and use exclusions for food service establishments from the food and beverage tax assessed by the Ernest N. Morial New Orleans Exhibition Hall Authority to the extent the prior calendar year’s gross annual receipts are considered in determining the exclusions for the taxes assessed in the 2021 calendar year.
    • Governor’s Proclamation No. 18-JBE-2021, effective January 13 through February 10, 2021.
    • Governor’s Proclamation No. 18-JBE-2021, effective February 10 through March 3, 2021.
    • Governor’s Proclamation No. 30-JBE-2021, effective March 3 through March 31, 2021.
    • Governor’s Proclamation No. 67-JBE-2021, effective March 31 through April 28, 2021.
    • Governor’s Proclamation No. 80-JBE-2021, effective April 28 through May 26, 2021.
    • Governor’s Proclamation No. 94 JBE 2021, effective May 26 through June 23, 2021.
    • Governor’s Proclamation No. 118 JBE 2021, effective June 23 through July 21, 2021.
    • Governor’s Proclamation No. 132 JBE 2021, effective July 21 through August 11, 2021.
    • Governor’s Proclamation No. 145 JBE 2021, effective August 6 through September 1, 2021.
  • Louisiana issued guidance on the state income tax implications of federal pandemic relief benefit payments. Direct economic impact payments to individuals under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the 2021 Consolidated Appropriations Act are refundable tax credits and aren’t considered taxable income for federal or state tax purposes. The federal weekly supplemental unemployment benefits for individuals are subject to Louisiana state income tax. The one-time rebate of $250 for eligible Louisiana frontline workers, authorized by Act 12, Laws 2020, is subject to Louisiana state income tax. Grants of up to $15,000 to eligible small businesses through a program administered by the Louisiana Department of the Treasury are subject to Louisiana state income tax. Paycheck Protection Program loans established under the CARES Act are forgivable under certain conditions, and the loan forgiveness isn’t taxable income for federal or state tax purposes.
    • Louisiana Department of Revenue, News Release; February 11, 2021.
  • Louisiana issued guidance on the federal unemployment benefits income tax exclusion for eligible individuals for the 2020 tax year under the American Rescue Plan Act of 2021 (ARPA). The ARPA created a retroactive tax provision to exclude the first $10,200 of unemployment benefits for a taxpayer if the taxpayer’s adjusted gross income is less than $150,000. For married individuals filing joint returns, the exclusion amount is $10,200 received by each spouse. The new $10,200 federal exclusion automatically applies to Louisiana taxpayers based on the automatic and conformed relationship of Louisiana income tax law to federal income tax law. Taxpayers who have already filed their 2020 federal and state return(s) should file an amended 2020 Louisiana return.
    • Louisiana DOR, Revenue Information Bulletin No. 21-008; March 26, 2021.
  • Louisiana legislation suspends the unemployment insurance solvency tax on employers for individual income and corporate income tax purposes through the 60th day after final adjournment of the 2021 Regular Session of the Legislature of Louisiana.
    • Louisiana S.C.R. 1437, effective October 23, 2020.
  • Louisiana will permit an individual to voluntarily elect to have state income taxes withheld at a rate of 4 percent from unemployment insurance benefits when a temporary increase in federal emergency unemployment insurance is in effect. Withholding from unemployment insurance must be voluntary to conform with federal requirements.
    • Louisiana Workforce Commission Emergency Reg. §40:IV.383, effective April 26, 2021, through the earlier of June 25, 2021, or adoption of a final rule.
  • Louisiana legislation exempts from corporate or individual income tax any gratuitous grant, loan, rebate, tax credit, advance refund, or other qualified disaster relief benefit provided directly or indirectly by the state or federal government as a COVID-19 relief benefit if included in federal gross income. This provision isn’t applicable to any unemployment compensation benefits provided to a taxpayer. The exemption applies both retroactively and prospectively.
    • Louisiana S.B. 11, effective June 4, 2021.
  • Louisiana legislation exempts nonresidents from Louisiana individual income tax liability if they perform employment duties in the state for 25 or fewer days. The exemption doesn’t apply to professional athletes, staff members of professional athletic teams, professional entertainers, public figures, or qualified motion picture production employees. Further, an employer isn’t required to withhold taxes on wages that are paid to such employees. If, during the calendar year, the number of days an employee spends performing employment duties for the employer and any entity related to the employer in Louisiana exceeds the 25-day threshold, the employer must withhold and remit tax for every day in that calendar year, including the first 25 days during which the employee performed duties in Louisiana.
    • Louisiana Act 383 (S.B. 157), enacted June 16, 2021, and applicable beginning January 1, 2022.
  • Louisiana issued an explanation on the taxability of benefits received from the Louisiana Main Street Recovery Grants and the Frontline Workers COVID-19 Hazard Pay Rebate Program. The clarification points out that Louisiana law allows for a tax exemption for all state and federal COVID-19 relief benefits, as well as the retroactive and prospective application of the tax exemption. Lastly, the guidance details the process for corporations, individuals, and flow-through entities to claim the exemption for tax year 2020. 
    • Louisiana DOR, Revenue Information Bulletin 21-019; July 23, 2021.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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