On March 27, the Louisiana Department of Revenue issued guidance in RIB No. 26-011 on changes to the Inventory Tax Credit established during the 2024 Third Extraordinary Session and the 2025 Regular Session. The RIB reiterates that C corporations will no longer earn inventory tax credits (ITC) for ad valorem taxes paid on or after July 1, 2026, and that and that ITCs earned on ad valorem taxes paid from January 1, 2025, through June 30, 2026, are nonrefundable. One bit of good news is that the carryforward period for ITCs was extended an additional 10 years.
The RIB also reiterates that S corporations and other entities taxed as partnerships for federal income tax purposes, regardless of whether a pass-through election had been made, can continue to earn ITC, and may continue to claim them on the appropriate return. In addition, the RIB explains the filing requirements for an S corporation utilizing the ITC for periods on or after January 1, 2026, including that the entire amount of the ITC claimed will “flow through” to the shareholders and reported on their individual returns.
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