Louisiana Governor John Bel Edwards’ emergency declaration due to Hurricane Delta provides certain tax breaks to businesses and individuals. Do you or your business qualify?
Here are four main points of interest regarding this emergency declaration and related tax breaks.
- The emergency declaration will allow nonresident business or nonresident employees’ compensation for the performance of disaster or emergency-related services to be excluded from gross income. This compensation is free from Louisiana state income tax.
- The performance of disaster-related services will not create a physical presence or nexus requiring the nonresident to file a Louisiana income tax return.
- In order for businesses or individuals to qualify for this break, the work for disaster or emergency-related services must be performed between October 6, 2020 and January 3, 2021, and must be related to critical infrastructure within Louisiana.
- Any business registered in the State of Louisiana that intends to hire a nonresident business to perform disaster or emergency-related services during the emergency period must provide notice to the Louisiana Department of Revenue. The notice must contain:
- The name, address, and federal tax identification number of the nonresident business
- The date of the request to the nonresident business to perform disaster or emergency-related work
- The date and declaration number of the declared state disaster or emergency
- A general description of the disaster or emergency-related work requested
In addition, the notice must contain a representative’s contact information, be signed by an officer or owner of the resident business, and be submitted on the letterhead of the resident business. All such notices must be sent to the Department of Revenue as an e-mail attachment to Act358.Notices@la.gov.
If you are a resident business looking to hire a nonresident business, or if you a nonresident business or nonresident employee planning to perform disaster or emergency-related services in Louisiana, you should consult with experienced counsel to ensure you meet the requirements set forth by the Department of Revenue.
We will continue to provide updates on any related bulletins from the Louisiana Department of Revenue or any similar federal tax relief that is offered.