future-focused

Three CCS Bills Prefiled for 2026 Louisiana Regular Session

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Speaker Pro Tempore Mike Johnson filed three CCS bills on January 12, which was the first day to prefile legislation for the Louisiana legislature’s 2026 Regular Session. Here’s a brief description of each:

  • HB 5 Authorizes parish governing authorities and citizens to determine whether Class VI injection wells, carbon dioxide sequestration, and carbon dioxide pipelines may be permitted within a parish.
  • HB 6 Authorizes the governing authority of Rapides Parish to determine whether carbon dioxide sequestration and pipelines transporting carbon dioxide may be permitted within the parish
  • HB 7 Enacts the Louisiana Landowners Protection Act, which repeals the CCS unitization statute and removes expropriation authority for CCS projects and carbon dioxide pipelines.

The Louisiana legislative regular session for 2026 is scheduled to begin on March 9.

For further inquiries, reach out to Liskow attorney and Louisiana Lobbyist Neil Abramson and CCS attorney Jeff Lieberman and visit our Carbon Capture & Storage practice page.

Louisiana’s New Combined State and Local Sales Tax Return Set to Be Available for Filing on February 1, 2026

3 minute read

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Louisiana’s new Combined State and Local Sales and Use Tax return is targeted for implementation on February 1, 2026, for reporting January 2026 sales according to the Louisiana Uniform Local Sales Tax Board (LULSTB).   The Parish E-File portal used by businesses to report and pay their local sales and use taxes has been significantly reorganized.

The combined return allows each physical location of a business entity to report all Louisiana state and local sales and purchase activity on one uniform return. By filing one combined return, Parish E-File will submit a business’s Louisiana state and local sales tax returns to the appropriate taxing authorities.

There remain other filing options, which include the following:

LaTAP – State Returns Only

Businesses may continue to file Louisiana state sales tax returns through LaTAP. However, if a taxpayer chooses to file local returns using the combined return on Parish E-File, all state sales information must still be entered as part of the combined return—even if the state return itself is filed separately on LaTAP.

Sales Tax Online

Businesses may continue to file Louisiana sales and use tax returns through Sales Tax Online; taxpayers should be aware, however, that seven parishes (Allen, East Baton Rouge, East Feliciana, Orleans, St. James, Terrebonne and Washington Parishes) do not allow use of this system.

Paper Returns

Paper returns may still be mailed to most local tax collectors; however, the four parishes of Ascension, Lafourche, Rapides, and St. Helena require electronic filing of sales and use tax returns.

There are several important considerations regarding the new combined Louisiana State Sales and Use Tax Return, which are:

•            This combined return will replace the current single-jurisdiction and multi-jurisdiction returns available in Parish E-File.

•            All state and local accounts included in the combined return must have the same filing frequency.

•            A reconciliation feature within this system requires total state sales to match combined local sales.

•            If errors cannot be resolved timely, another filing method must be used.

•            Penalty and interest will apply to late filings.

To include all Louisiana state and local sales tax accounts in the Combined Return, businesses should log into Parish E-File and add each physical location with all associated state and local account numbers. Parish E-File will assign a Master Location Number for internal use only.

All state and local accounts must have matching filing frequencies before the combined return can be filed. Frequency updates can be made on the existing Parish E-File system under My Returns → Return Setup → Return Information Table and must be approved by the appropriate taxing authorities.  In addition, business taxpayers need to contact the local taxing authorities to request this change.

If a business in Louisiana files returns using an EDI import, changes to the taxpayer’s import files may be required as they will not be compatible with the new combined return system. Updated import specifications and instructions are available on the LULSTB’s website.

Payment of Louisiana Sales and Use Tax

Sales tax payments will continue to be remitted separately to each individual taxing authority in Louisiana.  Presently, a single, combined payment option is not available through Parish E-file. 

Informational videos and other resources regarding the new filing option are available on LULSTB’s website.

It is recommended that Louisiana taxpayers access the new portal ahead of their usual filing date to set up their account within the system. It is anticipated that it will take a certain amount of time to set up the account.

Pursuant to Act No. 375 of the 2023 Regular Session of the Louisiana Legislature, the LULSTB was tasked with the development of a single, combined state and local sales and use tax return to allow taxpayers to report all sales and use taxes owed to the State of Louisiana and every parish jurisdiction on one combined return. The goal is to create a simplified state-level collection system for remote sellers to collect and remit state and local sales taxes that is compliant with the decision by the U.S. Supreme Court in South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018).

In holding that the “physical presence” rule for purposes of determining whether a state can force a remote seller with no physical presence in a state or a locality to collect and remit sales taxes, the Court in Wayfair explained that complex state and local sales tax systems could have the effect of unduly burdening or discriminating against interstate commerce, notwithstanding the issue of nexus.  While physical presence may no longer be required to establish nexus, the Court stated that other Commerce Clause principles can invalidate a state or locality’s sales tax scheme in cases where taxing jurisdictions impose undue burdens on interstate commerce or discriminate against interstate commerce.

For more information, contact Liskow attorneys Caroline Lafourcade, Bob Angelico, and Kevin Naccari, and visit Liskow’s Tax Practice page. 

The combined return allows each physical location of a business entity to report all Louisiana state and local sales and purchase activity on one uniform return. By filing one combined return, Parish E-File will submit a business’s Louisiana state and local sales tax returns to the appropriate taxing authorities.

Tax Court Revokes Exempt Status for Failure to Satisfy the Section 501(c)(3) Operational Test

3 minute read

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The United States Tax Court recently issued a Memorandum Opinion in Milk Saving Starving Children Foundation v. Commissioner, T.C. Memo. 2026-1, highlighting the operational test under Internal Revenue Code (I.R.C.) section 501(c)(3). Granting the Commissioner’s motion for summary judgment, the Court sustained the revocation of the organization’s tax-exempt status after concluding that it failed to operate “exclusively” for exempt purposes. The decision highlights the significant risks faced by charitable organizations whose actual operations diverge from their stated charitable missions.

The Milk Saving Starving Children Foundation, incorporated in Pennsylvania in 2001, applied for tax-exempt status as a public charity that would raise funds to purchase rice, soy, and powdered milk for worldwide distribution to starving children. Based on these representations, the IRS granted recognition of exemption under section 501(c)(3).

The administrative record, however, revealed that the Milk Saving Starving Children Foundation failed to operate in furtherance of their exempt purpose. Shortly after applying for exemption, the organization acquired real property and began operating a cash-only coffee shop known as “Café Beignet,” an activity not disclosed in its exemption application. In addition to operating the café, the organization leased portions of the property to unrelated commercial tenants, including restaurants and pizza shops.

The record further showed that charitable activity was minimal and eventually ceased. While the organization donated a small amount of powdered milk in 2001, milk distributions stopped entirely by 2011. Charitable distributions resumed only in 2020, after the IRS began examining the organization’s 2018 tax year. In the audited tax year, the organization reported income from rental activity, fundraising events, and café sales, but none of its expenses were devoted to its stated charitable mission. Instead, expenditures consisted primarily of mortgage payments, insurance, property-related costs, and loans to the organization’s incorporator. No funds were spent on rice, soy, or powdered milk during the year under examination.

Following the issuance of a Final Adverse Determination Letter revoking tax-exempt status effective July 1, 2017, the organization sought declaratory relief in the Tax Court. The petitioner asserted that it received substantial public support and remained compliant with section 501(c)(3). When the Commissioner moved for summary judgment, the Court afforded the petitioner additional time to respond. Despite this extension, the petitioner failed to file any response or submit evidence disputing the Commissioner’s factual assertions.

The Court’s analysis focused on the operational test set forth in Treasury Regulation § 1.501(c)(3)-1(a)(1). To qualify for and maintain exemption, an organization must be both organized and operated exclusively for one or more exempt purposes. Although “exclusively” does not mean “solely,” the presence of a single substantial nonexempt purpose is sufficient to defeat exemption, regardless of the number or importance of any exempt activities.

Under the regulations, an organization fails the operational test if more than an insubstantial part of its activities does not further an exempt purpose. The Court reiterated that the critical inquiry is the purpose toward which an organization’s activities are directed, not merely the nature of the activities themselves. Even “commercially benign” or “socially commendable” activities will not support exemption unless they are conducted in furtherance of an exempt purpose.

Because the petitioner failed to respond to the Commissioner’s motion, the Court treated the Commissioner’s factual assertions as undisputed. The Court concluded that the organization did not operate exclusively for exempt purposes during the years at issue. The opinion emphasized that the petitioner had ceased meaningful charitable activity for several years and only resumed limited milk distributions after facing the prospect of revocation.

The record demonstrated that the organization engaged almost entirely in commercial activity, including operating a café, leasing property to unrelated businesses, and managing real estate investments. Despite generating income, the organization made no charitable expenditures in 2018 and used its funds for property-related costs and insider loans. The petitioner failed to establish any nexus between its commercial activities and the furtherance of its stated charitable mission.

The Tax Court held that the administrative record clearly demonstrated that the Milk Saving Starving Children Foundation failed the operational test under section 501(c)(3). Because the organization was not operated exclusively for exempt purposes, the Court sustained the IRS’s revocation of tax-exempt status and found it unnecessary to address the organizational test.

This decision serves as a reminder for nonprofit organizations and their advisors that statements of charitable intent in exemption applications are insufficient on their own. To maintain exempt status, organizations must substantially operate in furtherance of their exempt purposes, and commercial activities must be demonstrably connected to those purposes. If you have questions about this update or require assistance with your tax-exempt organization, please contact Liskow attorneys Leon Rittenberg III, John Rouchell, Caroline Lafourcade, and Kevin Naccari and visit our Tax practice page. 

Tax Court Highlights Severe Consequences of Late Estate Tax Filings and Inadequate Substantiation

4 minute read

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In Estate of Spenlinhauer v. Commissioner, the U.S. Tax Court addressed several estate tax issues arising from an extraordinarily late-filed estate tax return, ultimately sustaining a substantial deficiency, penalties, and transferee liability against the executor. The decision underscores the importance of statutory filing deadlines, the rigorous substantiation standards governing estate tax deductions, and the personal exposure executors face when estate assets are distributed before tax liabilities are resolved.

Georgia M. Spenlinhauer died in February 2005, leaving her son, Robert J. Spenlinhauer, as executor and residuary beneficiary. Although the estate obtained an extension to file Form 706 until May 2006, no return was filed by that deadline. Despite consulting an accountant who expressly advised that estate tax compliance was outside his expertise, the executor failed to engage qualified estate tax counsel or file the required return. The omission persisted for more than a decade.

The IRS became aware of the unfiled return during Robert Spenlinhauer’s personal bankruptcy proceedings in 2013. The estate tax return was not ultimately filed until February 2017, nearly eleven years late, by which time the estate’s assets had been fully distributed to the executor. The IRS issued a notice of deficiency asserting nearly $4 million in estate tax, additions to tax for failure to file, and transferee liability against the executor personally.

A central issue in the case was the estate’s attempt to claim elections that are expressly conditioned on timely filing. The estate sought to use the alternate valuation date under Section 2032 and a qualified conservation easement exclusion under Section 2031(c). The Court held that both elections were irrevocably lost because Form 706 was not filed by the statutory deadline, including extensions.

The Court emphasized that Congress imposed strict time limitations on these elections, and once those deadlines lapse, the estate is barred from invoking them. As a result, the gross estate was required to be valued as of the decedent’s date of death, with no conservation easement exclusion available.

The case also involved substantial valuation disputes concerning real estate and a minority interest in a closely held family business. With respect to the decedent’s residence, the estate relied on local property tax assessments to support a significantly reduced value. The Court rejected that approach, reiterating that assessed values are not controlled for federal estate tax purposes unless they reflect fair market value. The Court credited the IRS’s expert appraisal and noted that the executor’s own prior appraisal undermined his valuation position.

Similarly, the Court sustained the IRS’s valuation of a one percent interest in a family printing company. Evidence showed that the executor had rejected purchase offers far in excess of the value later reported on the estate tax return. The Court found that these actions contradicted the estate’s claimed valuation and demonstrated that even the executor did not believe the reported figures were accurate at the time.

The Court also addressed whether property transferred during the decedent’s lifetime should be included in the gross estate under Section 2036. One property had been transferred to the executor in exchange for a promissory note, but the decedent continued to reside in the property until death. The estate failed to substantiate that payments were actually made on the note, relying instead on estimates and testimony unsupported by documentation.

The Court found that the transaction did not constitute a bona fide sale for adequate consideration. That conclusion was reinforced by a late amendment to the note adding a self-canceling feature shortly before the decedent’s death. The Court observed that intra-family self-canceling notes are presumptively suspect and concluded that the parties could not reasonably have expected repayment in full. Accordingly, the full value of the property was included in the taxable estate.

The estate also failed to substantiate claimed deductions for executor’s commissions, legal fees, and litigation expenses under Section 2053. The Court disallowed executor commissions outright due to the absence of supporting evidence. It further denied deductions for litigation costs incurred in disputes over corporate valuation, concluding that those expenses primarily benefited the beneficiary rather than the estate and were therefore nondeductible.

The Court sustained additions to tax for failure to timely file the estate tax return. The executor’s reliance on an accountant did not constitute reasonable cause, particularly where the accountant had expressly disclaimed estate tax expertise and the executor failed to provide critical valuation information. The Court reaffirmed that reliance defenses fail when the taxpayer does not exercise ordinary business care or seek advice from a competent professional.

Finally, the Court held the executor personally liable as a transferee under Section 6901. Applying Massachusetts fraudulent transfer law, the Court found that the executor had distributed all estate assets to himself while an unpaid estate tax liability existed, rendering the estate insolvent. Because the government’s claim arose by operation of law on the estate tax filing deadline, the IRS was a creditor at the time of the transfers. The executor was therefore liable up to the value of the assets he received.

Estate of Spenlinhauer illustrates how procedural failures can lead to severe adverse tax consequences. Late filing foreclosed valuable elections, unsupported valuations and deductions were rejected, and informal intra-family transactions failed to withstand scrutiny. Most notably, the case serves as a cautionary reminder that executors who distribute estate assets before resolving tax obligations risk personal liability. Estate administration demands timely compliance, careful documentation, and professional guidance, and failing to comply with any of these requirements can prove extraordinarily costly.

For more information, contact Liskow attorneys Leon Rittenberg III, John Rouchell, Caroline Lafourcade, and Kevin Nacarri Jr., and visit Liskow’s Tax Disputes page. 

TIME CRITICAL POSTMARK?  NEW USPS REGULATIONS

2 minute read

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By notice published in the Federal Register on November 24, 2025, the United States Postal Service (the “USPS”) added a Section 608.11 (“Section 608.11”) to its Domestic Mail Manual (the “DMM”) effective as of December 25, 2025, to clarify (or some would say, to revise) when an item is “postmarked” under the DMM. These regulations have potential impacts on commercial contracts, tax filings, and voting rights, among other issues. The text of the notice is available here.

Section 608.11 emphasizes that a matter is not “postmarked” when it is delivered to a retail post office or inserted into a mailbox. Rather, an item is “postmarked” only when it is processed at a processing location. This can have oversized effects in rural areas, which may be many miles from a processing location, but even in urban areas, the date of processing can be one or more days after delivery to the retail location. Section 608.11 offers advice to anyone who must be certain of a postmarked date, including having an item hand-stamped in a retail postal location, utilizing registered or certified mail, or purchasing a certificate of mailing.

While Section 608.11 has raised concerns about the time that a mail-in ballot is “postmarked” it has effects beyond voting rights issues. Consumers who pay bills by mail may incur penalties for late payment if they simply deposit mail in a receptacle (either free standing or at a retail postal facility) on the last day of the due date of their invoice. Additionally, there are a number of issues under which a right or obligation under the Federal Tax Code will be impacted. For instance, under 26 U.S. Code § 7502, timely mailing tax returns and other documents is treated as timely mailing. Pursuant to this statute, timely mailing is proved by the postmark date. Thus, under the new USPS rules, just putting a tax return in the US mail before the date it is due will not suffice because one has no idea what date will actually be shown as the postmark. Similarly, the date of a postmarked petition to the United States tax court or of an objection may determine whether an objection to a tax assessment is timely filed or will be dismissed. See, Thomas v Com’r, United States Tax Court, March 11, 2020, T.C. Memo. 2020-33, 2020 WL 1181811.

Commercial contracts that stipulate how and when notices, demands, and other actions must be taken, such as exercise of options in leases and purchase and sales agreements and termination of due diligence periods in commercial agreements should be reviewed. Commercial parties can stipulate how time periods, notices, and other actions will be governed and are not necessarily constrained by the rules of the DMM. However, without clarification as to the meaning of “postmarked” it is possible that the terms of Section 608.11 will be applied in a dispute under a commercial contract. If there are concerns about the potential uncertainty of the date of a postmarked mailing, parties may consider alternative delivery means, such as electronic mail or overnight express delivery services.

For more information regarding this notice, contact Liskow attorneys Marilyn Maloney, Leon Rittenberg III, and Paul Kitziger, and visit Liskow’s Tax Disputes page.

Louisiana Employers Must Display Updated Unemployment Insurance Poster

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Louisiana Works (formerly known as the Louisiana Workforce Commission) issued an updated Unemployment Insurance poster, effective December 31, 2025, reflecting key changes to unemployment insurance eligibility and requirements under Act 151 passed during the 2025 Regular Legislative Session.

A central change highlighted on the new poster is an increase in required weekly work search activities for individuals claiming unemployment benefits.  For new claims filed on or after January 4, 2026, claimants must complete five valid work search actions each week, up from the previous requirement of three valid work search actions each week.  Valid work search activities include applying for jobs, attending interviews, updating a resume, or participating in job search or training programs.

Louisiana employers can download the updated poster here and should display it alongside other mandatory workplace postings where all employees can easily see it as soon as possible. 

For further questions regarding this update, contact Liskow attorneys Ellie George and Thomas McGoey and visit our Labor & Employment practice page.

Cryptocurrency Reporting Enters a New Phase with Form 1099-DA

2 minute read

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Cryptocurrency investors are preparing to enter a very different tax reporting environment as the first wave of Forms 1099-DA are issued for digital asset transactions. These forms, expected to arrive in early 2026, represent the federal government’s first comprehensive attempt to standardize third-party reporting of cryptocurrency activity and align digital asset compliance more closely with traditional securities reporting.

Form 1099-DA is designed to summarize gross proceeds from certain digital asset transactions and will be furnished both to taxpayers and the Internal Revenue Service (“IRS”). For the first time, exchanges, brokers, and payment platforms facilitating cryptocurrency transactions will be required to provide transaction information directly to the IRS, significantly expanding information reporting in the digital asset space. While policymakers have prioritized cryptocurrency compliance for several years, the introduction of standardized reporting statements marks a fundamental shift in enforcement and audit risk for investors.

Despite the importance of the new forms, awareness among taxpayers remains limited. Tax professionals anticipate that many investors will be surprised by the volume and content of these statements, particularly where the reported information does not fully reflect the taxpayer’s actual gain or loss. Because the forms will report gross proceeds rather than net taxable income, taxpayers may need to reconcile discrepancies arising from incomplete transaction histories, transfers between wallets, or activity across multiple platforms.

The reporting framework stems from provisions enacted as part of the Infrastructure Investment and Jobs Act of 2021, enacted in response to the rapid growth of cryptocurrencies, nonfungible tokens, and other digital assets. Final Treasury and IRS regulations issued in August 2024 treat digital asset brokers in a manner similar to securities brokers and establish a phased compliance regime over several tax years.

For tax year 2025, the reporting obligation will apply to cryptocurrency exchanges, fintech platforms, and other entities that facilitate digital asset transactions. These entities must report gross proceeds from taxable crypto sales and provide Form 1099-DA to taxpayers by February 17, 2026. The IRS has indicated that transitional relief from penalties will be available for brokers making good-faith efforts to comply during the initial rollout.

Notably, the initial reporting regime does not require brokers to report cost basis. Unlike Form 1099-B for securities transactions, which reflects both proceeds and basis, Form 1099-DA will not include acquisition cost information for the upcoming filing season. Cost basis reporting for certain covered digital assets is scheduled to begin with the 2026 tax year. As a result, taxpayers will remain responsible for tracking their own basis and calculating gains or losses, often across multiple exchanges and wallets. 

Adding to the complexity, federal reporting obligations do not displace state requirements. States may impose separate reporting thresholds, disclosure rules, and filing deadlines related to digital asset transactions, increasing the compliance burden for taxpayers and financial institutions alike.

As Form 1099-DA becomes part of the annual tax reporting landscape, taxpayers, brokers, and advisers should anticipate increased scrutiny and be prepared to devote additional time to reconciling reported information with underlying transaction data. Early preparation, careful recordkeeping, and coordination across platforms will be critical as the digital asset reporting regime continues to evolve. If you have any questions about this update, please contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit the firm’s Tax Practice page.  

EPA Issues “Compliance First” Memorandum, Shifting Enforcement Approach

2 minute read

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On December 5, 2025, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance (OECA) issued a memorandum that directs all EPA staff responsible for civil judicial and administrative enforcement activities to prioritize a “compliance first” approach to enforcement. 

The memorandum criticizes previous enforcement approaches which pursued findings of violation or orders that prolonged negotiations and delayed actual compliance. Going forward, however, the EPA’s primary focus in all inspection, investigation, and enforcement activities is “achieving and ensuring timely compliance.” The memorandum outlines six key factors that will guide EPA staff in their compliance-first operating framework:

  1. Compliance Assistance Toolkit. EPA will prioritize deployment of its “compliance assistance tools,” including proactive outreach, technical assistance, and training. EPA will also promote voluntary audits to encourage regulated entities to proactively identify and correct compliance issues. 

  2. State Partner Coordination. EPA will demonstrate “proper deference and support” to state and local leads who have primary jurisdiction over environmental programs, ensuring consistency in compliance determinations and in enforcement of federal environmental law.

  3. Open Communication. EPA will maintain transparent communication with states, tribes, and regulated entities in order to avoid duplicative enforcement activities and unnecessary contradictions. EPA will also operate a “no surprises” framework by maintaining open communication with regulated entities throughout the inspection and enforcement process.

  4. Finding of Violation. Findings of violation must be “clear and unambiguous, well-tailored, and based on the ‘best reading’ of the relevant statute and regulation,” which will expedite compliance and reduce time and expense in litigating interpretations that seek to broaden statutory or regulatory interpretations beyond plain meaning. If a regulated entity raises concerns regarding EPA’s application of a statute or regulation to its specific case, “such questions must be elevated immediately for further analysis.”

  5. Compliance Requirements and Injunctive Relief. When formal enforcement is necessary, the primary focus of the strategic negotiations and litigation must be achieving timely compliance in the most efficient and economic means possible. In particular, the memorandum notes that injunctive relief provisions “shall be based on the best, most defensible interpretation of the law,” and rescinds previous guidance on expansive injunctive relief remedies. The memorandum also mandates a pause on the use of Supplemental Environmental Projects (SEPs) in settlements.

  6. Reasoned Decision Making. When making decisions on noncompliance determinations and the appropriate means for achieving compliance, EPA must apply the “LEAPS” factors, using Law, Evidence, Analysis, Programmatic Impacts, and Stakeholder Impacts to “ensure sound and responsive decisions.” 

The memorandum is effective immediately and applies to all ongoing and future civil and administrative enforcement matters. Notably, the memorandum states that it is not legally binding but is rather “intended to improve the internal management of EPA.”

For more information, please contact Liskow attorneys Greg Johnson, Clare Bienvenu, Emily von Qualen, and Colin North, and visit Liskow’s The Louisiana Industrial Insights Hub. 

 

"This policy reinforces prioritizing environmental compliance across all OECA civil judicial and administrative enforcement activities in the most efficient, most economical, and swiftest means possible, while ensuring that our actions align with the clearest, most defensible interpretations of our
statutory and regulatory mandates."

files.passle.net/…

LDR Clarifies Pass-Through Treatment for S Corporations Under Act 382

3 minute read

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The Louisiana Department of Revenue (“LDR”) has issued Revenue Information Bulletin 25-032 to provide guidance on changes to the state’s taxation of S corporations enacted by Act 382 of the 2025 Regular Legislative Session. Effective for income tax periods beginning on or after January 1, 2026, Act 382 amends La. R.S. 47:287.732 to align Louisiana’s treatment of S corporations with federal law by recognizing them as pass-through entities for Louisiana income tax purposes.

Prior to Act 382, Louisiana did not automatically follow federal flow-through treatment for S corporations. Instead, S corporations were generally taxed as C corporations unless they affirmatively elected an S corporation exclusion under prior law. Income excluded under that election was taxed at the shareholder level, while any remaining income was subject to Louisiana corporation income tax. Act 382 eliminates this dual system. Beginning in 2026, all income, losses, deductions, and credits of an S corporation automatically pass through to shareholders, and no special election is required to achieve pass-through treatment (unless a pass-thru entity election is filed).

The bulletin distinguishes filing requirements based on the applicable taxable period. For taxable periods beginning in 2025 and earlier, S corporations remain subject to the pre-Act 382 rules and must file LDR Form CIT-620, Louisiana Corporation Income Tax Return, reporting corporate-level tax unless the S corporation exclusion election is made. For taxable periods beginning on or after January 1, 2026, S corporations are no longer subject to Louisiana corporation income tax. Instead, they must file an informational return. Although Form CIT-620 is still required to compute allocation and apportionment, it is informational only, and the shareholders, rather than the corporation, are responsible for reporting and paying Louisiana tax on their distributive shares on their individual or fiduciary returns. Both the informational return and any composite return must be filed electronically.

Act 382 also changes Louisiana’s treatment of Qualified Subchapter S Subsidiaries (“QSubs”). For taxable periods beginning on or after January 1, 2026, Louisiana follows the federal approach and treats QSubs as disregarded entities automatically. As a result, all income, losses, deductions, and credits of a QSub are reported on the parent S corporation’s return, without the need for a separate election.

Although S corporations are now treated as flow-through entities, Louisiana law continues to permit the filing of composite returns on behalf of nonresident shareholders. Beginning in 2026, an S corporation may file a composite return by indicating “S corporation composite filing” on the face of Form CIT-620 and completing the required schedules. When a composite return is filed and tax is paid on behalf of nonresident shareholders whose only Louisiana income is from the S corporation, those shareholders are not required to file separate Louisiana income tax returns. However, if the S corporation has a net loss, a composite return is not permitted, and each shareholder must report their share of the loss on an individual Louisiana return.

The bulletin also addresses the interaction between composite filings and Louisiana’s pass-through entity tax election. An S corporation may still elect to be taxed as a C corporation under La. R.S. 47:287.732.2, but it may not combine that election with a composite return for the same taxable period. Similarly, an S corporation that files a composite return and makes composite payments for nonresident shareholders may not also make the pass-through entity tax election for that period.

Finally, Revenue Information Bulletin 25-032 clarifies estimated tax obligations. Because S corporations are no longer subject to Louisiana corporation income tax, they are not required to make estimated payments. However, an S corporation expecting to file a composite return may voluntarily make estimated payments following the procedures applicable to C corporations. If no composite payments are made, each nonresident shareholder remains responsible for making estimated Louisiana income tax payments on their share of S corporation income.

RIB 25-032 provides important practical guidance on compliance with Act 382. S corporations and their shareholders should review these changes carefully to ensure proper reporting, payment planning, and coordination with composite and pass-through entity elections beginning in the 2026 tax year. If you have any questions about this update or any of the other recent Louisiana tax changes, please contact Liskow attorneys Bob Angelico, Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit the firm’s Tax Practice page.  

EPA Guidance Reinforces That PFAS Should Be Considered in Phase I Environmental Assessments

2 minute read

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In December 2025, the U.S. Environmental Protection Agency (“EPA”) clarified that recipients of pending Brownfield grants must demonstrate that they are not liable for PFAS contamination under CERCLA. In 2024, EPA designated perfluorooctanoic acid (PFOA) or perfluorooctane sulfonic acid (PFOS), as well as their salts and structural isomers, as CERCLA hazardous substances under CERCLA. In September 2025, EPA announced that it would retain this designation and that it would defend its designation in the pending litigation challenge. 

To demonstrate that they are not liable under CERCLA for PFAS contamination, grant recipients will need to establish that liability protections, such as the bona fide prospective purchaser defense, are in place where PFOA or PFOS could be present. This requires conducting All Appropriate Inquiries that meet the current ASTM standards. Under the current standards for Phase I Environmental Site Assessments, purchasers must consider “conditions indicative of releases or threatened releases” of hazardous substances. This guidance now clarifies that this includes considering the potential presence of PFOA or PFOS, which could be indicated, for example, by a history of biosolids application or flammable liquid fires.

EPA’s guidance reinforces the need for potential site owners and developers seeking bona fide prospective purchaser status, as well as environmental professionals conducting Phase I assessments, to ensure PFAS contamination is considered as part of the Environmental Site Assessment, to ensure that the All Appropriate Inquiries standard is met.

For more information, contact Liskow attorneys Emily von Qualen and Clare Bienvenu, and visit Liskow’s Industrial Insights Hub.