On March 27, 2026, the Louisiana Department of Revenue issued Revenue Information Bulletin No. 26-011 (“RIB 26-011”), providing important administrative guidance on recent legislative changes to Louisiana’s inventory tax credit (“ITC”) under La. R.S. 47:6006. The bulletin addresses statutory amendments enacted in Act 11 of the 2024 Third Extraordinary Session and Act 412 of the 2025 Regular Session, both of which modify the ability of taxpayers to use the ITC beginning in the 2025 tax year.
Most notably, taxpayers taxed as C corporations for federal income tax purposes, as well as estates and trusts subject to Louisiana income tax, will be prohibited from earning the credit for ad valorem taxes paid on or after July 1, 2026. A narrow exception applies to certain cooperatives that issue patronage dividends, provided appropriate federal reporting is attached. On the other hand, pass-through entities, including S corporations and partnerships, remain eligible to earn the credit, regardless of whether a pass-through entity tax election has been made under La. R.S. 47:287.732.2.
The bulletin also addresses changes to the monetization of the credit. For C corporations, ITCs generated during the transitional period from January 1, 2025, through June 30, 2026, will be nonrefundable, although unused credits may be carried forward for up to ten years. Importantly, RIB 26-011 provides additional relief for legacy credits. Taxpayers that will be barred from earning new credits after July 1, 2026, are granted an extended carryforward period for previously earned credits, effectively allowing up to a twenty-year carryforward for credits generated between 2015 and 2025, so long as those credits had not expired as of December 31, 2025.
Finally, the Department clarifies the interaction of these changes with Louisiana’s revised treatment of S corporations. In light of Act 382 of the 2025 Regular Session, Louisiana now conforms to federal treatment of S corporations as flow-through entities beginning in 2026. Consistent with that change, RIB 26-011 reiterates that ITCs earned by S corporations may only be utilized at the shareholder level, and must be reported on the applicable individual or fiduciary returns.
RIB 26–011 underscores a broader policy shift away from refundable inventory tax credits for corporate taxpayers and toward a more limited, pass-through-oriented regime. Taxpayers with significant inventory holdings should carefully evaluate the timing of ad valorem tax payments, the availability of transitional credits, and planning opportunities associated with entity classification and credit utilization before the July 1, 2026, cutoff. For more information, contact Liskow attorneys Bob Angelico, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page.