Kean Miller Tax Attorneys Article Published in Tax Notes State

Kean Miller tax attorneys, Jaye Calhoun, Willie Kolarik, and Divya Jeswant's article, “Tennessee Budget Item Highlights Louisiana Franchise Tax Issue,” was published in Tax Notes State on March 25. Their article outlines how a constitutional infirmity in the Tennessee franchise tax may also apply to taxpayers subject to the Louisiana corporation franchise tax and create potential refund opportunities. Below is the beginning of the write-up. 

“Some Louisiana taxpayers may benefit from a constitutional infirmity in the state’s franchise tax on the same basis as a recently addressed constitutional infirmity in a comparable Tennessee law. This development creates a potential refund opportunity for those paying the Louisiana franchise tax on a similar basis. In particular, if a taxpayer is computing and remitting its Louisiana franchise tax based on the minimum allocation rule for the property factor, consideration should be given to filing refund claims for open years and taking protective positions going forward.

At least 80 taxpayers filed refund claims and asserted that provisions in the Tennessee franchise tax (comparable to Louisiana’s minimum allocation rule) violate the U.S. Constitution’s dormant commerce clause.  Rather than litigate the (existing and anticipated) refund claims, Tennessee is proposing an across-the-board legislative fix after the attorney general’s office agreed that the existing structure of the state’s franchise tax poses a significant legal risk.”

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