Taxpayers may elect bonus depreciation or bonus amortization for certain property and research expenditures, subject to the section’s limits and filing rules.
§287.744. Tax deduction; election; bonus depreciation and amortization A. General. For purposes of computing net income for taxable years beginning on or after January 1, 2025, there shall be allowed a deduction, at the election of the taxpayer, from federal gross income for costs of qualified property, qualified improvement property, and research and experimental expenditures, as provided in this Section. B. Definitions. For purposes of this Section, the following words shall have the following meanings: (1) "Bonus depreciation" and "bonus amortization" mean methods to recover costs for expenditures in depreciable or amortizable business assets by immediately deducting the cost of the expenditures in the tax year in which the property is placed in service or the expenditure is paid or incurred. (2) "Internal Revenue Code" means Title 26 of the United States Code and Title 26 of the Code of Federal Regulations, each as in effect on January 1, 2024. (3) "Qualified improvement property" shall have the same meaning as the term is defined in Section 168(e)(6) of the Internal Revenue Code. (4) "Qualified property" shall have the same meaning as the term is defined in Section 168(k) of the Internal Revenue Code. (5) "Research and experimental expenditures" shall have the same meaning as the term is defined by Section 174 of the Internal Revenue Code. C. Bonus depreciation for qualified property and qualified improvement property. (1) Expenditures for qualified property or qualified improvement property placed in service on or after January 1, 2025, shall be eligible for bonus depreciation and, if elected by the taxpayer, shall be deducted as an expense incurred by the taxpayer during the taxable year in which the property is placed in service. (2) If a taxpayer elects bonus depreciation for costs of qualified property or qualified improvement property, any depreciation claimed pursuant to this Section shall not duplicate any depreciation or bonus depreciation allowable on the federal income tax return of the taxpayer for the taxable year. (3) For taxable periods subsequent to the tax year in which the election has been made pursuant to this Section, federal gross income shall be increased by the amount of depreciation claimed under the Internal Revenue Code for the qualified property or qualified improvement property for which bonus depreciation has been claimed. (4) Costs of qualified property or qualified improvement property for which a taxpayer has elected bonus depreciation pursuant to the provisions of this Section shall be subject to recapture upon the sale or disposition of the property in accordance with Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code as in effect on January 1, 2024. D. Bonus amortization for research and experimental expenditures. (1) Research and experimental expenditures paid or incurred on or after January 1, 2025, shall be eligible for bonus amortization and, if elected by the taxpayer, shall be deducted as an expense incurred by the taxpayer during the taxable year in which the expenditure was incurred. (2) If a taxpayer elects bonus amortization for research and experimental expenditures, any amortization claimed pursuant to this Section shall not duplicate any amortization or bonus amortization allowable on the federal income tax return of the taxpayer for the taxable year. (3) For taxable periods subsequent to the tax year in which the election has been made pursuant to this Section, federal gross income shall be increased by the amount of amortization claimed under the Internal Revenue Code for research and experimental expenditures for which bonus amortization has been claimed. (4) Research and experimental expenditures for which a taxpayer has elected bonus amortization pursuant to the provisions of this Section shall be excluded from the basis of property related to the expenditures upon the sale or disposition of the property in accordance with Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code as in effect on January 1, 2024. E. Election. An election is made when a taxpayer timely files an original or amended Louisiana corporation income tax return with depreciation or amortization expensed in the calculation of Louisiana taxable income. F. Nothing in this Section shall be construed to allow as an expense the excess of one hundred percent of the cost of property or expenditures. The provisions of this Section shall not be construed to alter the treatment of expenses for any tax year beginning on or before January 1, 2024. G. Administration. The Department of Revenue may promulgate regulations in accordance with the Administrative Procedure Act as are necessary to implement the provisions of this Section. Acts 2024, 3rd Ex. Sess., No. 5, §1, eff. Jan. 1, 2025. NOTE: See Acts 2024, 3rd Ex. Sess., No. 5, §4, regarding applicability to franchise tax periods beginning on or after Jan. 1, 2026.