Certain corporations must pay or may receive interest under the look-back method when a long-term contract is completed or amounts are later taken into account.
§287.445. Special adjustment for long-term contracts A. General. Notwithstanding any provision to the contrary in this Chapter, any corporation that uses the percentage of completion method prescribed in 26 U.S.C.A. §460 shall upon completion of the contract, or, with respect to any amount properly taken into account after completion of the contract, when such amount is so properly taken into account, pay or shall be entitled to receive interest computed under the look-back method of Subsection B. B. Look-back method. The interest computed under the look-back method of this Subsection shall be determined as follows: (1) First, allocating income under the contract among taxable years in accordance with the provisions of 26 U.S.C.A. §460(b)(2)(A). (2) Second, determine solely for purposes of computing such interest, the overpayment or underpayment of Louisiana corporate income tax for each taxable year referred to in Paragraph (1), which would result solely from the application of Paragraph (1), and (3) Then, applying the rate of interest established by R.S. 47:1624 to the overpayment or underpayment determined under Paragraph (2). C. S corporations. With respect to a corporation which for a taxable year is classified as an S corporation, the principles of I.R.C. Section 460(b)(4)(A) shall apply with respect to its excludible percentage of Louisiana net income attributable to any long-term contract, there shall be no exceptions for S corporations which are closely held pass-through entities and "highest rate" shall mean the highest rate of tax specified in R.S. 47:32. Acts 1992, No. 588, §1; Acts 2002, No. 51, §1, eff. Jan. 1, 2003.