LLC vs S-Corp in Louisiana

The Louisiana Secretary of State handles entity formation. The IRS handles federal tax classification via Form 8832 and Form 2553. The Louisiana Department of Revenue administers corporate income and franchise taxes. A Louisiana LLC can elect to be taxed as an S corporation for federal purposes. Louisiana LLC basics. - Articles of Organization filed with the Louisiana Secretary of State. Verify the current filing fee on the Secretary of State business-services page. - Annual report filed with the Secretary of State on or before the anniversary date of formation. LLC annual report fee is $30. - Single-member LLCs default to disregarded entity for federal tax. Multi-member LLCs default to partnership tax. Either can elect S corp treatment with Form 2553. - Louisiana does not impose franchise tax on standard LLCs. If the LLC elects to be taxed as a corporation (C or S) for federal purposes, Louisiana treats it as a corporation and the corporation franchise tax applied for periods ending before January 1, 2026. Louisiana franchise tax repeal. - The Louisiana corporation franchise tax was repealed for franchise tax periods beginning on or after January 1, 2026. For periods that ended before that date, the franchise tax applied to corporations and to LLCs taxed as corporations. Louisiana income tax. - Louisiana has a graduated individual income tax. Confirm current rates with LDR. - Pass-through income from an LLC taxed as a partnership or disregarded entity flows to the owner's Louisiana individual return. - Louisiana now recognizes federal S corporation elections for state income tax purposes; income passes through to shareholders and is taxed on their individual returns. Louisiana S corp basics. - Federal S corp election flows through to Louisiana for state income tax purposes. - Louisiana requires corporations and LLCs (including S corps) to file annual reports with the Secretary of State to remain in good standing. - Payroll. An S corp owner-employee must take a reasonable W-2 salary. Louisiana state withholding and state unemployment tax through the Louisiana Workforce Commission apply once thresholds are met. Why a Louisiana trades shop might still elect S corp. The main reason is federal self-employment tax savings. A disregarded-entity LLC owner pays self-employment tax on the full net profit. An S corp owner-employee pays payroll tax on wages only; the distribution portion avoids self-employment tax. Louisiana's franchise tax repeal for 2026 and later reduces the state-side friction of an S corp election. Rule of thumb. Start as a Louisiana LLC. When annual profit after a reasonable owner wage is high enough that payroll tax savings clear the payroll, retirement plan, and accounting costs, elect S corp. A CPA with Louisiana construction clients can run the breakeven for your numbers and confirm current state income tax rates.