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STARTING AND OPERATING A BUSINESS IN LOUISIANA Copyright © 2000, Michael D. Jenkins
CONTENTS OF THIS CHAPTER:
I. INTRODUCTION I. INTRODUCTION Louisiana has a very unusual legal structure under which businesses must operate. Since it first became a state, Louisiana's main body of law has been the Civil Code, or Napoleonic Code, inherited from its French past. This has made Louisiana very different from the other 49 states, which have basically operated under the English common law system. Also, as anyone who does business in or lives in Louisiana already knows, the state is divided into parishes, rather than counties, unlike the other 49 states. Thus, until recent years, the law on many subjects has been one way in many of the 49 other states, and another way in Louisiana. For example, all the other states have adopted the Uniform Commercial Code, which Louisiana has not. However, in recent years, Louisiana's legal system has gradually been becoming more and more similar to other states as it replaces much of the Napoleonic Code with more modern laws. It has now adopted much, but not all, of the Uniform Commercial Code. Its tax system is more typical, however. Like most states, Louisiana imposes an income tax, a franchise tax on corporations, a sales and use tax, various excise taxes, with property taxes imposed at the local level. The state has also adopted a limited liability company (LLC) law, and a limited liability partnership (LLP) law, so that businesses operating in Louisiana in LLC or LLP form may now obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. Until recently, the state's economy was relatively stagnant, in terms of the level of unemployment (somewhat higher than the national level), average per capita income levels (much lower than national averages), and other economic measures. For example, as recently as April, 1999, the Louisiana unemployment rate was 5.4%, but has recently declined sharply to 4.4% as of April, 2000, only slightly above the national unemployment rate of 3.9%. In addition, the state has a very low cost of living, as compared to national averages. To view the latest federal Bureau of Labor Statistics unemployment rate data for Louisiana or any other state, visit the BLS website. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Louisiana can operate as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. However, unlike most other states, Louisiana does not recognize S corporation tax status for income tax purposes, although its corporate income tax law has provisions that may in some cases allow an S corporation to be free of tax, as under federal law. Louisiana also provides for limited liability partnerships, in which no partner is liable for debts of the partnership, in general, as in the case of a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In general, sole proprietorships in Louisiana can be formed with no formalities. However, as discussed in Section IV(b), it will typically be necessary to obtain one or more local business licenses from cities or parishes in which you operate and, in some cases, state licenses, as well. No separate tax form filing is required, generally, for a sole proprietorship, under the Louisiana income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Louisiana income tax and filing requirements for individuals. (c) Partnerships. Unlike most states, where general partnerships can be formed with no formalities, it is usually necessary in Louisiana, or at least highly advisable, to have a written partnership agreement. The Louisiana Secretary of State's office maintains a central registry for partnerships, where you may register your partnership contract, for a $75 fee. Foreign (out-of-state) partnerships must also register, and pay a fee of $125, plus file an annual report. You should also register the partnership with your parish. Partnerships registered with the secretary of state are required to file annual reports each subsequent year and pay a $25 annual filing fee. Foreign partnerships pay an annual filing fee of $25.00. Thus, only those partnerships that do not have a written partnership agreement are exempt from filing an annual report. In addition, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or parishes in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A limited partnership, or, as it is called in Louisiana, a partnership in commendam, is one in which there is at least one general partner (who is liable for partnership debts) and at least one partner in commendam (limited partner), who is not liable for partnership debts. To form a partnership in commendam under Louisiana law, you must have a written partnership agreement, and must register it with the secretary of state. For information on partnership in commendam (limited partnership) filing requirements, see the contact information for the offices of the Louisiana Secretary of State, listed in Section VI(a). Limited liability partnerships (LLPs) are a new form of partnership permitted under the laws of Louisiana. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Louisiana state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. To form an LLP in Louisiana, you must, however, register your domestic or foreign partnership and pay a filing fee of $100 to the secretary of state. Note that an LLP does not offer full protection from claims of creditors, to the same extent as a corporation or LLC. Under the Louisiana law, a partner in an LLP is relieved of liability for wrongful acts or misconduct of other partners or representatives of the LLP only, and not for his or her own wrongful or negligent acts, malpractice, or misconduct. Every LLP doing business in Louisiana, including both domestic and foreign LLPs, must file an annual renewal and the $100 fee each year to retain its LLP status. A registered foreign LLP must file an annual report and pay a $25 filing fee. For more information on LLP registration and reporting requirements, see the contact information for the offices of the secretary of state, listed in Section VI(a). Note that one potential drawback of LLPs, if you will do business in other states besides Louisiana, is that some states, like California and New York, only recognize certain types of professional partnerships as LLPs. If yours is not a professional partnership, such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
Partnerships, as entities, are not subject to state income tax in Louisiana. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). Partnerships are required to file an annual tax information return with the state. For details on Louisiana partnership tax return filing requirements, see Section IV(c). (d) Corporations. To form a corporation in Louisiana, you must file articles of incorporation with the secretary of state and pay a fee of $60. A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Louisiana, by filing an application for a certificate of authority and paying a filing fee of $100. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Louisiana, see the contact information for the offices of the secretary of state, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file annual reports and a filing fee of $25 with the secretary of state each year. Failure to file this report on a timely basis could result in suspension or revocation of your corporation's charter. In addition to paying federal income taxes on its income, a corporation that does business in Louisiana must also file corporate income tax returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and tax return filing requirements. Corporations that do business in Louisiana are also subject to a corporate franchise tax. This tax is imposed on the capital stock, surplus, undivided profits, and debt capital of the corporation that is employed in or apportioned to the state of Louisiana. This tax applies at the rate of $3.00 for each $1,000 of capital, with a minimum annual tax of $10.00. It is reported, along with corporate income tax, to the state Department of Revenue. In tax years 2006 and later, the franchise tax on debt capital will begin phasing out, with only the following percentages of debt capital subject to tax each year:
For tax forms and more information on corporate income and franchise taxes in Louisiana, see the contact information for the offices of Louisiana Department of Revenue, listed in Section VI(a). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns. Unlike most states, Louisiana does not treat S corporations differently from regular corporations (C corporations) for state income tax purposes, in general. However, as a practical matter, the state allows an S corporation to reduce its taxable income by the amount of any such income reported on Louisiana state individual income tax returns by its shareholders. Thus, if all shareholders of your S corporation are residents of Louisiana and report their share of income on Louisiana income tax returns, the S corporation should have no taxable income on which it must pay Louisiana income tax in most cases. (However, it will still be fully subject to the state franchise tax). (f) Limited Liability Companies. Louisiana, like every other state, has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Louisiana may also choose to operate in the form of an LLC. In most states, LLCs are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes. See Section IV(c) for a discussion of the income tax treatment of LLCs under Louisiana tax laws. To form an LLC under the laws of Louisiana, one or more persons may file articles of organization with the secretary of state, which must be accompanied by a filing fee of $60. Louisiana law formerly required that an LLC have two or more members. However, one-member LLCs are now allowed, and professional LLCs may be formed. Foreign LLCs, those formed under the laws of another state, must obtain a certificate of authority to do business in Louisiana, by filing an application for a certificate of authority with the secretary of state and paying a filing fee of $100. All LLCs, domestic and foreign, must file annual reports with the Secretary of State and pay a filing fee of $25. LLCs are treated as partnerships for all state tax purposes, except income tax. For income tax, they will be treated the same (generally as partnerships) as under federal law. This is very favorable, because it means, among other things, that an LLC is exempt from Louisiana franchise tax, as well as usually avoiding state income tax. This is true even if an LLC has elected to be taxed as an S corporation or C corporation for income tax purposes. For more information on filing articles of organization for an LLC, see the contact information for the offices of the secretary of state, listed in Section VI(a). III. BUSINESS ACQUISITIONS (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching parish, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Louisiana is one of the states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Louisiana. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Louisiana, you should obtain, or have the seller obtain, tax releases for state unemployment tax from the Office of Regulatory Services of the Louisiana Department of Labor and a sales and use tax release from the Department of Revenue. (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to apply on a timely basis to the Office of Regulatory Services of the Louisiana Department of Labor, requesting that you be treated as a successor employer. IV. LOUISIANA TAXES AND OTHER GENERAL REQUIREMENTS. (b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or parish. Before you open your business, contact your local city or parish and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees. However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis. State governments have also traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Louisiana has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing. Every business operating in Louisiana must also obtain a state tax account number by filling out Form CR-1, Central Registration Application, and filing it with the Louisiana Department of Revenue. For information on state licensing and business registration requirements in Louisiana, see the contact information for the offices of the First Stop Shop of the secretary of state, listed in Section VI(a). They can help you and provide customized information on all types of business licenses and permits for your specific type of business and location. (c) Income and Franchise Taxes. Louisiana has both an individual income tax and a corporate income tax, as well as a franchise tax on corporations. For a description of the franchise tax, see Section II(d). The Louisiana individual income tax is imposed at a maximum tax rate of 6%. In 2002, Louisiana voters amended the state constitution to modify the state personal income tax brackets. As revised, the maximum 6% tax bracket applies to taxable income in excess of $25,000 for a single taxpayer, or in excess of $50,000 for married couples filing jointly. Individual taxpayers pay state income tax on their business earnings from a sole proprietorship, or on their share of the earnings of a pass-through entity, such as a partnership, S corporation, or LLC. The Louisiana personal income tax return must be filed each year with the Louisiana Department of Revenue, by May 15th for a calendar year taxpayer. Partnerships, or entities taxable as partnerships, such as LLCs, are not subject to state income taxation in Louisiana, and generally are not required to file a Louisiana income tax return. Each partner reports his or her share of the partnership income, losses and credits on the individual's return. However, if a partnership has any nonresident partners, or if some of the partners are not individual natural persons, the partnership must file an information return (Form IT-565) with the Louisiana Department of Revenue each year, showing each partner's share of taxable income, losses, and credits. Individual taxpayers doing business as sole proprietors, or who are partners in partnerships, or members of LLCs, are required to make payments of estimated Louisiana individual income taxes, on Form IT-540ES, Declaration of Estimated Tax, if the net tax liability (not covered by withholding) exceeds $1000 ($2000, in the case of a joint declaration by husband or wife). Estimated tax payments are due in four installments, on the 15th day of the 4th, 6th, and 9th months of the taxable year, and the 15th day of the first month of the following year. The Louisiana corporate income tax rate, on corporations other than S corporations, is graduated, starting at 4% on the first $25,000 of income and rising to a maximum rate of 8% on income over $200,000. S corporations are technically subject to state income tax to the same extent as other corporations, but Louisiana law allows an S corporation to reduce its taxable income by the amount of any such income reported on Louisiana state individual income tax returns by its shareholders.Thus, in many cases, an S corporation's taxable income will be zeroed out entirely, so that the net effect is similar to the federal exemption of S corporations from federal income tax. The state corporation income (and franchise) tax return is Form ICFT-620, Annual Income and Franchise Tax Return, which must be filed with the Department of Revenue by the 15th day of the fourth month following the end of the taxable year, or by April 15th in the case of a corporation whose taxable year is the calendar year. Corporations are required to make estimated tax payments of their state corporate income tax in advance, if their tax liability for the year equals or exceeds $1,000. Estimated tax payments are due in advance, in four equal installments, on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year. Penalties will be imposed for failure to make the required estimated tax payments on a timely basis. In Louisiana, a limited liability company (LLC) is taxed in the same manner as a partnership, thus avoiding the possible double taxation of income that can occur with a corporation. LLCs are not subject to the Louisiana franchise tax, either. Louisiana state law has been changed so it now recognizes the validity of 1-member LLCs. Note that it is not always entirely clear whether an LLC is a "single-member LLC" LLC or not, in a community property state like Louisiana, where the "single owner" is a married person and the LLC is owned as community property. Fortunately, the federal Internal Revenue Service (IRS) has taken a very lenient position in Rev. Proc. 2002-69, stating that the IRS will accept whatever choice the couple make, either to disregard the LLC as an entity (treating it as a "single-member LLC") or to treat it as a partnership between the husband and wife. Presumably, the couple's choice of federal tax treatment will also apply for state tax purposes, since Louisiana follows the federal tax treatment of LLCs, generally. However, where the LLC is owned by a husband and wife as joint tenants, or tenants in common, or as tenants by the entirety, it is unclear whether the IRS treatment would be as lenient as for community property owners, since the IRS has not issued any published rulings on whether an LLC can be a disregarded entity if held in one of the various forms of tenancy by a married couple, rather than being held as community property. (d) Sales and Use Tax. Louisiana imposes a general sales tax on retail sales of tangible personal property and certain types of services at the statewide rate of 4%. In addition, local governments are allowed to adopt local sales taxes, at varying tax rates. Combined rates in major cities are generally between 7% and 9%. Sellers are required to obtain a seller's permit and to collect and pay over the state and local sales and use taxes to the Department of Revenue. There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer. A shadow tax, the use tax, is also imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Louisiana. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold. During the period from July 1, 2004 until June 30, 2009, a number of sales tax exemptions are suspended, so that the "exempt" items are temporarily subject to the full 4% state sales tax. Among various business incentives enacted by the Louisiana legislature in 2002 is a phase-out of the sales and use tax on custom computer software (not applicable to "canned" or "off-the-shelf" software programs). For the period from July 1, 2004 through June 30, 2005, 75% of the cost price of custom software is exempt, and on and after July 1, 2005, it is completely exempted. Vendors who collect sales tax are entitled to retain a 1.1% "vendor's compensation credit" if they timely pay the tax that is due. This is designed to help defray some of the compliance and administrative costs incurred by sellers, as well as to give them an incentive to collect sales and use taxes by, in effect, paying the seller a commission equal to 1.1% of the tax collected. Before making any taxable sales, you will need to register with the Department of Revenue for a permit. Register on Form CR-1, which can also serve as your state withholding tax (employer) registration. For more information on Louisiana sales and use tax registration and compliance, see contact information for the offices of the Department of Revenue in Section VI(a). (e) Real and Personal Property Taxes. In Louisiana, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due. Louisiana also imposes personal property taxes on tangible personal property. Unlike many states, it does not exempt business inventories from property tax, generally. While Louisiana generally taxes tangible personal property, it does not impose a property tax on intangible personal property, such as stocks, bonds, promissory notes, and other such paper assets. The 1994 law repealing the tax on intangibles was challenged as unconstitutional. However, Louisiana voters, on September 21, 1996, amended the state constitution to eliminate property taxes on nearly all types of intangible property, except for a few limited classes of assets, such as property of public service companies, bank stocks, and certain insurance industry assets. That amendment has been effective since November 5, 1996. (f) Other Business Taxes. Louisiana imposes a number of other taxes on businesses, including:
(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group." In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name. Louisiana law requires anyone doing business under an assumed name to register with the register of conveyances in the city of New Orleans or the clerk of court in the applicable parish. No licenses will be granted by the city or parish until such assumed name has been registered. V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. Since Louisiana imposes a state income tax on the income of individuals, you will need to also withhold Louisiana income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Department of Revenue on Form CR-1, Central Registration Application, to obtain your employer state withholding registration number. For more information on Louisiana income tax withholding and registration requirements for employers, see the contact information for the offices of the Department of Revenue, listed in Section VI(a). Request their helpful publications, the Louisiana Tax Guide and the Louisiana Withholding Tables and Instructions for Employers. (b) Unemployment and Other State Payroll Taxes. If your business employs one or more individuals in each of 20 weeks during any calendar year or if your payroll amounts to $1,500 in any calendar quarter, you, as an employer will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Louisiana unemployment tax are required to register with the Office of Regulatory Services of the Louisiana Department of Labor on Form LDOL-ES1, Status Report. New employers are required to pay tax at rate that varies by industry on the first $7,000 of wages (in 2000) paid to each employee. After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. All state unemployment taxes are imposed upon you as the employer, and, under Louisiana law, cannot be charged to your employees or withheld from their wages. For more information on your Louisiana unemployment tax obligations as an employer, see the contact information for the Office of Regulatory Services of the Louisiana Department of Labor, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Louisiana, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor or a partner in a partnership may elect not to be considered an employee. Similarly, those employees of a corporation who own at least 10% of the stock of the corporation and who are officers of the corporation may also elect not to be covered for workers' compensation purposes. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage. For more detailed information regarding your obligations as an employer under the Louisiana workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Workers' Compensation Division of the Louisiana Department of Employment and Training, listed in Section VI(a). (d) State Wage and Hour Laws. Unlike most states, Louisiana does not have a minimum wage law governing the hourly wage that you must pay to your employees. However, in most cases, your business will be subject to the federal minimum wage and overtime laws, and thus required to pay at least $5.15 an hour. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Louisiana. (e) State Occupational Safety and Health Laws. Approximately half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states, including Louisiana, have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within the state. For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, contact the Baton Rouge offices of the U.S. Department of Labor -- OSHA, listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Louisiana labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to terminated employees. An employee who voluntarily quits employment must receive a final wage payment by the next regular payday, but in no case more than 15 days after quitting work. If you discharge an employee, you must pay the wages owed in no more than three days. Do not take this requirement lightly -- failure to do so will subject you to paying full wages to the employee from the time the employee demands payment up to the date paid, or 90 days, if less. In general, wages must be paid at least twice a month by any employer engaged in manufacturing, boring for oil or in mining operations, or public service corporations, if employing ten or more employees. This requirement does not apply to any employee who is employed in a bona fide executive, adminstrative, supervisory or professional capacity. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Louisiana has enacted a right-to-work law. (3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Louisiana, and display a poster informing employees of their rights. State anti-discrimination laws apply only to employers who employ 20 or mor employees in Louisiana for each working day of 20 or more calendar weeks in the current or preceding year. Louisiana law prohibits age discrimination, in a manner similar to federal age discrimination laws. (4) Reporting new hires. Under new federal welfare reform laws, employers in all states are now required to report newly-hired (or rehired) employees to a designated state agency (the Department of Social Services, New Hire Registry, for Louisiana employers) within 20 days after the date of hire. VI. STATE SOURCES OF HELP AND INFORMATION (a) Key State Agencies Contact Information. Louisiana, as many states have done in recent years, has set up a "one-stop" center, called the First Stop Shop Division, to help your new or existing businesses to obtain all necessary state licenses and permits from a single office, without your having to go from agency to agency to meet all the legal and regulatory licensing requirements. This office is a division of the Office of the Secretary of State of Louisiana. You can register your business with the state for Louisiana income tax, sales and use tax, and employer withholding, on a single state application form, Form CR-1, Central Registration, which must be filed with the Department of Revenue, whose address is listed below. If you are having trouble locating a state government agency in Louisiana, call:
To obtain information on business licenses and permits, or about starting or relocating your business in Louisiana, contact:
Addresses and other contact information for other key Louisiana government agencies mentioned in this book are listed below for your convenience. SECRETARY OF STATE. Contact the office of the secretary of state for information on:
STATE SALES TAX. Obtain your sales and use tax license or permit and information on the Louisiana sales and use tax law, from the Department of Revenue, at the address listed above for that agency. STATE UNEMPLOYMENT TAX. Contact the Office of Regulatory Services of the Louisiana Department of Labor, at the phone number listed above for that agency, to determine whether you are an employer subject to payment of state unemployment taxes, and for registration as an employer if you are subject. NEW HIRE REPORTING. Employers must report newly hired employees within 20 days to the New Hire Registry, by phone, Internet, fax, or by mailing the information to the following address:
STATE ANTI-DISCRIMINATION LAWS. For information on state civil rights laws, contact the Baton Rouge office of:
(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Louisiana to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.
(c) Internet Sites. If you have access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Louisiana. Since new sites are appearing constantly, you might also want to search for other Louisiana government Web sites by using one of the popular Internet search engines, such as Excite! or Yahoo. To start your Internet search for Louisiana government
information, you may want to begin with the following
Internet site, Info Louisiana, at: State of Louisiana home page: State government departments: Louisiana Economic Development Corporation (financial assistance information for small businesses): New Hire Registry (for reporting newly hired employees): Louisiana Commission on Human Rights: (d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Louisiana, or contact the Louisiana Department of Economic Development, which administers many state loan programs, at the following address:
Or, contact:
For information on SBA loans and small business assistance, contact the Louisiana District Office of the SBA, at:
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Copyright © 2000 Michael D. Jenkins
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