Louisiana R&D Tax Credit

Louisiana R&D Tax Credit

Supports Louisiana small businesses with innovation tax incentives for innovation-driven expansion.

Eligibility · United States · US-LA

The Louisiana Research and Development Tax Credit is a state income tax credit administered by Louisiana Economic Development (LED) and claimed through the Louisiana Department of Revenue (LDR). The credit offers up to 30% of qualified Louisiana R&D expenditures, with the rate tiered by company size: 30% for small companies, 18% for mid-size, and 8% for larger firms, based on employee count thresholds described in program guidance. The credit is subject to a statewide annual cap of $12 million (effective July 1, 2025, on a first-come, first-served basis), and the program sunsets on December 31, 2029. Unused credits carry forward up to five years.

Eligible expenditures include wages for research, supervisory, and support personnel; supplies consumed in Louisiana-based R&D activities; and 65% of qualified contract research costs incurred in the state. Applicants must file within one year after December 31 of the tax year in which the qualifying expenditures occurred, and the review and approval process typically takes three to six months: online application to LED, LED review and approval, then credit claim on the Louisiana income tax return via LDR. A notable restriction applies to professional services firms and custom manufacturers, which must hold a pending or issued U.S. patent to qualify. The FY 2025-26 allocation was fully issued, making the program effectively closed until the next July 1, 2026 allocation opens.

The Louisiana R&D Tax Credit is best suited to for-profit businesses, universities, and research organizations conducting substantive R&D activities in Louisiana, particularly those operating at TRL 3–9 across deeptech and applied science sectors. The size-tiered credit rate means smaller companies receive the highest benefit percentage, and the $12M cap rewards early filing in each fiscal year. Companies should track LED allocation windows closely and prepare application documentation — including payroll records, supply receipts, and contract research agreements — in advance of the July 1 annual opening.