§608.  Exemptions

The provisions of this Chapter do not apply to corporations organized for the following purposes:

(1)(a)  Labor corporations and corporations organized by labor unions or labor organizations for the purpose of holding title to property, collecting income therefrom, and turning the entire amount thereof less expenses over to such labor union or labor organization for its use in accordance with law, no part of the net earnings of which inures to the benefit of any private stockholder;

(b)  Family agricultural and family horticultural corporations organized under the laws of and domiciled in the state of Louisiana, provided, however, that family agricultural and family horticultural corporations shall be exempt only if seventy-five percent of the beneficial ownership of the corporation is held by, or for the benefit of, members, or the spouses of members, of a family, and at least eighty percent of its gross revenues are derived from the production, harvesting, and preparation for market of raw agricultural products produced by such corporation.  Member of a family shall include only brothers and sisters, spouses, ancestors, and lineal descendants.  In determining whether any of these relationships exist, full effect shall be given to a legal adoption.

(c)  Agricultural and horticultural corporations organized under the laws of and domiciled in the state of Louisiana, other than family corporations exempt under the provisions of Subparagraph (1)(b) of this Section, which derive at least eighty percent of their gross income from the production, harvesting, and preparation for market of raw agricultural or horticultural products produced by such corporations, provided that such exemption shall apply only to corporations whose gross income does not exceed five hundred thousand dollars per year.

(2)  Mutual savings banks, national banking corporations and banking corporations organized under the laws of the state of Louisiana who pay a tax for their shareholders or whose shareholders pay a tax on their shares of stock under other laws of this state, and building and loan associations;

(3)  Fraternal beneficiary societies, orders, or associations operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system, and providing for the payment of life, sick, accident, or other benefits to members of such society, order or association or their dependents;

(4)  Cemetery companies owned and operated exclusively for the benefit of their members or which are not operated for profit; and any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, no part of the net earnings of which inures to the benefit of any private shareholder or individual;

(5)  Corporations and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation;

(6)  Business leagues, chambers of commerce, real estate boards, or boards of trade, not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual;

(7)  Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation;

(8)  Clubs organized and operated exclusively for pleasure, recreation, and other nonprofitable purposes, no part of the net earnings of which inures to the benefit of any private shareholder;

(9)  Benevolent life insurance associations of a purely local character, mutual ditch or irrigation companies, mutual or cooperative telephone companies, or like organizations, but only if eighty-five per cent or more of the income consists of amounts collected from members for the sole purpose of meeting losses and expenses;

(10)  Insurance corporations paying a premium tax under Title 22 of the Louisiana Revised Statutes of 1950;

(11)  Farmers', fruitgrowers', or like associations organized and operated on a cooperative basis for the purpose of marketing the products of members or other producers, and turning back to them the proceeds of sales, less the necessary marketing expenses, on the basis of either the quantity or the value of the product furnished by them, or for the purpose of purchasing supplies and equipment for the use of members or other persons and turning over such supplies and equipment to them at actual costs, plus necessary expenses.  Exemption shall not be denied any such association because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal interest rate per annum on the value of the consideration for which the stock was issued, and if substantially all of such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the association, upon dissolution or otherwise, beyond the fixed dividends) is owned by producers who market their products or purchase their supplies and equipment through the association; nor shall exemption be denied any such association because there is accumulated and maintained by it a reserve required by state law or a reasonable reserve for any necessary purpose.  Such an association may market the products of nonmembers in an amount the value of which does not exceed the value of the products marketed for members, and may purchase supplies and equipment for nonmembers in an amount the value of which does not exceed the value of the supplies and equipment purchased for members, provided the value of the purchases made for persons who are neither members nor producers does not exceed fifteen per cent of the value of all its purchases.

(12)  Corporations organized by an association exempt under the provisions of Paragraph (11) of this Section or members thereof, for the purpose of financing the ordinary crop operations of such members or other producers, and operated in conjunction with such association.  Exemption shall not be denied any such corporation because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal interest rate per annum on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate directly or indirectly, in the profits of the corporation, upon dissolution, or otherwise, beyond the fixed dividends) is owned by such association, or members thereof; nor shall exemption be denied any such corporation because there is accumulated and maintained by it a reserve required by state law or a reasonable reserve for any necessary purpose;

(13)  Corporations organized for the exclusive purpose of holding title to property, collecting income therefrom, and turning over the entire amount thereof, less expenses, to organizations which are organized and operated exclusively for religious, charitable, scientific, literary, and educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder;

(14)  Voluntary employees' beneficiary association providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents, if no part of their net earnings inures (other than through such payments) to the benefit of any private shareholder or individual, and if eighty-five per cent or more of the income consists of amounts collected from members for the sole purpose of making such payments and meeting expenses;

(15)  Teachers' retirement fund associations of a purely local character, if no part of their net earnings inures (other than through payment of retirement benefits) to the benefit of any private shareholder or individual, and if the income consists solely of amounts received from public taxation, amounts received from assessments upon the teaching salaries of members, and income in respect of investments.

Amended by Acts 1950, No. 295, §1; Acts 1958, No. 437, §2; Acts 1979, No. 609, §1; Acts 1981, No. 121, §2; Acts 1985, No. 103, §1; Acts 1987, No. 101, §1, eff. June 18, 1987.

{{NOTE:  SEE ACTS 1985, NO. 103, §2.}}

{{NOTE:  SEE ACTS 1987, NO. 101, §2.}