• Non-Resident Corporate Limited Partner Not
  • September 20, 2011 | Authors: William M. Backstrom; Kathryn Scioneaux Friel
  • Law Firm: Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. - New Orleans Office
  • In a landmark decision, the Louisiana Court of Appeal, First Circuit, unanimously reversed the District Court, and held that the mere ownership of a limited partnership interest in a limited partnership that conducted business in Louisiana, by itself, was not sufficient to subject the non-resident corporate limited partner to the Louisiana corporation franchise tax (“Franchise Tax”). In UTELCOM, Inc. and UCOM, Inc. v. Bridges, 2010-CA-0654 (La. App. 1 Cir. 09/12/11), UTELCOM and UCOM (“Petitioners”) were foreign corporations that did not engage in any business activities in Louisiana and had no physical or other presence in Louisiana. Petitioners (1) were not registered or qualified to do business in Louisiana, (2) did not render any services to or for any affiliate, or to or for any other party in Louisiana, (3) did not have employees, independent contractors, agents, or other representatives in Louisiana, (4) did not buy, sell, or procure any services or property in Louisiana, and (5) did not maintain any bank accounts in Louisiana. Rather, Petitioners, as holding companies, owned limited partnership interests as passive investors in Sprint Communications Company LP (the “Partnership”), which was registered in Louisiana as a foreign limited partnership and conducted business in Louisiana.