What Do Louisiana’s New Tax Laws Mean for You?

Governor Jeff Landry and the Congress of Louisiana have nearly completed their reworking of Louisiana's tax code, and soon you'll be the next to vote on what changes. So what will change?

• Landry called the state's legislature for a special session in November
• Changes to the Louisiana Tax Code include
  • Income tax
  • Corporate tax
  • Sales tax

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Jeff Landry called the legislature of Louisiana into a special session on November 6th to push through "historic" tax reforms. Now that the special session has ended there have already been big changes to the state's tax code, with more on the ballot in March.

Tax Code Changes

Louisiana's lawmakers have passed a flat 3% income tax, down from the original 4.25% for yearly incomes of $50k or more. Ultimately the goal of many lawmakers in Louisiana is to adopt an income tax more like that of Texas, which has absolutely no state income tax. To help offset the loss of tax income from a lower income tax, the state's lawmakers redirected $280 million from vehicle sales tax funds meant for future infrastructure projects.

Corporate taxes also saw cuts, going from the highest tier of corporate income tax at 7.5% to a flat 5.5%. Originally Governor Landry had proposed a 3.5% flat rate on corporate income tax. The legislature also scrapped the corporate franchise tax, a 0.275% tax on businesses in Louisiana worth more than $500 million in yearly income.

While Landry had originally wanted to add services like dog grooming and car-washing to the list of services where sales tax is applicable. Landry did not get his wish and instead, the legislature passed through a new sales tax on digital goods and services.

The state sales tax was raised to 5%, equal to a penny more than the original 4%. The 5% tax will not be permanent, lowering to 4.75% in 2030.

On the Ballot

On the March 29th, 2025 ballot voters in Louisiana will be asked to vote for an amendment to the state's constitution. This amendment will remove a list of tax exemptions from constitutional protection, providing a $2,000 raise to teachers, and the liquidation of several education funds.