Louisiana state tax: overview
Louisiana's state taxes are relatively low when it comes to owning property. The state has one of the lowest property tax rates in the nation.
Sales taxes are high (and will be higher in 2025), but essential items such as groceries, diapers, and some feminine hygiene products are exempt at the state level.
For 2024, Louisiana only has three income tax brackets, with the highest being 4.25%. That's much lower than the highest tax bracket in many other states. But the state is moving to a flat income tax rate beginning Jan. 1, 2025.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In the News:
Louisiana has just revamped its tax system and the changes that kick in next year could significantly impact residents' wallets. Led by Gov. Jeff Landry, this comprehensive reform is designed to simplify the state’s tax code and make Louisiana more competitive for businesses and families.
For more information, see Louisiana Has a New Income Tax.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Louisiana income tax
Louisiana currently has a graduated state individual income tax that ranges from 1.85% to 4.25%.
However, due to new tax reform legislation, Louisiana will move to a flat 3% income tax rate in 2025, replacing the tiered system.
Louisiana tax on retirement benefits: There is no state income tax on Social Security retirement benefits or federal retirement benefits (including military and non-military). Several state retirement benefits are also not taxed in Louisiana.
Taxpayers age 65 and older can also exclude up to $6,000 of annual retirement income from their taxable income. If filing jointly, each spouse can exclude up to $6,000. However, only one exclusion is permitted if one spouse is under age 65.
Note: Beginning next year, due to new legislation, the retirement income exemption will double to $12,000.
Louisiana sales tax
Louisiana's state sales tax is 4.45%. Localities can add as much as 5.11%, and the average combined sales tax rate is 9.56%, according to the Tax Foundation.
Note: Louisiana will increase its state sales tax rate from 4.45% to 5% for five years beginning Jan. 1, 2025.
According to the Tax Foundation, that will make Louisiana's combined state and local sales tax rate the highest in the nation.
(In six years, 2030, the Louisiana state sales tax is scheduled to be reduced to 4.75%.)
- Groceries: Exempt
- Prescription Drugs: Taxable
- Diapers and feminine hygiene products: Exempt
What is the property tax rate in Louisiana?
In Louisiana, the average effective property tax rate is 0.51%, which is currently one of the lowest property tax rates in the U.S.
Louisiana Property Tax Breaks for Retirees
Special Assessment: Eligible homeowners 65 and older can have the tax-assessed value of their property frozen.
To qualify, residents must meet income guidelines that are set each year. The freeze is permanent unless one of the following applies.
- You no longer live in the home
- The value of the property increases by more than 25% due to construction or renovation
Note: Homeowners under age 65 may also qualify for the property tax freeze, including those with a disability and surviving spouses of some Louisiana National Guard members (applies in only some circumstances).
Louisiana gas tax
Gasoline: 20 cents per gallon.
Diesel: 20 cents per gallon.
Source: Sales Tax Handbook
Louisiana alcohol and tobacco taxes
Louisiana tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $1.08 per pack |
| Cigars | 8%-20% of manufacturer's price |
| Snuff/Smoking Tobacco | 20%-30% of manufacturer's prce |
Source: Sales Tax Handbook
Louisiana alcohol taxes
| Product | Tax Amount |
|---|---|
| Wine | $0.11 per gallon |
| Beer | $0.32 per gallon |
| Liquor | $2.50 per gallon |
Source: Sales Tax Handbook
Louisiana estate and inheritance taxes
Louisiana is one of the many states with no estate or inheritance taxes.
Related Content
-
2025 Virginia Tax Rebate Checks Coming Soon? What to Know NowTax Rebates Given a historic 2025 gubernatorial race, tax policy will remain a key issue for Virginians in the months ahead.
-
Summer Backyard Ideas With Added Tax Benefits for 2025Tax Tips Find out how these summer 2025 home projects can help you save on taxes next year.
-
Coverdell ESAs vs. 529 Plans: Which Should You Choose?Savings Accounts These savings accounts can offer tax benefits for school and retirement expenses. Here’s how.
-
Homeschoolers Could Soon Save on Expenses With 529 PlansSavings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the SenateTax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers QualifyTax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
Ten Cheapest Places To Live in New YorkProperty Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
