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
-
Should You Add an Annuity to Your Retirement Portfolio in 2025?In need of some guaranteed income? An annuity may be the answer if you check off any of these boxes.
-
More SECURE 2.0 Retirement Enhancements Kick in This YearSaving for retirement gets a boost with these SECURE 2.0 Act provisions that are starting in 2025.
-
IRS Free File Is Now Open for 2025: Are Your Taxes Eligible?Tax Filing Official tax season doesn't begin until late January, but taxpayers can start filing free online returns now.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
Child and Dependent Care Credit: How Much Is It?CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
-
Gov. Hochul Wants to Triple the New York Child Tax CreditState Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff HikeTax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
Should Rent Be Part of Your Retirement Plans?Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
