Tax policy in Louisiana

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Tax policy in Louisiana

Tax rates in 2015

Personal income tax: 2% to 6%

State sales tax: 4%

Corporate income tax: 4% to 8%

Tax revenues in 2014

Total tax collections: $9.695 billion

Tax collections per capita: $2,085

Rank: 41

Total state expenditures • State debt • Louisiana state budget and finances

Louisiana generates the bulk of its tax revenue by levying a personal income tax, a general sales tax and select sales taxes (otherwise known as excise taxes). The state derives its constitutional authority to tax from Article VII of the state constitution.

Tax policy can vary from state to state. States levy taxes to help fund the variety of services provided by state governments. Tax collections comprise approximately 40 percent of the states' total revenues. The rest comes from non-tax sources, such as intergovernmental aid (e.g., federal funds), lottery revenues and fees. The primary types of taxes levied by state governments include personal income tax, general sales tax, excise (or special sales) taxes and corporate income tax.

HIGHLIGHTS

In 2014, according to the Federation of Tax Administrators, Louisiana collected $9.695 billion in tax revenues. The state's tax revenues per capita were $2,085, ranking 41st highest in the United States.

Tax rates

Personal income tax

See also: Personal income tax

The personal income tax rates in Louisiana for the 2015 tax year ranged from 2 percent to 6 percent. An individual's tax liability varies according to his or her tax bracket. A tax bracket is the income range to which a tax rate applies. In Louisiana, there are three income tax brackets.

The table below summarizes personal income tax rates for Louisiana and neighboring states in 2015. Numerical rankings are tabulated by excluding states with no personal income tax (as well as New Hampshire and Tennessee, which charge income tax only on dividends and interest) and are based on the highest possible tax rate for which an individual might be liable. Because some states are excluded from the rankings and a few share common uppermost rates, there are 34 numerical rankings, with 1 indicating the highest uppermost rate and 34 indicating the lowest.

Personal income tax rates, 2015
State	Tax rates		Number of brackets	Brackets		Ranking
	Lowest	Highest		Lowest	Highest
Louisiana	2%	6%	3	$12,500	$50,001	18
Alabama	2%	5%	3	$500	$3,001	25
Arkansas	0.9%	6.9%	6	$4,299	$35,100	13
Mississippi	3%	5%	3	$5,000	$10,001	25
Note: For complete notes and annotations, please see the source below. Source: Tax Policy Center, "Individual State Income Tax Rates 2000-2015," accessed September 29, 2015

Personal exemptions

States that collect a personal income tax allow individuals to claim personal exemptions on income taxes each year. The personal exemption indicates that only a person's income above a certain level is subject to taxation.

Exemptions work by reducing the amount of an individual's taxable income. Both state and federal taxes allow exemptions. The state exemptions for Louisiana and its neighboring states as reported by the Tax Policy Center are reported in the chart below.

In Louisiana, state personal exemptions for single filers were equal to $4,500, which was second highest among its neighbors that allowed for personal income tax exemptions. Exemptions for those filing as a married couple were equal to $9,000 in 2015. Louisiana regulations also allow filers to receive exemptions for dependents. These exemptions were equal to about $1,000 in 2015.

Personal exemptions, 2015
State	Single	Married	Dependents
				Louisiana	$4,500	$9,000	$1,000
Alabama	$1,500	$3,000	$500
Arkansas	$26	$52	$26
Mississippi	$6,000	$12,000	$1,500
Note: For complete notes and annotations, please see the source below. Source: Tax Policy Center, "Individual State Income Tax Rates 2000-2015," accessed September 29, 2015

Capital gains tax

See also: Capital gains tax

A capital gains tax is a tax levied on the profit gleaned from the sale of a capital asset. Examples of capital assets include stocks, businesses, land parcels, homes, personal items and more. Capital gains are taxable at both the federal and state levels. While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income. In Louisiana, the uppermost capital gains tax rate was 6 percent. The combined uppermost federal and state tax rates totaled 27.9 percent, ranking 29th highest in the nation.

The table below summarizes uppermost capital gains tax rates for Louisiana and neighboring states in 2015.

Uppermost capital gains tax rates by state, 2015
State	State uppermost rate	Combined uppermost rate	Ranking
				Louisiana	6%	27.90%	29
Alabama	5%	27.40%	37
Arkansas	7%	27.90%	29
Mississippi	5%	28%	26
U.S. AVERAGE		28.70%
Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "The High Burden of State and Federal Capital Gains Tax Rates," accessed September 29, 2015

Sales tax

See also: Sales tax

Almost all states employ a statewide sales tax, which ranges from 2.9 percent in Colorado to 7.5 percent in California. Additionally, many states allow the levying of local sales taxes, which are then added to the state's tax.

Louisiana's state sales tax was 4 percent in 2015. The average local tax was about 4.91 percent, meaning that the average combined sales tax was about 8.91 percent. This was the fourth highest combined sales tax in the country in 2015 but was second lowest among its neighboring states. The table below displays the state tax rates, average local tax rates, and average combined tax rates for Louisiana and its neighboring states.

Combined sales tax rates, 2015
State	State sales tax	Average local sales tax (a)	Combined	Ranking
Louisiana	4.00%	4.91%	8.91%	4
Alabama	4.00%	4.91%	8.91%	3
Arkansas	6.50%	2.76%	9.26%	2
Mississippi	7.00%	0.07%	7.07%	20
Source: The Tax Foundation, "State and local sales tax rates, 2015," accessed November 5, 2015

The sales tax rate in Louisiana for tax year 2015 was 4 percent. The table below summarizes sales tax rates for Louisiana and neighboring states in 2015. The table also notes the state's policy with respect to types of items commonly exempted from sales tax (i.e., food, prescription drugs and nonprescription drugs).

Sales tax rates, 2015
State	Sales tax rate	Exemption status
		Food	Prescription drugs	Nonprescription drugs
Louisiana	4%	Exempt	Exempt	Taxable
Alabama	4%	Taxable	Exempt	Taxable
Arkansas	6.5%	1.5% (taxed at a reduced rate)	Exempt	Taxable
Mississippi	7%	Taxable	Exempt	Taxable
Source: Tax Policy Center, "Sales Tax Rates 2000-2015," accessed September 30, 2015

Excise taxes

See also: Excise taxes

Excise taxes, also known as selective sales or differential commodity taxes, are levied for the sales of specific goods or services. Excise taxes are considered indirect taxes because they are not charged directly to individuals. In most cases, the excise tax is paid by the producer or seller of an item. The cost of the tax is then included in the sale price of the item and passed on to the consumer. The tables below provide excise tax rates for motor fuel, alcohol and cigarettes in Louisiana and neighboring states. In Louisiana, excise tax revenues comprised 23.3 percent of total tax collections in 2013.

Fuel excise tax rates, 2015 (in cents per gallon)
State	Gasoline			Diesel			Gasohol
	Excise tax	Other taxes	Total tax	Excise tax	Other taxes	Total tax	Excise tax	Other taxes	Total tax
Louisiana	20¢	0.125¢	20.125¢	20¢	0.125¢	20.125¢	20¢	0.125¢	20.1¢
Alabama	16¢	2¢	18¢	19¢	0¢	19¢	16¢	2¢	18¢
Arkansas	21.5¢	0.3¢	21.8¢	22.5¢	0.3¢	22.8¢	21.5¢	0.3¢	21.8¢
Mississippi	18¢	0.4¢	18.4¢	18¢	0.4¢	18.4¢	18¢	0.4¢	18.4¢
Note: For full annotations, see the source below. Source: Tax Policy Center, "State Motor Fuel Tax Rates 2000-2011, 2013-2015," accessed September 30, 2015

Alcohol excise tax rates, 2015 (in dollars per gallon)
State	Liquor		Wine		Beer
	Tax rate	Does general sales tax apply?	Tax rate	Does general sales tax apply?	Tax rate	Does general sales tax apply?
Louisiana	$2.50	Yes	$0.11	Yes	$0.32	Yes
Alabama	See footnote1	Yes	$1.70	Yes	$0.53	Yes
Arkansas	$2.50	Yes	$0.75	Yes	$0.23	Yes
Mississippi	See footnote1	Yes	$0.35	Yes	$0.43	Yes
1"In 17 states, the government directly controls the sales of distilled spirits. Revenue in these states is generated from various taxes, fees, price mark-ups, and net liquor profits." Source: Tax Policy Center, "Alcohol Rates, 2000-2010, 2013-2015," accessed September 30, 2015

State cigarette taxes, 2015 (in cents per pack)
State	Tax rate	National ranking
			Louisiana	36¢	49
Alabama	42.5¢	47
Arkansas	115¢	30
Mississippi	68¢	37
Note: For full annotations, see the source below. Source: Tax Policy Center, "State Cigarette Taxes, 2015," accessed September 30, 2015

Corporate income tax

See also: Corporate income tax

Corporate income tax is the tax levied by a state on a company's profits. In tax year 2015, Louisiana levied a 4 percent to 8 percent corporate income tax. The table below lists the corporate income tax rates for Louisiana and neighboring states in 2015.

Corporate income tax rates, 2015
State	Tax rate	Brackets		Number of brackets
		Lowest	Highest
Louisiana	4% - 8%	$25,000	$200,000	5
Alabama	6.5%	Flat rate		1
Arkansas	1% - 6.5%	$3,000	$100,000	6
Mississippi	3% - 5%	$5,000	$10,000	3
Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "State Corporate Income Tax Rates and Brackets for 2015," accessed October 7, 2015

Business tax climate

In October 2014, the Tax Foundation released a report evaluating business tax systems in the states for fiscal year 2015. The report's authors graded the states by analyzing more than 100 variables in five general tax areas: corporate taxes, personal income taxes, sales taxes, unemployment insurance taxes and property taxes. States were scored on a scale of zero to 10, with a score of zero indicating the worst business tax structure and a score of 10 indicating the best. States were then ranked on a scale of one to 50, with a ranking of one indicating the state with the best business tax climate and a score of 50 indicating the state with the worst.

In fiscal year 2015, Louisiana's business tax climate was ranked 35th in the nation. The table below provides scores and rankings for Louisiana and neighboring states. To access the full report, click here.

Business tax climate rankings, fiscal year 2015
State	2014		2015		Change from 2014 to 2015
	Rank	Score	Rank	Score	Rank	Score
Louisiana	32	4.87	35	4.83	-3	-0.04
Alabama	25	5.1	28	5.02	-3	-0.08
Arkansas	37	4.78	39	4.68	-2	-0.1
Mississippi	17	5.33	18	5.29	-1	-0.04
Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "2015 State Business Tax Climate Index," October 28, 2014

Property tax

See also: Property tax

Most often, property tax applies to real estate, although some states levy property taxes on other types of personal property, such as automobiles. Generally speaking, an individual's property tax liability is determined by the tax rate and the tax base, which is "determined by both the assessed value of the property and ... the share of the assessed value that is subject to tax." To learn more about property taxes, including tabulation methods, see this page.

Property taxes comprise the lion's share of local government revenues. In 2010, property taxes accounted for 75 percent of the tax revenues collected by local government entities (such as cities, counties, school districts, etc.). States, on the other hand, generate very little revenue from property taxes. Property tax rates can vary substantially from locality to locality within a state.

The table below provides the mean amount of property taxes paid, as well as property tax as a mean percentage of home value, for Louisiana and neighboring states for 2012. In terms of mean property taxes paid, Louisiana ranked second lowest when compared to neighboring states.

Mean property taxes paid per state, 2012
State	Mean property taxes paid	Property tax as a percent of home value
Louisiana	$823	0.52%
Alabama	$631	0.46%
Arkansas	$901	0.68%
Mississippi	$1,004	0.8%
Source: Tax Policy Center, "Residential Property Taxes in the United States," November 18, 2013

The table below lists per capita state and local property tax collections for Louisiana and neighboring states for fiscal year 2012. According to the Tax Foundation, which compiled the data below, Louisiana ranked 44th in the country in terms property tax collections per capita.

State and local property tax collections per capita, 2012
State	Collections per capita	Ranking
			Louisiana	$793	44
Alabama	$531	51
Arkansas	$662	49
Mississippi	$870	42
Source: Tax Foundation, "Facts and Figures 2015: How Does Your State Compare?" accessed October 5, 2015

Estate and inheritance taxes

See also: Estate and inheritance taxes

Estate and inheritance taxes are levied on the property of deceased individuals (decedents). These taxes are levied by both the federal government and some state governments. Although the terms "estate tax" and "inheritance tax" are sometimes used synonymously, there are differences between the two. Generally speaking, an estate tax is applied to the value of a decedent's property and is paid from the estate before distribution to any heirs. Conversely, an inheritance tax is paid by the heir or heirs of a decedent's assets.

Louisiana does not levy any estate or inheritance taxes, although residents are subject to the federal estate tax.

Tax revenues

Tax collections by source as a percentage of total tax collections in 2013.

See also: Louisiana state budget and finances

The table below summarizes general fund revenue sources for Louisiana and neighboring states in 2013. All figures are rendered in millions of dollars (for example, $1,500 translates to $1,500,000,000). Per capita figures have not been abbreviated.

General fund revenue sources, 2013
State	Sales tax	Personal income tax	Corporate income tax	Other taxes and fees	Grand total	Per capita revenues
Louisiana	$2,853	$2,685	$340	$2,225	$8,103	$1,751.82
Alabama	$1,945	$3,104	$376	$1,889	$7,314	$1,513.12
Arkansas	$2,125	$3,144	$431	$514	$6,214	$2,099.77
Mississippi	$1,887	$1,480	$463	$908	$4,738	$1,583.98
Source: National Association of State Budget Officers, "State Expenditure Report: Examining Fiscal 2011-2013 State Spending," accessed September 24, 2014

The table below lists tax collections by source as a percentage of total collections for Louisiana and neighboring states in 2013.

Tax collections by source as a percentage of total tax collections, 2013
State	Property tax	Sales tax	Select sales (excise) taxes	Personal income tax	Corporate income tax	Other taxes
Louisiana	0.6%	30.6%	23.3%	29.7%	2.7%	13.1%
Alabama	3.5%	25.2%	25.6%	34.6%	4.1%	7%
Arkansas	11.9%	33%	13.8%	30.9%	4.7%	5.7%
Mississippi	0.3%	43.1%	18.6%	23.7%	5.6%	8.6%
Source: Tax Policy Center, "State Tax Collection Shares by Type 2000-2013," June 20, 2014

Tax ballot measures

Voting on taxes
Ballot measures
By state
By year
Not on ballot
Local City taxes County taxes School taxes Property taxes Sales taxes Income taxes Other taxes

See also: Taxes on the ballot and List of Louisiana ballot measures

Ballotpedia has tracked the following ballot measures relating to taxes in Louisiana.

1. Louisiana Tax Exemptions for Jewelery, Amendment 4 (October 2007)
2. Louisiana Tax Rates for Historical Property, Amendment 10 (October 1999)
3. Louisiana Income Tax Revision, Amendment 2 (2000)
4. Louisiana Sales and Use Tax Revision, Amendment 3 (2000)
5. Louisiana Tax Exemption on Drilling Rigs, Amendment 11 (2002)
6. Louisiana Individual and Joint Income Tax Schedule, Amendment 2 (2002)
7. Louisiana State Board of Commerce Contract of Ad Valorem Tax, Amendment 5 (2002)
8. Louisiana Property Tax Exemption for Drilling Rigs, Ballot Measure 8 (October 2003)
9. Louisiana Property Tax Amendment, Question 2 (2004)
10. Louisiana Natural Resource Severance Taxes Act, Amendment 2 (2006)
11. Louisiana Motor Vehicle Taxes Act, Amendment 4 (2006)
12. Louisiana Exempt Art from Ad valorem Property Tax Act, Amendment 5 (2006)
13. Louisiana Property Tax Bidding Process, Amendment 7 (2010)
14. Louisiana Natural Resource Severance Taxes, Amendment 2 (2010)
15. Louisiana Property Tax Limit, Amendment 4 (2010)
16. Louisiana Homestead Exemption for Disabled Veterans Act, Amendment 1 (2006)
17. Louisiana Tax Exemption for Medical Equipment Act, Amendment 3 (2006)
18. Louisiana Amendment 3 (1996)
19. Louisiana Property Tax Exemption for Veterans, Amendment 3 (2010)
20. Louisiana Homestead Tax Exemption, Amendment 5 (2010)
21. Louisiana Property Tax Sales, Amendment 5 (October 2011)
22. Louisiana Exemptions from Ad Valorem Tax, Act 47 (September 1996)
23. Louisiana Legislature to Exempt Goods from Sales or Use Taxes, Amendment 3 (1996)
24. Louisiana Limits on Tax Proposals Amendment (October 1995)
25. Louisiana Prohibits Local Inheritance Tax, Amendment 9 (October 1990)
26. Louisiana Locally Granted Inventory Tax Exemptions, Amendment 10 (October 1990)
27. Louisiana Allocate Portion of Lignite Tax to Parish, Amendment 15 (October 1990)
28. Louisiana Immovable Property Tax, Amendment 1 (2011)
29. Louisiana Tax Break for Property Improvement, Amendment 11 (October 1990)
30. Louisiana New Orleans Council to Levy Taxes for Police and Fire Department, Amendment 13 (October 1990)
31. Louisiana Tax Exemption for Leasing Property to Nonprofit Organizations, Amendment 12 (October 1990)
32. Louisiana Local Governments to Donate, Loan or Pledge Taxes, Amendment 14 (October 1990)
33. Louisiana Business Property Tax Exemption, Amendment 8 (2012)
34. Louisiana New Iberia Property Tax Exemption, Amendment 6 (2012)
35. Louisiana Property Tax Exemption for Veterans' Spouses, Amendment 4 (2012)
36. Louisiana Permanently Disabled Homeowners Tax Break, Amendment 9 (2014)
37. Louisiana Tax Rebate Debate, Amendment 14 (2014)
38. Louisiana Orleans Parish Tax for Fire and Police Protection, Amendment 6 (2014)
39. Louisiana Tax Collector Involvement in Tax Sales, Amendment 3 (2014)
40. Louisiana Disabled Veterans Homestead Exemption Correction, Amendment 7 (2014)
41. Louisiana Taxation of Property Owned by Another State, Amendment 4 (2015)
42. Louisiana Millage Roll Up Hearing Notice, Amendment 12 (October 1998)
43. Louisiana Homestead Assessment for Seniors, Amendment 8 (October 1998)
44. Louisiana Vidalia Property Tax Exemption, Amendment 18 (October 1998)
45. Louisiana Property Tax Sale, Amendment 17 (October 1998)
46. Louisiana Downtown Residential Property, Amendment 16 (October 1998)
47. Louisiana Municipal Tax Amendment (1968)
48. Louisiana Orleans Levee District Tax Amendment (1970)
49. Louisiana Pontchartrain Levee District Amendment (1970)
50. Louisiana Sewage and Water Board Amendment Three (1970)
51. Louisiana Sewage and Water Board Bond Amendment Five (1970)
52. Louisiana New Orleans Tax Levy Amendment (1970)
53. Louisiana Ad Valorem Tax Amendment (1970)
54. Louisiana License Tax Amendment (1970)
55. Louisiana Commercial Shrimp and Oyster Boat Amendment (1970)
56. Louisiana Bogalusa Tax Amendment (1970)
57. Louisiana Public Improvement Assessments Amendment (1972)
58. Louisiana Vocational Education Tax Amendment (1972)
59. Louisiana Orleans Levee District Amendment (1972)
60. Louisiana Levee District Tax Amendment (1972)
61. Louisiana State Ad Valorem Property Tax Amendment (1972)
62. Louisiana State Tax Amendment (1972)
63. Louisiana Property Tax Relief Fund Amendment (1972)
64. Louisiana Property Tax Valuation Amendment (1972)
65. Louisiana Real Estate Valuation Amendment (1972)
66. Louisiana Levee District of Orleans Amendment (1972)
67. Louisiana Millage Amendment (1972)
68. Louisiana Ambulance Service Amendment (1972)
69. Louisiana Ambulance District Amendment (1972)
70. Louisiana Shrimp and Oyster Boat Amendment (1972)
71. Louisiana New Orleans Tax Amendment (1972)
72. Louisiana Fire Protection Tax Amendment (1972)
73. Louisiana First-Use Tax Amendment (1978)
74. Louisiana Raise Ad Valorem Assessments Amendment (1979)
75. Louisiana Homestead Property Tax Exemption Amendment (1980)
76. Louisiana Ad Valorem Tax on Fuel Amendment (1982)
77. Louisiana Ad Valorem Tax on Property Improvements Amendment (1982)
78. Louisiana Ad Valorem Tax on Coal and Lignite Amendment (1982)
79. Louisiana Homestead Property Tax Exemption Amendment (1982)
80. Louisiana Repeal First Use Tax Fund Amendment (1982)
81. Louisiana Vehicle Inventory Tax Amendment (1984)
82. Louisiana Eliminate Deduction of Federal Tax Paid Amendment (1984)
83. Louisiana Levee District Tax Amendment (September 1986)
84. Louisiana License Tax Amendment (September 1986)
85. Louisiana Property Tax Freeze Amendment (October 1988)
86. Louisiana Property Taxes on Inventory Amendment (October 1989)
87. Louisiana Municipal Property Tax Amendment (October 1989)
88. Louisiana License Tax Amendment (October 1989)
89. Louisiana Tax Incentive for Improvements Amendment (October 1989)
90. Louisiana Lignite Tax Amendment (October 1989)
91. Louisiana Local Sales Tax Collection Amendment (October 1991)
92. Louisiana Property Tax Exemption Amendment (October 1992)
93. Louisiana Homestead Exemption Amendment (October 1992)
94. Louisiana Homestead Tax Exemption Amendment (October 1993)
95. Louisiana Parish Severance Tax Allocation, Amendment 2 (October 1998)
96. Louisiana Homestead Exemption Assessment Level, Amendment 7 (2002)
97. Louisiana Continuation of Homestead Exemption Act, Amendment 8 (September 2006)
98. Louisiana Extend Homestead Exemption Act, Amendment 11 (September 2006)
99. Louisiana Severance Tax Act, Amendment 4 (2008)
100. Louisiana Amendment 1, No Property Tax on Properties Under Construction Measure (October 2017)
101. Louisiana Amendment 2, Property Tax Exemption for Surviving Spouses of Emergency Responders Killed Performing Duties Measure (October 2017)
102. Louisiana Amendment 6, Phase-In of Tax Increases from Property Reappraisal Amendment (2018)
103. Louisiana Amendment 4, New Orleans Affordable Housing Property Tax Exemption Amendment (October 2019)
104. Louisiana Amendment 1, Property Tax Exemption for Stored Materials Routed for Outer Continental Shelf Amendment (October 2019)
105. Louisiana Amendment 2, Reduction of the Maximum Individual Income Tax Rate Measure (2021)
106. Louisiana Amendment 1, Creation of the State and Local Streamlined Sales and Use Tax Commission Measure (2021)
107. Louisiana Amendment 3, Levee Districts and Regional Flood Protection Authorities Measure (September 2006)
108. Louisiana Amendment 2, Property Tax Exemptions for Certain Disabled Veterans and Spouses Measure (2022)
109. Louisiana Amendment 3, Property Tax Exemptions for First Responders Amendment (2023)
110. Louisiana Amendment 4, Prohibit Property Tax Exemptions for Nonprofits Owning Damaged Residential Property Amendment (October 2023)
111. Louisiana Amendment 4, Property Tax Payments and Tax Sales Amendment (December 2024)
112. Louisiana Amendment 2, State Tax and Fiscal Policy Changes Amendment (March 2025)
113. Louisiana Amendment 28, Allow New Orleans to Establish Mosquito Abatement Program Amendment (1964)

Recent news

The link below is to the most recent stories in a Google news search for the terms Louisiana taxes. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Tax policy in Louisiana - Google News

Contact information

Louisiana Department of Revenue

617 North Third Street

Baton Rouge, LA 70802

Phone: 855-307-3893

Website: http://www.rev.state.la.us/default.aspx

See also

• Louisiana
• Louisiana state budget and finances
• Personal income tax
• Sales tax
• Corporate income tax
• Property tax

External links

• Tax Policy Center
• Federation of Tax Administrators
• Tax Foundation

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