The various types of Louisiana taxes span the spectrum from the lowest in the United States to the highest, depending on which area of the state you're incurring a tax obligation and the kind of tax being levied.
Doing your state taxes can be a headache — especially after completing your federal taxes. Check out the information below for a dive into the tax costs in the state of Louisiana, and to better understand how paying taxes in Louisiana can be expected to impact personal finances.
Overview of Louisiana State Taxes
The federal government guarantees individual states the right to tax their residents on top of what the federal government levies. Louisiana’s state tax burden ranges from pretty low to quite high depending on the individual tax, but overall, it’s in the middle of the pack taxation wise.
Louisiana State Taxes: Quick Facts
Income tax: 2% - 6%
Sales tax: 4.5% - 11%
Property tax: 3.05%
State taxes are put toward societal necessities like schools, emergency services, and infrastructure maintenance, so they’re pretty important. You want to make sure that your taxes are filled out and filed correctly, so be sure to read through out guide to Louisiana Taxes to see what taxes you’re subject to as a Louisianan.
Annual 2019 Tax Burden ($75,000/yr income)
Total Estimated Tax Burden
Remaining Income = $59,962
Louisiana State Tax Brackets
The Louisiana state income tax brackets applied to taxable income in the state are the same as the income tax brackets designated by the federal government for income tax purposes. The Louisiana tax brackets applied for income tax filings are: Single Filers, Married, Filing Jointly, Married Filing Separately, and Head of Household.
Here are the Louisiana state tax rates for each income bracket, along with the increasing percentage rates assessed on increased income. For the complete tax table of dollar amounts of tax to be paid per dollars of taxable income, see the Louisiana Department of Revenue Income Tax Tables:
Single Filers, Married Filing Separately, and Head of Household
State Income Tax Rate
$0 - $12,500
$12,500 - $50,000
Married Filing Jointly
State Income Tax Rate
$0 - $25,000
$25,000 - $100,000
Louisiana Personal Income Tax
Louisiana income taxes paid, in terms of percentage of income, average around 7.6%.
Per capita income in the state is $43,660, the 11th lowest in the country, according to a USA Today report.
Per capita income tax is around $612, the 13th lowest, per the report. The Louisiana income tax rate for individual taxpayers ranges from a low of 2% to a high of 6%, which is just a little above the U.S. national average.
Louisiana state income tax rates are applied to earners' taxable income, which is based on their IRS 1040 Adjusted Gross Income, plus other income that is taxable in Louisiana, and minus exemptions, deductions, and income from sources that are not taxable in Louisiana.
State taxes paid in Louisiana include income tax on dividends and interest income. Taxable amounts are added back into the Adjusted Gross Income figure taken from the taxpayer's federal filing form.
After all the calculations of rates and offsets, the Louisiana state tax rate is the United States' 19th highest top marginal individual income tax rate according to the state governments study, "Louisiana Fiscal Reform" (2015).
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In Louisiana, both short-term and long-term capital gains are considered regular income for state tax purposes and are taxed at rates from 2% to 4%, based on an individual's taxable income total.
An exception to taxing capital gains as income on state tax filings applies to capital gains from sale of a business or of one's interest in a business that is not publicly traded. This includes incorporated businesses, partnerships, and Limited Liability Companies (LLCs).
Louisiana Sales Tax
The state sales tax rate in Louisiana is 4.45%, as of July 2018. In various areas of Louisiana, total sales tax rates can get near 11%, with county and city taxes added to the state rate. In other areas of the Pelican state, consumers pay under half of that rate.
Individual counties (called parishes in Louisiana) and cities levy their own sales tax rates. Adding those tax percentages in the individual parishes and cities to the state's base sales tax totals up to much higher sales tax rates, as much as to 11.45%, for consumers in Louisiana than in a number of other states.
Louisiana state sales tax applies to any personal property purchased in the state. This includes furniture, electronics, clothing, sporting goods, housewares, jewelry, and many other items of personal value. Sales tax is also applied to various services, including telecom services, parking services, hotel room rentals, tickets for admission to entertainment or sports events, repair services, etc..
With 2018 changes to Louisiana sales tax laws, a sales tax in the amount of 2% is applied to purchases of energy, which were exempt from sales tax prior to July 2018. Sales tax is now applied to the distribution, storage and use of electrical power, natural gas, steam power, and purchase of energy from other sources in Louisiana.
Products that are exempt from Louisiana sales tax include prescription drugs, medical devices such as prosthetics, grocery foods for consumption at home, and other items.
sales tax holidays have been discontinued for seven years in Louisiana, as part of the 2018 changes to the state tax rate laws.
Louisiana Excise Tax
The flat excise tax on gasoline in Louisiana is $0.20 cents per gallon currently. This rate applies to regular grade gasoline as well as diesel fuel. Ethanol and gasohol are taxed at the same rate as gasoline and diesel. Biodiesel is taxed at the same rate as gasoline or other fuel.
Special Fuels and all other fuels, with the exception of liquefied natural gas, compressed natural gas, and liquefied petroleum gas are all taxed at a rate of $0.20 per gallon. For more information about taxation rates on these types of fuels, see the Louisiana Department of Revenue's FAQ’s on Special Fuels Tax.
Louisiana's flat excise tax on cigarettes is $1.08 per pack (at 20 cigarettes per pack). This makes Louisiana among the least expensive places in the United States to smoke cigarettes, in terms of state excise tax. It's #14 from the bottom in cigarette tax rates nationwide. In addition to the state's $1.08 excise tax per pack, however, smokers also pay regular Louisiana state sales tax of around $0.21 per pack. So, all together, the total tax on a pack of cigarettes in Louisiana is about $1.29.
One of the biggest benefits of Louisiana’s tax codes is the fact that the state has nearly the lowest property tax rate in the nation. It’s effective tax rate amounts to around $869 per capita, which is reportedly the 8th lowest in the country according to USA Today. This Louisiana tax rate makes the Bayou State an attractive place to live, not only due to its natural beauty and southern charm, but also because of its low residential real estate property taxes.
The average rate amounts to an effective property tax rate of around 0.52% of home value annually — the third lowest nationwide. The highest taxed parish is St. Tammany Parish, at 0.66% of the median income, while the lowest rate is found in St. Landry Parish, at 0.25% of the median income.
Louisiana Inheritance and Estate Taxes
There is no estate tax in Louisiana. All state inheritance taxes have been repealed by the state. Therefore, heirs are not required to file a Louisiana state tax return for purposes of reporting inheritance, and zero estate tax is owed to the state. See the Louisiana Department of Revenue information on the repeal of the estate tax.
Currently, the U.S. federal government taxes estates valued at more than $11 million per individual. A tax rate of 40% is levied on assets that are taxable under the federal estate tax law.
Louisiana Tax Credits
Taxing authorities have a number of different ways to relieve taxpayers. Tax credits reduce the amount someone owed on their taxes, dollar-for-dollar. Exemptions and deductions, on the other hand, reduce the amount of income or assets that are taxable.
Louisiana offers a number of tax credits (as well as exemptions and deductions, covered in the next section) to help relieve taxpayers. Be sure to read through the list to see if any apply to your tax situation.
School Readiness Tax Credit
Louisiana enacted a series of tax credits to provide relief to families raising children, child care providers, daycare facilities, and other services involved with raising children.
This is a package of different credits available to different childcare workers. Check the Louisiana Department of Revenue website to see whether any of the specific credits in this package apply to you.
Louisiana Citizens Insurance Tax Credit
For those affected by the devastating hurricanes Katrina and Rita, Louisiana offers a tax credit on insurance-related expenses. See the Department of Revenue website for more details on whether this may apply to you.
Earned Income Tax Credit (EITC)
Louisiana offers tax credit relief to working families. Mirroring the federal program of the same name, Louisiana offers anyone eligible for the federal earned income tax credit a state equivalent. Louisiana’s earned income tax credit is 5% of the federal credit.
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The state of Louisiana offers a number of exemptions and deductions — reductions on the amount of your income that’s taxable — to help relieve some of the burden on taxpayers. These are the categories that those exemptions and deductions fall under.
The state's standard . The deduction is $9,000 for people filing a joint return, or filing as head of household. Louisiana adds a $1,000 personal exemption for dependents.
Additionally, the state allows a deduction of the amount of itemized deductions that exceed the standard deduction on their IRS returns. Louisiana also permits deductions of school expenses paid for dependents who are students.
Income from other sources that are also subtracted from taxable income include Social Security income, federal retirement benefits, and a maximum of $6,000 in other retirement income, for Louisiana taxpayers of age 65 or above. Income that can be subtracted also includes teachers' and other state workers' retirement benefits.
There is no tax on retirement Social Security benefits or on public pension income in the state of Louisiana.
However, Income tax is applied to income that retirees aged 65 or over collect from their retirement savings accounts in amounts over $6,000 total annually. For retirees age 65 or over who are married filing jointly, both spouses are entitled to the exclusion of their first $6,000 of annual retirement income from their taxable income.
If one spouse does not have taxable income, then the $6,000 exclusion applies only to the spouse who does have taxable income for the year in question.
For retired federal military and nonmilitary employees, federal retirement benefits can be excluded from taxable income on Louisiana state tax returns.
Louisiana tax law defines "annual retirement income" as annuity or pension income that is included as "tax table income," per state tax statute R.S. 47:293.
Teachers and Louisiana state employees are entitled to a Retirement Benefits Exclusion. This exclusion applies to income earned by workers who receive these benefits paid through retirement systems operating under Louisiana Revised Statute Chapter 1 Title 11. Those employees may exclude these benefits from the state tax-table income.
Funds disbursed from Deferred Retirement Option Plan (DROP) accounts are also exempt from individuals' Louisiana state income tax liability. DROP is retirement program that permits workers to freeze their monthly retirement benefit disbursements, and instead have the funds deposited into a different account.
This allows them to continue working and earning their salaries from a school or Teachers' Retirement System of Louisiana (TRSL) reporting entity. It's another form of retirement benefits that is exempt, under Louisiana Revised Statute Chapter 1 Title 11.
Sales Tax Exemption on Hurricane Preparedness Provisions
For a few of days in May, residents of Louisiana can take advantage of opportunities to purchase hurricane emergency provisions at a reduced state sales tax rate on purchase of the first $1,500 of eligible items. The Louisiana Hurricane Preparedness Sales Tax Holiday is scheduled every year for the last full weekend (Saturday and Sunday) prior to June 1st, which is the beginning of hurricane season in the region.
Items such as those on the list below can be bought at a discount on state sales tax during the annual hurricane tax holiday, reducing the rate to only 3% for those two days.
Many important items on the list will upgrade your home's hurricane preparedness as well as your household's general emergency readiness level. Items eligible for the sales tax discount during the annual weekend tax discount event, according to the Louisiana Department of Revenue's published list include:
Self-powering portable light sources, such as flashlights, candles, lanterns, etc.
Self-powered portable radio, including two-way radios, or weather radio
Packages of batteries, such as AAA, AA, C-cell, D-cell, 6- or 9-volt (Automobile and boat batteries are not exempted.)
Cell phone battery and phone charger
Non-electric coolers for food storage
Any type of storm shutters
Carbon monoxide detector of any kind
Reusable freezer ice packs
Fuel tank for gas or diesel
Portable generator for power outage
Flexible waterproof sheeting material, such as tarpaulins
Ground tie-down or anchoring kit
The state sales tax exemption for these items does not necessarily extend to the local parish's or city's tax rate for the same items. The regular rate of local sales tax should be assumed to apply, unless otherwise indicated by the individual parish or city.
Use an online Louisiana tax calculator to determine your total tax burden when working and living in Louisiana. When calculating your tax obligations in the Sugar State, remember to capture the local tax rates charges by parishes and individual cities, in order to obtain the fullest picture of tax costs in Louisiana.
How to Pay Louisiana Taxes
Once it comes time to pay your Louisiana taxes, you’ll want to know how to file. The Department of Revenue offers a few options:
You can pay by credit card, but keep in mind that a convenience fee will be assessed based on the amount paid.
Louisiana allows taxpayers to set up a six month payment plan, however delinquent fees will be assessed on those who do not pay in time.
Louisiana Tax Payment Schedule
Louisiana Tax Facts
Louisiana is the only state in the Union whose legal code is based on Roman Law rather than English Common Law.
Because of individual parishes’ sales tax rates, Louisiana’s sales taxes are among the highest in the country.
Louisianans get a second-amendment sales tax holiday in early September, exempting guns and ammunition.
Summary of Federal Taxes
Remember, once you’ve paid your state taxes, your federal taxes are also due. If you haven’t filed them already, be sure that you’re filling out and filing all necessary federal tax forms. If you need a little extra help navigating the confusing combination of state, local, and federal taxes, our dedicated team of Community Tax preparation specialists is here to help!
Summary of Federal Taxes
Remember that Louisiana state taxes are separate from federal state taxes, and that the Louisiana tax brackets are different at a state level.
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