Tax in Louisiana: a complete guide
When you start exploring the tax landscape in Louisiana, you will find some quirks you’ll want to understand before committing to a move there. Here we highlight the highs and lows that make Louisiana distinctive, such as its three income tax brackets and low property tax.
Louisiana is a state of quite large contrasts when it comes to taxation.
Some are well above average, while others are comfortably below. State income tax ranges from 1.85 percent to 4.25 percent – just a little over the average in the other 49 states. State and local sales taxes average around 9.55 percent – which is close to the highest in the country.
By contrast, property taxes are some of the lowest anywhere in the United States, and there are special tax breaks for retirees. The Bayou State has much to offer as a region to settle in, but another question is whether the tax laws fit your personal and financial profile.
Louisiana income tax
Louisiana collects income tax using a tiered system with three tax brackets. The rates are 1.85 percent, 3.5 percent and 4.25 percent, increasing as income rises. The top rate puts the state in the top 20 highest across the US.
To calculate the tax you owe in Louisiana, you need to make certain additions and subtractions to your federal adjusted gross income (AGI). The amount you’re left with is what Louisiana will use to decide your state-specific tax rate — also known as Louisana taxable income.
The tables here show the three income tax brackets applied to single filers, joint married filers, and married people filing separately.
Single filers
| Louisiana taxable income | Rate |
|---|---|
| Louisiana taxable income | Rate |
| $0 – $12,500 | 1.85 percent |
| $12,500 – $50,000 | 3.50 percent |
| $50,000+ | 4.25 percent |
Married joint filers
| Louisiana taxable income | Rate |
|---|---|
| Louisiana taxable income | Rate |
| $0 – $25,000 | 1.85 percent |
| $25,000 – $100,000 | 3.50 percent |
| $100,000+ | 4.25 percent |
Married filing separately
| Louisiana taxable income | Rate |
|---|---|
| Louisiana taxable income | Rate |
| $0 – $12,500 | 1.85 percent |
| $12,500 – $50,000 | 3.50 percent |
| $50,000+ | 4.25 percent |
Louisiana sales tax
The sales tax rate in Louisiana is four percent, comprised of 3.97 percent sales tax and 0.03 percent Louisiana Tourism Promotion District sales tax. The political subdivisions across the state also levy their own sales tax. Louisiana additionally has a use tax applied to goods purchased out of state.
There are plenty of useful state-level exemptions to consider, and these include:
Income from federal, state and local government
Military retirement plans
Railroad Retirement benefits
Groceries
Prescription drugs
Diapers and feminine hygiene products
Here are some Louisiana alcohol and tobacco taxes to fill in the sales tax picture:
Cigarettes—$1.08 per pack
Other tobacco products—20–30 percent of the manufacturer's price
Beer—$0.32 per gallon
Wine—$0.11 per gallon
Liquor—$2.50 per gallon
Louisiana property tax
The Bayou State has one of the lowest property tax rates in the US, at 0.56 percent.
The tax is assessed and collected locally – your parish or municipality – not by the Louisiana Department of Revenue. As a property owner, you must file a tax return with the relevant assessor before April 1 or within 45 days of your tax return form receipt.
There are some useful tax breaks for retirees in Louisiana. If you’re 65 or older, you can have the tax-assessed value of your property frozen. To qualify, you need to meet income guidelines set each year, and this freeze will be permanent unless you no longer live in the property or its value increases by more than 25 percent because of improvements.
As of June 2023, the average property price in Louisiana is $200,370, a 1.4 percent decrease over the last 12 months.
Louisiana motor tax
The state collects four percent sales tax on the purchase of any vehicle, but there are also local taxes of up to six percent. Remember that you may also have to pay registration, title and license plate fees.
Louisiana taxes gasoline at $0.20 per gallon plus an additional $0.01 in local taxes and fees.
Louisiana estate tax
Some very good news on estate and inheritance tax: Louisiana is one of 33 states that do not levy the taxes.
Louisiana retirement tax
Louisiana presents a relatively friendly tax environment for those planning to move there—particularly those aiming to retire. The state doesn’t tax Social Security benefits or income from public pensions. Retirement income such as that from private pensions, 403(b)s, 401(k)s and regular IRAs is taxable, but you get an exclusion of $6,000 per person once you’re over 65.
It also has the fifth lowest property taxes in the country. The downsides include high sales taxes and tax on some retirement savings accounts.
For further tax guidance and to ensure you’re not paying more tax than you need to, it’s wise to speak to an expert. A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.