Some wage earners could see a paycheck with a few dollars more next year. Starting Jan. 1, Louisiana will have a flat 3% individual income tax rate across the board. Changes from the special session that ended before Thanksgiving will also impact 2025 state income tax filing.
Corporate income will be taxed at 5.5%. State sales taxes will go from 4.45% to 5%. Research and think tank groups question whether lower income earners will see any gain, or worse.
“The bottom line effect of the total tax package on the state budget and taxpayers isn’t entirely clear,” according to the Nov. 26 report from the Public Affairs Research Council (PAR). “It’s possible lower-income earners may see most, if not all, of the money gained from the income tax cut paid out on the increased sales tax.”
Gov. Jeff Landry called the hashed out plan a win for all. In a speech closing the special session last Friday, he said four things were accomplished: a tax cut for everyone, a more competitive state, a pay raise for teachers and a simplified tax code eliminating special interest loopholes. (In his opening speech for that session, he said the current system had 215 exemptions.)