Tool | August 2013
State-by-State Guide to Taxes on Retirees
State Sales Tax
4%. Local parishes and jurisdictions within those parishes may add their own sales taxes, which can boost the total to 10.75%. Food, drugs, wheelchairs and prosthetic devices are taxed locally. Electricity and water utility services are taxed at 3.8%. Interstate telecommunication services are taxable at 2%.
Income Tax Range
Low: 2% (on less than $12,500 of taxable income)
High: 6% (on more than $50,000 of taxable income). Residents can deduct all of their federal income tax from state taxable income.
Social Security benefits are not taxed.
Exemptions for Other Retirement Income
People 65 or older may exclude up to $6,000 of annual retirement income from their taxable income. Federal retirement benefits, both military and nonmilitary, may be excluded from Louisiana taxable income. In addition, deferred income from municipal and state police employees' retirement plans is exempt from state income tax.
Taxes are assessed and collected at the local level by 64 parishes and seven municipal districts. Property assessments are based on 10% of the fair market value of the property. Homeowners receive a homestead exemption of $7,500 of their home's assessed value. However, this exemption does not generally apply to municipal taxes. Median property tax on the state's median home value of $135,400 is $243, according to the Tax Foundation.
Tax breaks for seniors: Homeowners who are 65 or older with adjusted gross income of less than $65,891 in 2013 can benefit from freezing the assessed value of their homestead for as long as the applicant owns and resides in the home and income does not exceed the maximum allowed. This benefit is lost if improvements in excess of 25% of the home's value are added.
There is no inheritance tax or estate tax.
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