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Tool | August 2013

State-by-State Guide to Taxes on Retirees

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Louisiana

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The Bottom Line
Map of Louisiana

TAX-FRIENDLY

One of Kiplinger's top ten most tax-friendly states for retirees, the Pelican State offers a bayou full of tax breaks to retirees. Social Security, military, civil-service, and state and local government pensions are exempt from state income taxes. Up to $6,000 per person of pension and annuity income are exempt from income taxes. Personal income tax rates are low. Property taxes are among the lowest in the nation, and assessments are based on 10% of the fair market value.

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)

Social Security

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.

Property Taxes

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.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.

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