Louisiana Tax: Guide to Income, Sales, Property, and Retirement Taxes

Louisiana flag in the sky for Louisiana state tax guide

(Image credit: Getty Images)

Navigating the complexities of state taxes can be daunting, but understanding Louisiana's tax landscape is essential for residents and newcomers alike.

In this guide, we'll explore key components of The Bayou State's tax system, from income and sales taxes to property taxes and retirement benefits.

Louisiana state tax: Overview

Louisiana keeps things pretty affordable when it comes to owning a home. The state has one of the lowest property tax rates in the country, which is a welcome break for homeowners.

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On the flip side, sales taxes are on the higher side. But the good news is that essentials like groceries, diapers, and some feminine hygiene products are exempt from state sales tax, which helps keep everyday costs in check.

As of January 1, 2025, Louisiana moved to a flat income tax rate. Led by Gov. Jeff Landry, the comprehensive reform is designed to simplify the state’s tax code and make Louisiana more competitive for businesses and families.

For more information, see Louisiana Has a New Income Tax.

[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]

Louisiana income tax

Cathedral of Saint John the Evangelist, Lafayette, Louisiana

Louisiana moved to a flat 3% income tax rate in 2025, replacing the tiered system.

Louisiana retirement taxes

Louisiana tax on retirement benefits: There is no state income tax on Social Security retirement benefits or federal retirement benefits (including military and non-military). Several state retirement benefits are also not taxed in Louisiana.

Taxpayers age 65 and older can also exclude up to $6,000 of annual retirement income from their taxable income. If filing jointly, each spouse can exclude up to $6,000. However, only one exclusion is permitted if one spouse is under age 65.

Note: Beginning in 2026, due to new legislation, the retirement income exemption will double to $12,000.

Social Security: Not Taxable
Pensions: Taxable (Public and government pensions are exempt)
401(k) and IRA Distributions: Taxable

Louisiana sales tax

Still life of a small shopping cart with $1 USD bills

Louisiana's state sales tax is 5%. Localities can add as much as 8.5%, and the average combined sales tax rate is 10.12%, according to the Tax Foundation.

Note: Louisiana increased its state sales tax rate from 4.45% to 5% for five years beginning Jan. 1, 2025.

According to the Tax Foundation, that will make Louisiana's combined state and local sales tax rate the highest in the nation.

(In six years, 2030, the Louisiana state sales tax is scheduled to be reduced to 4.75%.)

Groceries: Exempt
Prescription Drugs: Taxable
Diapers and feminine hygiene products: Exempt

What is the property tax rate in Louisiana?

In Louisiana, the average effective property tax rate is 0.55%, which is currently one of the lowest property tax rates in the U.S.

Louisiana Property Tax Breaks for Retirees

Special Assessment: Eligible homeowners 65 and older can have the tax-assessed value of their property frozen.

To qualify, residents must meet income guidelines that are set each year. The freeze is permanent unless one of the following applies.

You no longer live in the home
The value of the property increases by more than 25% due to construction or renovation

Note: Homeowners under age 65 may also qualify for the property tax freeze, including those with a disability and surviving spouses of some Louisiana National Guard members (applies in only some circumstances).

Louisiana gas tax

rendering of a yellow car against a yellow background

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Gasoline	$0.20 per gallon
Diesel	$0.20 per gallon

Source: Sales Tax Handbook

Louisiana alcohol and tobacco taxes

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Louisiana tobacco taxes
Product	Tax Amount
Cigarettes	$1.08 per pack
Cigars	8%-20% of manufacturer's price
Snuff/Smoking Tobacco	20%-33% of manufacturer's prce
Medical marijuana	7%

Source: Sales Tax Handbook

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Louisiana alcohol taxes
Product	Tax Amount
Wine	$0.11 per gallon
Beer	$0.32 per gallon
Liquor	$2.50 per gallon

Source: Sales Tax Handbook

Louisiana estate and inheritance taxes

Louisiana is one of the many states with no estate or inheritance taxes.

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.