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.
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.
Starting January 1, 2025, Louisiana moved to a flat income tax rate, simplifying things for many taxpayers.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In the News:
Louisiana has just revamped its tax system and the changes that kick in next year could significantly impact residents' wallets. Led by Gov. Jeff Landry, this 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
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 next year, 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
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
Gasoline | $0.20 per gallon |
Diesel | $0.20 per gallon |
Source: Sales Tax Handbook
Louisiana alcohol and 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
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.
Related Content
-
Retirement Health Care Costs Are On the Rise: What You Need to KnowA 65-year-old retiree will face significantly higher lifetime health care costs than they would have a year ago, even with Medicare. Here are the surprising totals.
-
Virginia Tax-Free Weekend 2025 Is Here August 1–3: What to KnowSales Tax Three days, no sales tax. Here’s what qualifies for Virginia’s tax-free weekend.
-
Five Ways Trump’s 2025 Tax Bill Could Boost Your Tax Refund (or Shrink It)Tax Refunds The tax code is changing again, and if you’re filing for 2025, Trump’s ‘big beautiful’ bill could mean a bigger refund, a smaller one or something in between next year. Here are five ways the new law could impact your bottom line.
-
New SALT Deduction Could Put Thousands Back in California Homeowners’ PocketsTax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
Money for Your Kids? Three Ways Trump's ‘Big Beautiful Bill’ Impacts Your Child's FinancesTax Tips The Trump tax bill could help your child with future education and homebuying costs. Here’s how.
-
Why Your Summer Budget Feels Tighter: Tariffs Push Up InflationTariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Alabama Tax-Free Weekend 2025Tax Holiday Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
Key 2025 Tax Changes for Parents in Trump's MegabillTax Changes Are you a parent? The so-called ‘One Big Beautiful Bill’ (OBBB) impacts several key tax incentives that can affect your family this year and beyond.
-
‘I Play Pickleball in Retirement.’ Is It HSA-Eligible?Retirement Tax Staying active after you retire may be easier with these HSA expenses. But there’s a big catch.
-
Mississippi Tax-Free Weekend 2025Tax Holiday Just in time for Prime Day, Mississippi celebrated a tax holiday in July. Find out what back-to-school essentials were included.
