Taxes in Louisiana
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Louisiana tax laws favor retirees and homeowners. Plus, the state has plans to lower (again) the income tax rate in the future. Below, we explain various Louisiana state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
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Louisiana Tax Rates
|State Sales Tax||4.45%|
|Avg State/Local Sales Tax||5.10%|
|Gas Tax||$0.20 per gallon|
|Diesel Tax||$0.20 per gallon|
|Cigarette Tax||$1.08 per pack|
|Effective Tax Rate:||4.25%|
|Social Security Tax||None|
|Federal Income Tax Deduction:||Yes|
Louisiana State Taxes Explained
Louisiana Sales Tax
4.45%, but local sales taxes increase the rate to 7% on average. Groceries and prescription medications are exempt from state sales tax but not necessarily local sales tax.
Louisiana Income Taxes
Lousiana’s max income tax rate is 4.25%. In April 2024, and every year thereafter, the personal income tax rates will be reduced each year if certain fiscal income revenue requirements are met.
Louisiana Property Taxes
The average effective property tax rate in Louisiana is 0.55%. This amount varies by parish or municipal district. Homeowners pay $890 on a $163,100 home, the median home value in Louisiana.
Louisiana’s Homestead Exemption reduces the assessed value of a residential property by $7,500. The amount is doubled for military veterans with a 100% service-related disability and their surviving spouses. The homestead exemption is permanent if the home is sold or the taxpayer no longer uses it as the primary residence.
Homeowners who are 65 or older and meet income requirements may apply to have their property value frozen. The gross income level is set by the state and changes annually. This benefit is lost if the homeowner improves more than 25% of the home’s value.
Call (225) 925-7830 for additional details on income verification and exemption amounts.
Louisiana Retirement Taxes
You may deduct your total federal income tax liability minus any nonrefundable federal tax credits claimed.
Louisiana exempts federal, state and local government retirement income from taxes. Louisiana residents who are 65 years of age or older can exclude up to $6,000 of annual retirement income from taxable income. Joint filers who meet the age qualification may take that exclusion. If only one spouse has retirement income, the exclusion is limited to $6,000.
Deferred income from the municipal and state police employees’ retirement is exempt from state income tax. See Louisiana Income Tax FAQ for more information.
The state does not tax retired military pay.
Louisiana Estate and Inheritance Taxes
Louisiana has no inheritance tax or estate tax.