Louisiana
Taxes and business formation • USA 2025–2026
LLC in Louisiana
Corporation in Louisiana
Tax system of Louisiana
Income Tax
Louisiana applies a flat personal income tax rate of 3%. This is one of the lowest rates among states that have a personal income tax at all.
Sales Tax
Louisiana's base sales tax rate is 4.45%, but local authorities can impose their own surcharges. As a result, the combined rate can exceed 10%, especially in cities such as New Orleans and Baton Rouge. Sales tax applies to many goods and services, including rentals, digital content, communication services, repairs, and short-term real estate rentals. Prescription medications, most groceries, and certain agricultural and manufacturing inputs are exempt. Due to the complex rate structure and differences between municipalities, determining the correct tax rate and registration requirements requires deep knowledge of local law. Our firm provides services for obtaining a Sales Tax Certificate and for preparing and filing the Sales and Use Tax Return. We advise business owners on registration, calculation, and reporting.
Property Tax
Louisiana is known for having one of the lowest property tax rates in the country. The average effective rate is about 0.52% of market value. In New Orleans and other large parishes, the tax can be higher due to additional municipal charges. Primary residences (homesteads) are exempt from the taxable base for up to $75,000, which significantly reduces the tax burden for most homeowners. Commercial real estate is taxed in full.
Business Taxes
Until 2025, Louisiana imposed a corporate income tax on C-corporations on a progressive scale from 3.5% to 7.5% depending on taxable profit. Starting January 1, 2025, a flat rate of 5.5% applies to corporate taxable income. The tax base is federal taxable income with adjustments, including the ability to fully expense qualified property and R&D costs in the year they are incurred. S-corporations, LLCs, and partnerships generally do not pay corporate income tax, but may be subject to a Franchise Tax (tax on capital) levied on companies registered in the state. The minimum amount is $110 per year, even with no profit; this tax is scheduled to be eliminated as of January 1, 2026. In addition, all companies are required to file an Annual Report each year with the Louisiana Secretary of State.
Excise Taxes
Louisiana levies excise taxes on a wide range of goods: alcoholic beverages, tobacco products, gasoline, diesel fuel, and car rentals. The sale of medical and recreational marijuana is also subject to special taxes and licensing at the state level. Hotel and tourism services in resort areas may be subject to additional local taxes.
Favorable Tax Conditions
• A flat personal income tax rate of 3% — one of the lowest among states that have an income tax at all; • A flat corporate tax rate of 5.5% is below the U.S. average; • The Franchise Tax will be repealed as of January 1, 2026; • Low property tax rates.
Compared to Other States
• The 3% flat personal income tax is lower than in Illinois (4.95%), Michigan (4.25%), or Utah (4.65%); • Louisiana offers low property taxes compared with most states; • However, the sales tax system is complex, and the combined rate can be very high; • Thanks to strategic support programs and affordable corporate tax rates, Louisiana remains an interesting choice for investors and entrepreneurs.
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