Louisiana Enacts Significant Tax Changes

Key Takeaways:

• Louisiana adopted a 5.5% flat corporate income tax rate and a 3% flat individual income tax rate, replacing graduated rates.

• The corporate franchise tax will be repealed starting in 2026.

• The sales and use tax rate increased to 5% in 2025, with new rules clarifying taxation and exemptions for digital products, software, and services.

• Businesses and individuals can claim bonus depreciation and amortization deductions, but several tax credits will sunset in 2025. Voters will decide on further tax reforms in a March 2025 election.

After completion of a special legislative session focused on tax reform initiated by Louisiana Governor Jeff Landry, he signed multiple tax bills leading to significant reforms in corporate franchise tax, corporate income tax, personal income tax, and sales tax. Governor Landry predicts these tax changes will make Louisiana more attractive to businesses and enable Louisianans to keep more of their