Louisiana has created the most competitive tax code in its history, making the state one of the most pro-growth business environments in the nation. As of January 2025, Louisiana offers low flat tax rates, permanent full expensing, and has eliminated the corporation franchise tax effective January 1, 2026.
Key Advantages:
- Flat personal income tax: 3% with a $12,500 deduction for single filers and $25,000 for married filing jointly.
- Flat corporate income tax: 5.5% with a $20,000 standard deduction.
- Elimination of the corporation franchise tax: Effective January 1, 2026.
Permanent Full Expensing:
Louisiana is one of only three states allowing permanent full expensing, enabling businesses to deduct the full cost of qualifying investments in the year placed in service. This reduces up-front costs and encourages reinvestment.
What Qualifies for Full Expensing:
- Qualified Property: Most business equipment and machinery (e.g., manufacturing equipment, computers, vehicles, office furniture).
- Qualified Improvement Property: Interior upgrades to commercial buildings (e.g., HVAC systems, electrical work, plumbing, renovations).
- Research and Experimental Expenditures: Investments in new products, technology, or software development.
Contact:
Ileana Ledet — Chief Economic Competitiveness Officer
Ileana.ledet@la.gov
504-214-1812
For more information, visit Tax Competitiveness.