BATON ROUGE, La. — In your Breakdown: Louisiana’s special session to change the tax code has finished. Here’s how things will be changing.
Louisiana’s income tax will now be a flat 3 percent, down from 4.5 percent for those who make more than $50,000.
The Corporate income tax is lowered to a flat 5.5 percent, down from the highest tier of 7.5 percent.
And sales tax will go up to 5 percent, though Louisiana already has the highest combined sales tax in the country.
Sales tax will be implemented for the first time on digital products, like streaming and audiobooks.
And pending a constitutional amendment, teachers will get a $2,000 raise and the standard deduction for seniors will double.
Here’s the context:
That’s not everything Governor Jeff Landry asked legislators for, but he calls it a win. He says it will make Louisiana more competitive.
Many things are not changing.
The homestead exemption – and tax exemptions on groceries and prescriptions – will stay the same.
Lawmakers quashed Landry’s efforts to eliminate film tax credits and historic building restoration tax credits in Louisiana.
Plus, they axed this list of dozens of services and items that Landry wanted to begin taxing for the first time.
In exchange, lawmakers passed a bigger sales tax hike that Landry proposed.
While all Louisianans will save a percentage of their income, those with higher incomes will save a higher dollar amount. And everyone will be paying more in sales tax.
House Bill 7, which would give a permanent pay raise to teachers and double the standard deduction for seniors, will go to the voters as a proposed constitutional amendment.
The rest of the package will now go to Landry’s desk for signing.
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