Louisiana Tax and CPA Services: State, County and City Taxes

Louisiana has overhauled its tax code in recent years: a flat individual income tax replaced graduated brackets starting in 2025, the corporate rate was set at a single rate, and the corporation franchise tax is gone for periods beginning in 2026. Sales tax, however, remains layered, because parishes and cities add their own taxes. This page explains the state rules for residents, workers, business owners and employers. We serve Louisiana clients remotely from our Naperville, Illinois office.

Individual income tax

The Louisiana Department of Revenue explains that for taxable years beginning before 2025, tax was figured on a graduated scale. Rates were 2, 4 and 6 percent for 2009 through 2021 and 1.85, 3.5 and 4.25 percent for 2022 through 2024. For tax years beginning on or after January 1, 2025, income tax is computed at a flat rate of 3 percent for every filing status and income level.

Residents who must file a federal return file Form IT-540, reporting all income, and Louisiana also taxes income that a resident earns in another state. A temporary absence from Louisiana does not change residency. Part-year residents and nonresidents with Louisiana-source income who must file a federal return also file in Louisiana. Gambling winnings earned in Louisiana are Louisiana-source income, and nonresident professional athletes must file Form IT-540B for income earned in the state. Returns and payments are due May 15 of the following year, which differs from the federal April deadline. A six-month automatic extension to file exists, with no form required, though it does not extend the time to pay.

Estimated tax payments are required if estimated Louisiana tax after credits and withholding is expected to exceed $1,000 for single filers or $2,000 for joint filers, with a safe harbor of 90 percent of the tax due. Louisiana residents who are armed services members stationed outside the state on active duty for 120 or more consecutive days may qualify for a deduction. See our multi-state tax service for split-year or multi-state situations.

Business taxes

For tax periods beginning on or after January 1, 2025, Louisiana corporation income tax is imposed at a flat rate of 5.5 percent. The corporation franchise tax is repealed for franchise tax periods beginning on or after January 1, 2026, though corporations may still have filing obligations for earlier periods. Corporation returns should be filed electronically when required.

Partnerships can file composite returns for nonresident partners. For tax periods beginning on or after January 1, 2022, the composite rate is 4.25 percent of the total distributive shares of the nonresident partners included, down from 6 percent. Louisiana requires electronic filing of all composite partnership returns, and partnerships get the same six-month automatic extension. Check the Department's current guidance on any entity-level election for the federal SALT cap; see SALT deduction and property taxes.

Sales and use tax

The state general sales tax rate is 5 percent. The tax is imposed on retail sales of tangible personal property and digital products, on use or storage in Louisiana, on leases and rentals, and on specified services. Those include hotel rooms, admissions to amusements, parking, laundry and cleaning, repairs and maintenance, prewritten software access services and cable and satellite video. Cable and satellite services bear an additional 5 percent state tax. Returns are due the 20th of the month after the period. Parishes and cities impose their own sales taxes in addition to the state rate, so sellers should check each jurisdiction where they sell or deliver. Louisiana also has a consumer use tax for items bought without tax, and periodic sales tax holidays, such as a weekend for hunters. See sales tax nexus and our sales tax service.

Payroll in Louisiana

• Withholding: every employer with resident or nonresident employees performing services in Louisiana must withhold Louisiana income tax unless exempt, based on the employee's withholding certificate. The Department publishes withholding tables.
• Unemployment insurance: the Louisiana Workforce Commission states that the 2026 wage base is $7,000, and rates depend on an employer's reserve-ratio history. New employers receive an assigned rate until they qualify for an experience rate. Employers register for an unemployment tax account online. See state unemployment insurance.
• New hires: federal and state law require reporting newly hired and re-hired employees to the Louisiana Directory of New Hires. See new hire reporting.
• Wage reports: quarterly wage reports in the wrong format or missing Social Security numbers are not acceptable, and penalties for late or incomplete reports start at 5 percent of the amount due or $25, whichever is greater.

Parishes, cities and property tax

Louisiana has parishes instead of counties, and parish and city governments levy sales and property taxes and collect them locally. In New Orleans (Orleans Parish), for example, the Department also administers the Ernest N. Morial New Orleans Exhibition Hall Authority food and beverage tax and a hotel occupancy tax. The Louisiana Stadium and Exposition District has its own hotel occupancy tax. Property tax is assessed by parish assessors and collected locally, not by the state revenue department. Employers with people working in several parishes should treat local licensing and sales tax as a separate checklist, and our guide to local payroll taxes by city and county explains how to check. Neighboring states include Mississippi and Arkansas.

How we can help

We prepare Louisiana resident, part-year and nonresident returns, advise businesses on the repeal of franchise tax and the flat corporate rate, set up payroll and unemployment accounts, and review sales tax across parishes. If you receive a notice from the Department of Revenue, see state tax notices and representation. Contact us to begin; this page is general information.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.