NEW ORLEANS — Louisiana’s House Ways and Means Committee will soon be studying the state’s tax structure with the possibility of eliminating the state’s income tax.
Representative Richard Nelson, a Republican from Mandeville, has asked the committee to make recommendations concerning eliminating individuals and corporate income tax.
What does that mean for you?
The Louisiana Department of Revenue has tax brackets from 1.85% for couples who make under $25,000 a year, up to 4.25% for those who make over $100,000.
Those percentages were recently reduced thanks to constitutional amendments ratified in 2021. If Representative Nelson gets his wish, they could go away entirely. But he’s hoping to see that funding replaced by locally-administered property taxes.
The goal is to allow Louisiana to compete with its close neighbors, Texas and Florida, which don’t tax income.
Texas and Florida do collect higher property taxes and sales and use taxes overall.
Texas imposes a 6.25% state sales tax. Florida has a six percent general state sales tax. Louisiana collects a 4.45% state sales tax.
Those percentages don’t include local sales taxes, which vary by municipality.
This is just beginning the discussion. You can expect lots of meetings and input before a radical change to Louisiana's tax code. But the Ways and Means Committee is the first stop if this idea is destined for legislative session this spring.