Louisiana Business Taxes at a Glance
Louisiana rewrote its tax system in a 2024 special session, with changes taking effect in 2025 and 2026. Individuals now pay a flat income tax. Corporations pay a flat income tax rate, and the corporation franchise tax is gone for periods beginning in 2026. At the same time, Louisiana's sales tax remains split between the state and 64 parishes. BOMCAS helps Louisiana individuals and businesses adjust to the new rules.
Individual Income Tax: Flat 3%
For tax periods beginning on or after January 1, 2025, Louisiana's individual income tax is a flat 3%, replacing the earlier graduated brackets. The standard deduction was increased substantially, and the retirement income exclusion was expanded for older taxpayers. Many taxpayers' Louisiana liability changed even without a change in income.
Louisiana is also a community property state with civil law roots. Married couples who file separately, or who are divorcing, need to divide income under community property rules, which can affect both state and federal returns. We prepare Louisiana returns under the new structure and handle community property allocations.
Corporation Income Tax and Franchise Tax Repeal
For tax periods beginning on or after January 1, 2025, Louisiana corporation income tax is a flat 5.5%, with a corporate standard deduction. The reform also changed some deductions and allowed elective full expensing of qualified property and research expenditures.
The corporation franchise tax is repealed for franchise tax periods beginning on or after January 1, 2026. Corporations still need to file and pay for earlier periods, and prior-year assessments remain collectible. The inventory tax credit also ends for C corporations, with extended carryforwards for unused credits. We prepare corporate returns, close out final franchise tax filings, and track inventory credit carryforwards.
Sales Tax: State and Parish
Louisiana's sales tax has two separate systems. The state tax is administered by the Louisiana Department of Revenue, while local sales taxes are generally collected by each parish's own collector, with its own registration, returns, and audits. The 2024 reform also changed the state rate for a period of years. A business selling in several parishes may file many separate local returns.
Remote sellers can register with the Louisiana Sales and Use Tax Commission for Remote Sellers, which handles local tax for remote sales in one place. We help businesses register with the state and each parish, file returns, and reconcile them to the books.
Business Incentives in Transition
The reform reduced or ended several incentive programs. Annual caps on the motion picture production credit and historic rehabilitation credits were lowered, and programs such as the enterprise zone and quality jobs programs were sunset for new applications after mid-2025, though existing contracts continue. The Industrial Tax Exemption Program, which reduces local property taxes for qualifying manufacturers, remains under its own rules. We help businesses track existing incentives and the records needed to keep them.
Hotels and Short-Term Rentals in New Orleans
Lodging in New Orleans carries several layers of tax: state and local sales tax plus occupancy taxes and fees that are administered by different bodies. Short-term rentals also need city permits and must follow local rules on where they can operate. Hotels, inns, and rental owners need to know which tax goes to which collector. We help them register, file, and reconcile collections to their books.
Remote Sellers and Parish Collectors
Remote sellers without a physical presence in Louisiana file a single return through the Louisiana Sales and Use Tax Commission for Remote Sellers. Businesses with a location in the state still file local tax with each parish collector where they make sales. Knowing which group you belong to, and when that changes, avoids missed parish filings.
Payroll Under the Flat Tax
Louisiana employers withhold state income tax and report unemployment insurance to the Louisiana Workforce Commission. The move to a flat rate changed withholding tables. Our payroll work includes the state filings and a reconciliation to the books each quarter.
Energy, Maritime, Tourism, Film, and Seafood
- Oil, gas, and petrochemicals: severance tax, ITEP property, and equipment-heavy fixed assets
- Maritime and ports: vessels, crew payroll, and multistate apportionment
- Hospitality and tourism in New Orleans: hotel and occupancy taxes, parish sales tax, and tip reporting
- Film and entertainment: production credit documentation under the new caps
- Agriculture and seafood: sugarcane, rice, and seafood, with farm reporting and exemptions
Moving to Louisiana as a Married Couple
Couples moving to Louisiana from a common-law state should know that property acquired after they become Louisiana domiciliaries is generally community property, while property they bring with them is classified under separate rules. That affects how income is divided if spouses file separately and how assets are treated later. We prepare part-year returns in both states and flag community property questions for your attorney.
Books Organized by Parish
Louisiana bookkeeping should track sales by parish for local sales tax, separate prior-period franchise tax accounts until they are closed, and track incentive-related costs. Our bookkeeping is set up so these figures come straight from the ledger at filing time.
Contact BOMCAS About Louisiana
Corporations closing out final franchise tax periods, businesses filing in several parishes, and individuals adjusting to the flat 3% tax can contact BOMCAS for a remote review. We plan to add Louisiana city pages, each with its own services, under this section. See the BOMCAS home page and our United States services for more. This page is general information about the reformed system and is not advice for your situation.
Talk to BOMCAS About Your Louisiana Taxes
Have a question about your Louisiana filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.