(The Center Square) − Louisiana has the highest average combined state and local sales tax rate in the nation, at 10.11%, according to the Tax Foundation’s latest state-by-state roundup for 2026.
The ranking reflects Louisiana’s unusually high mix of state and local levies. The state rate is 5%, and local governments add an average of a little more than five points on top of that.
The 5% state rate traces back to a 2024 special session where state lawmakers rewired the tax code to offset major income tax cuts. Louisiana lifted the state sales tax from 4.45% to 5% effective Jan. 1, 2025, with the higher rate scheduled to run through Dec. 31, 2029 before dropping to 4.75% starting Jan. 1, 2030.
The state sales tax was decided in a late-stage, closed-door negotiation in which lawmakers paired a politically popular income tax cut with a steeper sales tax increase to assemble the votes needed to pass the overall deal.
A central flashpoint was whether Louisiana would broaden its sales tax base to include services like parking, repairs, printing and copying, laundry and cleaning, car washes, delivery and transportation services and more. House Bill 9 proposed taxing more than 40 currently untaxed services in order to generate an estimated $500 million in annual revenue, but the measure stalled.
Instead, lawmakers leaned more heavily on the rate increase while advancing other core parts of the overhaul. The final package flattened the individual income tax to 3%, reduced the corporate income tax to 5.5% and set Louisiana on a path to eliminate its corporate franchise tax starting Jan. 1, 2026, among other changes.
For households, state tax officials say the law also nearly tripled the standard deduction beginning in 2025, raising it to $12,500 for single filers and married couples filing separately, with married joint filers set at double that amount.
Recent economic snapshots have been mixed but include some strong figures. A report from the Pelican Institute that cites U.S. Bureau of Economic Analysis data said Louisiana’s personal income rose 6.8% (annualized) in the second quarter of 2025. The state’s inflation-adjusted gross domestic product increased 4.0% in the same quarter, the report said.
