Louisiana Legislature Approves Tax Reform Package

The Louisiana legislature has recently passed a tax reform package that includes significant cuts to personal and corporate income taxes while simultaneously increasing the state sales tax to 5%. This measure, part of Governor Jeff Landry's effort to make the state more business-friendly, is projected to reduce annual revenue by $1.3 billion, with the sales tax hike intended to offset this loss. The new individual income tax rate will be a flat 3%, and the corporate tax will drop to 5.5%, alongside the repeal of the corporate franchise tax, which was seen as penalizing businesses. Critics argue that this reform benefits wealthier taxpayers and corporations at the expense of lower-income households, as Louisiana already has the highest combined sales tax rate in the U.S. Additionally, the package includes a temporary increase in sales tax, with plans for future adjustments, and seeks to enhance the state's appeal to businesses despite concerns over potential budget shortfalls. The legislation will require voter approval in March to finalize these changes.