Louisiana State and Local Taxes Higher Than Most in the Southeast

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BATON ROUGE (The Center Square) – A new report on combined state and local taxes puts Louisiana in the lower end nationally, but residents still pay a higher tab than other states in the Southeast.

The nonpartisan Tax Foundation, in its survey of state and local taxes, says the state is ranked 36th in its per capita combined state and local tax collections in fiscal 2021. Louisiana residents paid an average of $4,822 per person.

While that compares favorably from a national perspective, it trails neighboring Mississippi (46th, $4,435 per capita collections), Georgia (43rd, $4,590), Florida (47th, $4,405), Tennessee (48th, $4272) and Alabama (49th, $4,245). 

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Alabama just started the phaseout of its 4% grocery tax with an initial reduction to 3%, while Mississippi passed a tax cut package in 2022 that reduces the state’s graduated income tax to a flat 4% rate.

Louisiana is better than neighboring Arkansas (35th, $4,868 per capita collections) and Texas (34th, $4,888), which doesn’t have a state income tax. 

Louisiana has a graduated individual income tax, with rates that range from 1.85% to 4.25%. The state also levies a 4.45% sales tax, with local sales taxes capped at 7%, giving the state, according to the Tax Foundation, a combined average sales tax rate of 9.55%. 

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The District of Columbia had the highest per-capita state and local tax collections at $13,278, followed by New York ($10,266), California ($9,175), New Jersey ($8,303), and Massachusetts ($8,101).

The lowest states were Alaska ($4,192 per capita state and local tax collections), followed by Alabama, Tennessee, Florida and Mississippi. 

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