Eliminate Louisiana’s income tax? Not so fast

Gov. Jeff Landry has been vocal about his desire to eliminate the state income tax since he took office in January 2024, but key legislators say elimination is still out of reach, Louisiana Illuminator reports.

“We won’t do it at all this year,” Senate President Cameron Henry, R-Metairie, said when asked about the likelihood of repealing the state income tax this session.

While Henry didn’t rule out considering a full repeal next year, he said a modest income tax rate reduction is more likely this year.

Lawmakers are working to prevent a projected budget shortfall next year, and one-half of a percentage point reduction in the income tax rate costs the state roughly $500 million annually.

The state faces an estimated deficit of $329 million by July 2027, legislative staffers said Tuesday. That deficit is expected to balloon to over $900 million by 2030.

Louisiana eliminated its tiered income tax brackets two years ago and replaced them in 2025 with a flat 3% rate for individuals and a flat 5.5% rate for businesses.

Louisiana Illuminator has the full story.