During the 2012 fiscal year, 7.6% of all income earned in Louisiana went towards state and local taxes, according to the latest annual “State-Local Tax Burden Rankings” released by the Tax Foundation, which analyzes figures in each state from fiscal year 2012.
Louisiana is ranked No. 45 in the report, meaning just five other states—Texas, Tennessee, Wyoming, South Dakota and Alaska—had a lower tax burden. Louisiana’s ranking is unchanged from last year’s report, but is down two spots from the ranking two year’s ago, which was based on fiscal year 2010 data.
At 7.6%, Louisiana’s state-local tax burden is lower than the 9.9% average across the U.S. Though the state’s ranking is unchanged this year, Louisiana’s burden declined from 7.8% during the previous fiscal year. That followed a trend seen across America, the report says.
“During the 2012 fiscal year, state-local tax burdens as a share of state incomes decreased on average across the U.S. Average income increased at a faster rate than tax collections, driving down state-local tax burdens on average,” the Tax Foundation says.
The states with the highest tax burden in this year’s report are: New York (12.7%), Connecticut (12.6%) and New Jersey (12.2%).
The Tax Foundation, a Washington, D.C.-based think tank, compiles its annual report by analyzing all taxes reported by the Census Bureau’s State and Local Government Finance division, which includes 26 tax categories from property and general sales to individual and corporate income taxes.
The amount of taxes paid to local and state coffers in Louisiana was $1,953 per capita in fiscal year 2012, the report says. The amount of taxes paid by Louisianans to other states during the fiscal year was $997 per capita.
“It’s important to remember that a significant amount of taxation occurs across state lines, and that this shifting is not uniform,” the report says. “For instance, one might pay sales taxes at their local corner store, but also pay sales taxes when on vacation in another state. This shifting should not be ignored when attempting to understand the burden faced by taxpayers within a state.”
The report shows Louisiana’s state-local tax burden has remained relatively stable for decades. In 1977, the state’s burden was 7.9%. It peaked at 8.8% in fiscal year 2008.
—Steve Sanoski
