Louisiana Lawmakers Conclude Special Session on Tax Reform

By Joe Mapes

Louisiana Farm Bureau Legislative Specialist

In Baton Rouge on November 22, 2024, the Louisiana Legislature wrapped up a special session focused on tax reform, culminating in the approval of a substantial tax package. This legislative action is set to reshape the state’s tax landscape with significant reductions in some areas, increases in others, and the establishment of a permanent stipend for teachers.

However, the implementation of these changes is contingent upon voter approval of a crucial constitutional amendment in the upcoming election.

Key Developments from the Tax Reform Package

The newly approved legislation includes a notable reduction in individual income tax rates, that would lower them to 3%. Conversely, the state sales tax would see an increase from 4.45% to 5% for a duration of five years. Additionally, the corporate franchise tax would be eliminated, amounting to $600 million in tax reductions. Homeowners would benefit from the retention of the homestead exemption within the state constitution ensuring they will not be liable for parish property taxes on the first $75,000 of their home's assessed value. In a significant move for educators, the package would guarantee a permanent salary increase of $2,000 for teachers and $1,000 for other school employees, while also addressing approximately $2 billion in debt within the teachers’ retirement system.

In discussions surrounding agriculture, key leaders , like Commissioner Mike Strain and Governor Jeff Landry, emphasized the necessity of maintaining competitive agricultural practices in the global market. The importance of preserving agricultural use value in property tax assessments was highlighted, as any threats to this could significantly increase costs for farmers, who already operate under the constraints of fluctuating commodity prices. Furthermore, the legislative session saw the consolidation of nine different sections of law related to the definitions of farming into a single, streamlined section, enhancing efficiency and accuracy within agricultural regulations.

Next Steps

The approved tax changes are now set to be placed before voters with a constitutional amendment scheduled for the ballot on March 29, 2025. This amendment aims to modify Article VII of the Louisiana Constitution, with alterations that include lowering the maximum income tax rate, increasing income tax deductions for citizens aged 65 and older, and instituting a limit on government growth, among other revisions. As Louisiana prepares for this pivotal vote, these tax reforms stand to impact both residents and the agricultural community significantly.