Louisiana New Laws That Go Into Effect On Jan. 1, 2025 – Here’s What You Need To Know

I hate to be the bearer of bad news, but taxes in Louisiana are going up in 2025. According to the American Press, more than 30 new laws will take effect on January 1, 2025, and some pertain to tax increases. These new laws will impact residents across the state from unemployment benefits and expanded THC product regulations to homeowners insurance and termination policies.

A lot is changing and residents must understand how this new law will affect their day-to-day. Below we listed a few of the laws going into effect on January 1 in more detail concerning taxes, unemployment benefits, voter registration requirements, and more.

WDSU News did a recent update of what residents should be prepared for as 2024 winds down:

Sales and Income Tax Changes

House Bill 10 (November Special Legislative Session): Louisiana will implement notable changes in its tax system. The state sales tax will increase by 0.55%, raising the state rate to 5%. Combined with local taxes, many areas will see sales tax rates exceeding 10%. For example:

Tax Savings for Louisiana Residents

Louisiana residents will see varying tax savings based on their individual incomes, according to an analysis by RESET Louisiana.

Individuals earning $30,000 to $40,000 annually could save around $330, depending on other credits and dependents. Those making $70,000 to $80,000 could save about $550. Residents earning over $140,000 could see savings of $1,000 or more.
Despite these changes, Jan Moller noted that the spending habits of individuals previously taxed at rates between 3.5% and 4.5% are unlikely to shift significantly, even with the new flat tax structure.

Proposed Taxation Adjustments

Governor Landry proposed increasing taxes on goods and services like car washes, dog grooming, and home repairs—targeting higher-income earners—instead of raising the state sales tax by 0.55%. However, legislators rejected this idea.

Local Tax Rates

The parish local uniform tax rate, as reported by the Calcasieu Parish School Board Sales and Use Tax website, is 5.75%. Combined with the 5% state tax, this brings the total tax on a $100 purchase to $10.75.

For unincorporated areas like Moss Bluff and Gillis (Ward 1) - the local tax rate is lower at 4.25%. Essential items like food for home consumption and prescription drugs are taxed at 3.25%. In economic development districts, local taxes can go as high as 7.75%.

Corporate Tax Reforms In 2025

Beginning January 1, 2025, House Bill 2 establishes a flat 5.5% corporate income tax rate, replacing the current tiered structure of 3.5% to 7.5%. Businesses will also benefit from a $20,000 standard deduction.

The law allows taxpayers to elect immediate expensing with 100% bonus depreciation for most business assets, as well as for research and experimental expenses under Section 174. These accelerated deductions apply to assets placed in service and eligible research expenses incurred in tax years starting on or after January 1, 2025.

Addressing Out-Migration

A key goal of the tax reform was to curb out-migration from Louisiana, according to Moller. However, he expressed skepticism about its effectiveness. “People come to and leave Louisiana for many reasons,” he said, citing factors like wages, school quality, safety, vulnerability to disasters, and the cost of insurance as critical influences

Despite the sales tax hike, income tax rates will decrease. A flat income tax rate of 3% will replace the current tiered system, which tops out at 4.25%. Additionally, the standard deduction will nearly triple to $12,500, providing relief for many taxpayers.

Ten Commandments in Classrooms

House Bill 71 (Spring Regular Legislative Session): Spearheaded by state Rep. Dodie Horton, R-Haughton, and signed into law by Republican Governor Jeff Landry, this controversial measure mandates the display of the Ten Commandments in all public school and university classrooms.

However, the law’s implementation is currently on hold. A federal judge ruled it unconstitutional, citing a violation of the separation of church and state. Despite the ruling, Attorney General Liz Murrill is defending the law in court, keeping its future uncertain.

Reducing Louisiana Unemployment Benefits

House Bill 119 (Spring Regular Legislative Session): Authored by state Rep. Troy Romero, R-Jennings, this law reduces the maximum duration for state unemployment benefits from 26 weeks to 20 weeks. Louisiana already has one of the lowest average unemployment payouts in the country, at $250 per week, second only to Mississippi.

These changes reflect a broader push to reform public policies in Louisiana, though their impacts on individuals and communities remain debated. Residents should prepare for the financial adjustments these new laws will bring in the coming year.

Voter Registration Citizenship Proof

Senate Bill 436 (Spring Regular Legislative Session): Proposed by state Sen. "Big Mike" Fesci, R-Houma, this new law requires individuals to provide proof of U.S. citizenship when registering to vote.

Previously, Louisiana adults only needed to verify their identity, age, and residency and affirm their citizenship by signing a declaration. While it is already illegal for non-citizens to vote in Louisiana, this measure aims to strengthen election integrity by adding a documentation requirement.

For a rundown on all the new laws going into effect in January NOLA.com has a complete list of each law with an explanation of how they will impact Louisianians.