LA Among Country’s Lowest State Income Tax Rate
A new report shows that Louisiana is among the states with the country’s lowest state income tax rates. ABC 31 News’ Joel Massey has more from a local tax attorney on why that is the case.
Tax Attorney Ted Vicknair said, “The voters approved a provision to reduce the income tax rates from 2, 4, and 6 percent brackets to 1.85, 3 and a half percent and 4.25 percent so the brackets were lowered.”
Now that tax reforms passed by lawmakers a few years ago have kicked in, Louisiana now has the 6th lowest state income tax rate in the country according to a new report by the Tax Foundation. Vicknair talks about what that means for the average Louisiana taxpayer.
“Effectively what it did was it broadened the base and reduced the rates so most Louisiana residents will see a decrease in their taxes although it probably won’t be significant.”
Louisiana had some of the highest state income tax rates until recently. Vicknair said the lower tax burden will help with future economic development.
“That was the intent of the tax proposal was to simplify Louisiana’s taxing system to bring more people into the state including retirees just to make it overall more attractive to both retirees and particularly to businesses.”
Vicknair says Louisiana’s low tax rate is a good thing for the state.
“It sets the stage possibly for more tax reform in the future. I wouldn’t necessarily categorize it as a wholesale revision or major reduction taxes but it is a good step toward simplification of Louisiana’s tax system.”
Despite the now lower tax rates, Louisiana is still on track to collect about 40-percent of its annual revenue from income taxes and other declaration and withholding taxes. Legislative efforts are expected this spring to end state income tax altogether.