Louisiana’s recent surge in the Tax Foundation’s state competitiveness index reflects the decisive tax reforms championed by Governor Jeff Landry since he assumed office in 2024. The conservative‑leaned ranking, which many corporate leaders use when deciding where to locate facilities, shows the state jumping 17 spots – from 40th in 2024 to an anticipated 23rd place for 2027.
Key reforms driving the jump
Landry and the Republican‑controlled legislature enacted a sweeping overhaul of the state’s tax code three years ago. The personal and business income tax rates were lowered, and the longstanding corporate franchise tax was permanently eliminated. These changes propelled Louisiana’s corporate tax ranking from 29th to 10th and its individual income tax ranking from 27th to 9th, according to the Tax Foundation’s latest data.
Sales tax increase balances the budget
To offset the reduced revenue from income and business taxes, the Landry administration raised the state sales tax rate from 4.45% to 5%. While this move has resulted in Louisiana posting the nation’s highest average combined state‑and‑local sales tax rate at 10.13%, the Tax Foundation notes that a broader tax base could eventually allow the rate to be lowered. The administration’s attempt in 2024 to expand the sales tax to additional services such as lawn care and hair services was blocked by legislators, who opted for a higher rate instead.
Impact on families and low‑income residents
Critics, including progressive groups like Invest in Louisiana, argue that shifting the tax burden toward sales taxes places a heavier load on low‑income households, who spend a larger share of their earnings on taxable goods. The administration counters that eliminating the corporate franchise tax and lowering income taxes reduces overall tax pressure on families and encourages job growth.
Regional comparison
When measured against neighboring states, Louisiana now outperforms Arkansas (ranked 32nd) and Mississippi (27th) but still trails Texas, which sits at fifth place. The improved ranking is expected to make the state more attractive to companies seeking a business‑friendly environment, potentially spurring new investment and job creation.
Looking ahead
Landry’s team remains focused on maintaining the momentum. By continuing to refine the tax structure and exploring ways to broaden the sales tax base without overburdening consumers, the administration hopes to further improve the state’s competitiveness and deliver tangible benefits to Louisiana families and businesses.
Original reporting: KTBS 3 (Shreveport) — read the source article.
