State-by-State Guide to Taxes on Retirees
Tool | December 2020

Louisiana State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Louisiana

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The Bottom Line
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Tax-Friendly

The Pelican State offers a bayou full of tax breaks to retirees. Social Security benefits aren't taxed. Military, federal government, and state and local government pensions are exempt from state income taxes, too. Plus, up to $6,000 per person of private pension and annuity income are exempt from income taxes. And what income still gets taxed faces fairly low rates.

Property taxes are near the bottom for the U.S. But shoppers in Louisiana face the country's highest combined state and local sales tax on everything they buy, potentially including groceries, which are taxable in some localities.

Income Tax Range

Low: 2% (on $12,500 or less of taxable income for individuals, $25,000 for joint filers)

High: 6% (on more than $50,000 of taxable income; $100,000 for joint filers)

On October 9, 2021, Louisiana voters will decide whether to cap the maximum rate at 4.75% starting in 2022. If that ballot initiative is approved, Louisiana's lowest personal income tax rate will be 1.85% and it's highest rate will be 4.75% beginning in 2022. In addition, each personal income tax rate will be reduced beginning February 1, 2024, and each February 1 thereafter through 2034, if the prior fiscal year's actual individual income tax collections exceed the actual tax collections for the fiscal year ending June 30, 2019, adjusted annually by the growth factor provided for in the state constitution.

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Income from federal government, designated Louisiana state and local government, and military retirement plans is fully exempt.

Railroad Retirement benefits are also exempt.

In addition, taxpayers 65 and older can exclude up to $6,000 of other federally-taxable retirement income, including payments from private pensions, annuities and IRAs (up to $12,000 for joint filers).

Sales Tax

4.45% state levy. Localities can add as much as 7%, and the average combined rate is 9.55%, according to the Tax Foundation.

Groceries: Exempt from state tax, but local taxes may apply
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt from state tax, but local taxes may apply

Real Property Taxes

In Louisiana, the median property tax rate is $534 per $100,000 of assessed home value.

Homeowners who are 65 or older with adjusted gross income of less than $100,000 can benefit from freezing the assessed value of their homestead. This benefit is lost if improvements in excess of 25% of the home's value are added.

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

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