Louisiana raises its state sales tax rate from 4.45% to 5% from 1 January 2025

What changed in detail

Louisiana Act 11 (House Bill 10) of the 2024 Third Extraordinary Session was signed on 4 December 2024. It raises the Louisiana state sales and use tax rate from 4.45% to 5% from 1 January 2025. The Louisiana Department of Revenue confirmed the new rate in Revenue Information Bulletin 25-007 on 23 December 2024.

The 5% is made up of several levies:

• the R.S. 47:331 levy rises from 0.97% to 1%, and the separate 0.03% levy in R.S. 51:1286 is repealed;
• R.S. 47:321.1 keeps its 0.45% and adds 0.55% from 1 January 2025 through 31 December 2029;
• from 1 January 2030 the R.S. 47:321.1 levy drops to 0.75%, so the total state rate becomes 4.75%.

The RIB notes that under La. R.S. 47:305.11 the additional 0.55% does not apply to certain sales of materials and services under qualifying construction contracts. The new rate applies to tangible personal property, certain services and digital products, whether tax is remitted to the Department or to the Louisiana Sales and Use Tax Commission for Remote Sellers.

Act 11 also added two taxable services, prewritten computer software access and information services. It made telecommunication services subject to the full 5% state rate.

What it means

The 5% rate is in force and is scheduled to fall to 4.75% on 1 January 2030. It applies to the base that Act 10 extended to digital products in the same session.

Two traps arise in practice. First, local parish rates stack on top of the 5%. Second, the construction-contract carve-out keeps qualifying contracts out of the extra 0.55%. Anyone billing materials or services under a construction contract should check R.S. 47:305.11 before charging the full 5%.

The 2030 step-down is written into the Act, so rate tables should carry an end date for the 5% rate.