Special Session Ends With Tax Relief for Small Businesses

November 22, 2024

Louisiana News

Legislation reduces tax burdens and protects vital incentives

NFIB State Director Leah Long today thanked Gov. Jeff Landry and legislative leaders for passing tax reforms that provide critical support to small businesses across Louisiana.

“By reducing tax burdens and protecting vital incentives, this landmark legislation ensures small businesses can continue driving economic growth and creating jobs,” Long said.

The comprehensive tax reform package includes:

A flat 3% individual income tax rate, providing significant relief to small business owners filing through personal income tax returns.
A flat 5.5% corporate income tax rate, simplifying the tax code and making Louisiana more competitive for business investment.
A 5% sales tax rate for the next five years, effective Jan. 1, temporarily offsetting revenue loss from income tax reductions while ensuring long-term stability when the rate reverts to 4.75%.
Elimination of the Franchise Tax, removing a major barrier to business formation and growth.

Importantly, the reforms retain key provisions that directly support small businesses:

The inventory tax credit, preserved for unincorporated businesses and pass-through entities, helping maintain cash flow and operational efficiency.
Vendor compensation, which remains intact for businesses that collect and remit sales taxes on time, capped at $750 per month.

“Small business owners are especially grateful that legislative leaders listened to their concerns and chose not to expand the sales tax on services,” Long said. “This ensures that small businesses in every corner of the state will be protected against additional financial or administrative burdens.

“These reforms strike the right balance by providing much-needed tax relief while helping small businesses succeed,” she said. “By lowering income taxes and eliminating unnecessary barriers, the Legislature sent a clear message that small businesses matter.”

Topics:

Taxes

State:

Louisiana

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