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House Subcommittee Looks at Eliminating LA Income Tax

House Subcommittee Looks at Eliminating LA Income Tax

February 1, 2023 Last Edit: June 5, 2025

The issue is expected to get more attention when the regular session of the Louisiana Legislature convenes on April 10

House Subcommittee Looks at Eliminating LA Income Tax

This week, a House Ways and Means subcommittee finished its review of Louisiana’s tax structure with an eye toward possibly eliminating the state income tax. Currently, eight states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire doesn’t tax earned wages. Several states, including Mississippi, are considering phasing out their income taxes over the next several years. Last month, NFIB State Director Dawn McVea testified before the subcommittee and said Louisiana’s state budget surplus means taxpayers are overfunding state government. “We know that small business owners know how to spend their money better than the government does,” McVea said. “Even if it is just a quarter of a percent, the tax savings realized by small business owners goes directly back into the economy via higher wages, more jobs, and business expansion. Further, Louisiana’s broken sales tax collection structure continues to leave millions on the table while making it harder for homegrown businesses to operate than their out-of-state and big-box competitors. “The inventory tax remains another example of our broken tax structure,” McVea said. “We continue to ask why small business funds local government by paying inventory taxes that are then reimbursed via the inventory tax credit.” While the subcommittee made no recommendations, the upcoming fiscal session of the Louisiana Legislature will provide an opportunity for legislation to address these issues. “If Louisiana doesn’t become more competitive and reform its tax structure, we will end up dead last in the South,” McVea said. Let us know what you think? Share your stories and comments on tax reform with McVea at dawn.mcvea@NFIB.org.
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