If it seems like you’re forking over a lot of money in sales taxes, you’re right. In fact, the Tax Foundation says Louisiana has the highest average combined state and local sales tax rate in the country at just over 10%. Policy Analyst Janelle Fritts says it’s a reputation that Louisiana has had to deal with for many years.
“Louisiana has been in this not quite enviable spot the last couple of years. And even before it gained that top spot around 2022, it was always very, very close with Tennessee,” Fritts said.
Fritts says while Tennessee’s combined state and local taxes are the second highest at just over 9.5%, Tennessee has a huge difference compared to Louisiana.
“Even though it does have a very high sales tax, just like Louisiana, Tennessee does not have an income tax. So the sales tax is how Tennessee makes up a lot of that loss revenue, whereas, Louisiana has all the major taxes,” Fritts explained.
While Louisiana did raise its state sales tax rate to 5% a little more than a year ago, it did reduce income taxes across the board to a flat 3% and cut other taxes as well. Fritts says that has allowed Louisiana to improve its ranking in overall tax burden.
“This year, since those reforms in 2024 going into 2025, the state is now at 31st. Which again, not the top half, but way better than it used to be,” Fritts noted.