Tax Foundation says Louisiana residents pay about 10% sales taxes, most in United States
Louisianans are paying a bigger percentage of sales tax than anyone else in the United States at nearly 10%, which critics describe as regressive because sales taxes take a larger percentage of income from low-income taxpayers than from high-income earners.
The 2023 Tax Foundation rankings list Louisiana at No. 1 in combined state and local sales taxes at 9.55%, five times higher than Alaska at 1.76%, the state with the lowest sales tax.
Beginning this spring and during the next two years lawmakers will debate whether to reduce a portion of a temporary .45-cent state sales tax before it expires in 2025 or extend a portion or all of it.
Republican Prairieville Rep. Tony Bacala's House Bill 62 would wean the state off of the temporary sales tax by reducing it to .25% during its final year in 2024.
"It would ease us into the elimination and soften the blow," Bacala said. "We ought to be looking ahead."
The problem? Louisiana's temporary sales tax generates $460 million per year, according to the Legislative Fiscal Office, money that pays for vital state services.
While Louisiana's state sales tax rate is 4.45%, the local sales tax average rate of 5.10% puts the state at the top of the nation with No. 2 Tennessee at 9.548%, but Tennessee doesn't have a state income tax.
Shreveport Rep. Sam Jenkins, chair of the House Democratic Caucus, has mixed feelings about the temporary tax.
"On one hand, sales taxes are regressive, on the other hand, the temporary sales tax has helped us to pay for critical services for people who need them most," Jenkins said. "My intention is to find a less regressive way to replace this revenue by eliminating credits or exemptions.
"My intention is to find a replacement for the revenue so the tax can roll off, but that won't happen until next year," he said.
Republican Winnfield Rep. Jack McFarland, chairman of the House Conservative Caucus, said he'd support Bacala's bill.
"It makes sense to tighten our belts now," McFarland said.
A similar bill from Bacala won House approval last year but was killed in a Senate committee.
"The time to do it was last year," Bacala said. "But whatever we can to prepare now will compel us to build a sustainable budget without the ($460 million)."
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Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1.
This article originally appeared on Lafayette Daily Advertiser: If you live in Louisiana, you're paying more sales tax than anywhere else
