How Louisiana's New Tax Reforms Are Changing The Economy

Louisiana’s reputation as a bottom-ranked state in national economic measures may finally be changing. State Revenue Secretary Richard Nelson told KEEL News on Wednesday that the transformation is real and measurable, crediting broad policy changes that have restructured how Louisiana taxes, educates, and attracts business.

New policies reshape business climate and boost optimism statewide

Nelson noted that, for years, Louisiana was known for its complicated tax code and stagnant growth. But that changed in 2024, when the state enacted one of the most comprehensive tax reform packages in the nation.

The overhaul simplified the system, reduced rates, and removed outdated burdens that had discouraged investment for decades.

Louisiana adopts flat 3% income tax

Under the new structure, Louisiana now has the second-lowest income tax rate in the country, a flat 3% for all taxpayers. Corporate tax rates were also lowered to align with southern averages, and the long-criticized corporate franchise tax, a levy that acted like a business wealth tax, was eliminated after nearly ninety years.

“These changes have made Louisiana one of the most competitive states in the South,” Nelson said. “Billions of dollars are already flowing in from new investments.”

Louisiana Economic development spreads statewide

Nelson cited $70 billion in new projects announced within months of the reform, including a multi-billion-dollar data center in Northeast Louisiana and the Hyundai manufacturing expansion in Ascension Parish.

Smaller parishes are expected to benefit next if voters approve a constitutional amendment on April 18, which would allow local governments to opt out of the costly inventory tax, a move Nelson says could bring more manufacturers to rural areas.

Education and efficiency driving change

Beyond tax policy, Nelson pointed to improved literacy rankings, now 16th in the nation, and new technology within the Department of Revenue that makes filing and paying taxes simpler than ever. “You shouldn’t have to make ten clicks just to pay your bill,” he said, adding that new online systems now allow taxpayers to scan QR codes to make payments or set up plans directly.

A confident outlook for Louisiana

Nelson believes the next five years could bring the most sustained period of growth Louisiana has seen in generations. “Policy works,” he said. “If you can get it right, you change people’s lives.”