A Guide to Louisiana State Taxes
If you recently moved to Louisiana or experienced a life change that affects the way you file your taxes, it’s important to review the state’s tax laws and regulations. You may be responsible for paying income, property, or sales tax. While some states still charge an estate tax or inheritance tax, Louisiana passed legislation in 2010 to repeal this tax.
When you know what taxes you owe and when they’re due, you can avoid serious legal consequences for paying taxes late or not at all, such as interest charges and penalty fees.
If you pay the right amount of taxes on time in Louisiana, you’ll also avoid penalties enforced by the government, such as liens on property, seizure of your assets, or garnishment of your wages. When you don’t pay the proper taxes on time, the government can also take action to intercept your tax refund and apply it to your overdue taxes. Review this guide to understand the tax guidelines in Louisiana, so you feel confident you understand how much you owe in taxes and when you need to pay.
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Louisiana Income Tax
In addition to federal income taxes, you also owe state income taxes to Louisiana if you earned income throughout the year. The Louisiana Department of Revenue has three different tax brackets and the bracket you fall into depends on how much income you earned. If you’re single, married but filing taxes separately, or the head of household, you’ll fall into one of the three following tax brackets:
|Taxable Earnings||Tax Rate|
|Your first $12,500||2%|
|The next $37,500||4%|
If you’re married and filing jointly or you’re a qualified surviving spouse, the income threshold for each tax bracket is doubled. Your state income tax return is due on or before May 15 while your federal income return is due on April 15.
You can electronically file for an extension on your state income taxes by May 15. If your extension is granted, you have an additional six months to file your state income tax return.
Louisiana Sales Tax
When you purchase taxable goods or services in Louisiana, the seller includes a sales tax in your transaction total. The sales tax rate in Louisiana is 4.45% and it applies to transactions involving the:
- Sale of tangible personal property.
- Use, distribution, storage, or consumption of tangible personal property.
- Lease or rental of any item.
- Sale of certain services, such as hotel rooms, admissions to facilities, parking privileges, laundry services, storage of goods, and other similar purchased services.
The sales tax rate for the sales of prepaid phone cards, intrastate telecommunications, and prepaid authorization numbers is 3.45% while the tax rate for interstate communications is 2.45%. Transactions involving business utilities are susceptible to a sales tax rate of 2%. Local jurisdictions can choose to increase sales taxes on transactions that occur in the area. Therefore, when you make purchases in certain locations, an additional sales tax may apply.
If you purchase an item for use in Louisiana, you must pay taxes on the transaction, regardless of whether the retailer charged you sales tax. The Louisiana consumer use tax applies to online or out-of-state purchases of tangible personal property or other taxable services.
If an online retailer doesn’t charge you sales tax on the items purchased, you must pay the use tax. The current consumer use tax rate is 8.45% and is split between the state and local governments. When you pay the use tax, 4.45% of the tax goes to the state and 4% goes to local jurisdictions.
Louisiana Property Tax
If you own property in Louisiana, you must pay property taxes to your local municipality or parish. The Department of Revenue is not in charge of property taxes but your property’s value is assessed by the Louisiana Tax Commission. This assessment is a percentage of your home’s fair market value (usually 10% to 15%) and is used to calculate the property taxes you owe.
You must file a property tax return with an assessor in the municipality or parish where your property is located on or before April 1, or less than 45 days after you receive your return form. Each December, your local parish or municipality sends out a tax bill to all property owners. If you owe property taxes, they must be paid by December 31 or you’re responsible for paying interest at a rate of 1% per month until the amount due is paid.
If you live in your property full-time and use it as your primary residence, you may qualify for a homestead exemption on your property taxes. You must file for this exemption with your local assessor’s office once you take ownership of the property. If you qualify for homestead exemption, a maximum of $7,500 of your homestead’s assessed value is exempt from taxes.
Filing Taxes in Louisiana
While you have the option to file your taxes by mail, you may find it easier and more convenient to file your taxes online with the Louisiana Department of Revenue. To qualify to use the online state tax filing system, you must have filed taxes online with the department at least once since 2004 or you must have a valid Louisiana driver’s license or ID card.
Using your Social Security number, you’ll create an online account and provide information on your income and filing status. You can pay your taxes online with a credit card or bank account information. If a tax refund is owed to you and you link your bank account to your online profile, you’ll receive the refund in your account within 60 days. You may also use the site to print the forms you need to file if you prefer to mail them to the department along with your tax payment.
Keep in mind, the taxes you file with the Department of Revenue and your local parish or municipalities are state taxes. You may also owe federal income taxes to the Internal Revenue Service (IRS), which must be paid by April 15. By reviewing the local and state tax regulations for property, sales, and income taxes, you’ll pay the right taxes and file your returns correctly.
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