Complete Guide to Louisiana LLC Taxes in 2025
Louisiana offers a distinctive tax landscape for LLC owners, featuring newly reformed graduated income tax rates from 1.85% to 4.25%, a $35 annual report fee, and a franchise tax that is currently being phased out under recent legislative reforms. Louisiana's unique civil law system (the only US state based on French civil law) also creates some differences in how LLCs are structured and regulated. This comprehensive guide covers everything Louisiana LLC owners need to know about their state tax obligations.
How Louisiana Taxes LLCs
Louisiana follows federal classification, treating LLCs as pass-through entities by default. Members report on Louisiana Form IT-540 (Individual Income Tax Return). Louisiana does not impose an entity-level income tax on pass-through LLCs, though the franchise tax historically applied to LLCs with larger asset bases.
Key Point: Louisiana enacted major tax reform effective 2024-2025 that reduced the top individual income tax rate from 6% to 4.25% and consolidated brackets from 3 to 3 new lower brackets. The franchise tax is also being phased out, with complete elimination expected by 2026. These changes make Louisiana significantly more competitive for LLC owners.
Louisiana Income Tax Brackets (2024/2025 Reformed)
| Taxable Income (Single) | Rate |
|---|---|
| $0 - $12,500 | 1.85% |
| $12,501 - $50,000 | 3.50% |
| Over $50,000 | 4.25% |
For married filing jointly, thresholds double ($25,000 and $100,000).
Louisiana Franchise Tax Phase-Out
Louisiana's franchise tax, which historically imposed $1.50 per $1,000 of taxable capital (up to $3 per $1,000), is being phased out. The initial $300,000 of taxable capital is exempt, and the tax is scheduled for complete elimination by 2026. For most smaller LLCs, the franchise tax has already been effectively eliminated through the increased exemption.
Federal Taxes for Louisiana LLC Owners
- Self-Employment Tax: 15.3% on 92.35% of net earnings
- Federal Income Tax: 10-37% graduated brackets
- QBI Deduction: Up to 20% under Section 199A
Tax Tip: Louisiana's new top rate of 4.25% is significantly lower than the former 6% rate. This changes the S-Corp election calculus -- the breakeven point is now higher. Run the numbers with our S-Corp Tax Calculator to see if the election still benefits you.
Louisiana LLC Filing Deadlines
| Filing | Deadline | Extension |
|---|---|---|
| Individual (IT-540) | May 15 | Yes, to November 15 |
| Partnership (IT-565) | May 15 | Yes, to November 15 |
| Annual Report | Anniversary date | No |
| Estimated Tax | Apr 15, Jun 15, Sep 15, Jan 15 | No |
Louisiana vs. Neighboring States
| State | Income Tax | Annual Fee | Entity Tax |
|---|---|---|---|
| Louisiana | 1.85-4.25% | $35 | Franchise (phasing out) |
| Texas | 0% | $0 | Franchise 0.375-0.75% |
| Mississippi | 0-5% | $25 | Franchise tax |
| Arkansas | 2-4.4% | $150 | None |
| Alabama | 2-5% | $100+ | Business privilege |
Common Louisiana LLC Tax Mistakes
- Using old tax rates: Louisiana's 2024 reform dramatically changed rates. Use 1.85-4.25%, not the old 2-6% brackets.
- Paying franchise tax unnecessarily: Most smaller LLCs are exempt under the $300,000 capital exemption.
- Missing Louisiana's May 15 deadline: Louisiana uses May 15, not April 15, for individual returns.
- Not evaluating the PTET election: Louisiana offers a pass-through entity tax election for SALT cap workaround purposes.
- Overlooking local taxes: Louisiana parishes may impose additional local taxes on certain business activities.
Dissolving a Louisiana LLC
File Articles of Dissolution with the Louisiana Secretary of State ($100). File final tax returns, pay any franchise tax due, and file a final annual report. Louisiana's statute of limitations is three years from the filing date or the due date, whichever is later.