(iStock) Louisiana businesses will get additional relief from the corporation franchise tax beginning Jan. 1, reports the Tax Foundation.
As a result of the tax reform package enacted in 2021, the state's corporation franchise tax rate will decrease from 0.3% to 0.275%.
This means that the fees Louisiana-registered companies pay each year will drop from $3 for every $1,000 in capital to $2.75.
Lawmakers had made temporary changes to the corporation franchise tax in response to the pandemic, exempting the first $300,000 of taxable capital for businesses. That change becomes permanent in the new year as part of the 2021 package.
The authors say these changes improve the state's tax code, making it more competitive for businesses.
The Tax Foundation has consistently ranked Louisiana's tax structure near the bottom for competitiveness. However, making the 0.275% corporation franchise tax rate permanent helped improve Louisiana's ranking from No. 42 to No. 39 in the nonprofit's 2023 State Business Tax Climate Index, lifting it out of the bottom 10. Read the full report.