Louisiana LLC Taxes Explained: Flat 3%, No Franchise Tax (2026)
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates.
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates. Federal self-employment tax depends on classification, earnings, owner status, wages and annual Social Security limits. Not every distribution is subject to a flat 15.3%. An S election requires eligibility, reasonable compensation and a comparison of payroll and compliance costs; no universal profit threshold establishes savings.
- State income tax
- 3% flat
- Standard deduction
- Use applicable return-year instructions
- Franchise tax
- Repealed (2026)
- Corporate rate (if elected)
- 5.5% flat
- Sales tax
- 5% state + parish
- S-Corp threshold
- Case-specific; no universal threshold
The 5 Layers of Louisiana LLC Taxation
Federal: income + self-employment tax
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates. Federal self-employment tax depends on classification, earnings, owner status, wages and annual Social Security limits. Not every distribution is subject to a flat 15.3%. An S election requires eligibility, reasonable compensation and a comparison of payroll and compliance costs; no universal profit threshold establishes savings.
Louisiana income tax: flat 3%
Effective for periods beginning on or after January 1, 2025 (HB 10, 2024 Special Session), with a $12,500 standard deduction ($25,000 MFJ) — replacing graduated brackets that topped out at 4.25%.
Entity level: nothing (for default LLCs)
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates.
Parish: occupational license taxes
Annual local taxes on gross receipts in most parishes and cities — covered in Step 7.
Sales tax: 5% state + parish local
Collected from customers on taxable sales; combined rates around 10% — the nation's highest average — with local remittance to parish collectors.
Review Applicable Tax Requirements
Louisiana tax planning references
Use the actual return instructions to calculate liability.
Louisiana individual tax is 3% from 2025. Use applicable deductions and adjustments. Federal self-employment tax depends on classification, earnings, owner status, wages and annual Social Security limits. Not every distribution is subject to a flat 15.3%. An S election requires eligibility, reasonable compensation and a comparison of payroll and compliance costs; no universal profit threshold establishes savings.
What the 2024–2026 Reform Changed
| Item | Before | Now (2026) |
|---|---|---|
| Individual income tax | Graduated, 1.85%–4.25% | Flat 3% + $12,500/$25,000 deduction |
| Corporation franchise tax | Owed by corporate-taxed entities | Repealed (periods from Jan 1, 2026) |
| Corporate income tax (if you elect C-Corp) | Graduated to 7.5% | Flat 5.5% |
| State sales tax | 4.45% | 5% (through 2029) |
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates.
S-Corporation Eligibility and Costs
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates. Federal self-employment tax depends on classification, earnings, owner status, wages and annual Social Security limits. Not every distribution is subject to a flat 15.3%. An S election requires eligibility, reasonable compensation and a comparison of payroll and compliance costs; no universal profit threshold establishes savings.
Your Louisiana Tax Calendar
| Date | What's Due |
|---|---|
| Jan 15 / Apr 15 / Jun 15 / Sep 15 | Quarterly estimated taxes — federal and Louisiana, on pass-through profit |
| Mar 15 | Form 1065 (multi-member LLCs) + K-1s |
| May 15 | Louisiana individual return (LA's deadline runs a month after the federal Apr 15) |
| Your anniversary date | $35 annual report — Secretary of State, window opens 30 days early |
| Monthly/Quarterly | Sales tax — state (LDR) and parish returns + occupational renewals per local schedule |
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates.
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PTE election, persistence and owner exclusion
Louisiana’s individual rate is 3% from tax years beginning January 1, 2025. An eligible entity can make the PTE election using current Form R-6980, with approval by members holding more than half the capital-account interests. The election applies to the elected year and subsequent years until terminated under the rules; it is not simply renewed annually. Qualifying taxed income is excluded from the owner’s Louisiana individual income rather than treated as an identical owner credit. Follow composite-return exclusions, including the 2026 S-corporation rule, and applicable estimates.
Louisiana LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. For filing and ongoing compliance, confirm the requirements with the responsible state agency. This is educational information, not legal or tax advice.
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