Bill > HB645

This bill modifies Louisiana's state income tax rates and standard deduction amounts in a phased approach over several years. Currently, the state income tax rate is set at 3%, but the bill gradually reduces this rate to 1.75% by 2028, with intermediate rates of 2% in 2027. Simultaneously, the bill substantially increases the standard deduction for taxpayers. For tax years 2025 and 2026, the standard deduction for single and married-separate filers will be $12,500, increasing to $25,000 in 2027, and then to $50,000 in 2028. Married joint return, qualified surviving spouse, and head of household filers will continue to receive a standard deduction that is 200% of the single individual amount. Starting in 2029, the standard deduction will be annually adjusted based on the Consumer Price Index for urban consumers (CPI-U), which measures inflation. These changes are designed to provide tax relief for Louisiana residents by lowering income tax rates and increasing the amount of income that is not subject to taxation. The bill will become effective on January 1, 2026, and will apply to all taxable periods beginning on or after that date.