GNO, Inc. Sunday Night Highlight – Louisiana #4 Most Improved Tax Ranking in USA
Louisiana has recorded the #4 largest improvement in the USA in tax climate ranking since 2020, per the Tax Foundation’s 2026 State Business Tax Climate Index.
The Tax Foundation praised Louisiana’s new simplified structure as “among the most comprehensive in the country,” driving a six-place improvement from 37th to 31st overall.
Major changes that took effect in 2025 include:
- A flat 3% individual income tax rate, replacing multiple brackets
- A flat 5.5% corporate income tax rate
- A higher standard deduction of $12,500
- Permanent full expensing for business investments, allowing companies to deduct the full cost of new equipment immediately
Louisiana is one of only three states nationwide, alongside Oklahoma and Mississippi, to make full expensing permanent, a policy that strengthens investment appeal for capital-intensive industries like manufacturing, logistics, and energy.
These reforms propelled Louisiana from 32nd to 15th for individual income tax competitiveness and from 29th to 10th for corporate tax, one of the sharpest improvements in the nation.
From 2020 to 2026, the Top Five States for Tax Climate Improvement were:
- Tennessee
- Iowa
- Georgia
- Louisiana
- Arkansas
Looking ahead, additional changes taking effect on January 1, 2026 – including the repeal of the franchise tax, recognition of S-corporation status, and potential inventory tax repeal (pending voter approval) – are expected to further elevate the state’s ranking in next year’s report.
You can read more about what the Tax Foundation has to say about Louisiana’s path towards better tax policy here.