Tax reform special legislative session to convene in Louisiana on Nov. 6

(The Center Square) – Gov. Jeff Landry has called the Louisiana Legislature to a special session to tackle tax reform, hoping to modernize the state’s tax system and boost economic growth.

The session will run from Nov. 6 until no later than 6 p.m. on Nov. 25.

“This special session fulfills the promise we made to the people of Louisiana to rebuild our economy and make Louisiana a place where people want to raise a family and create jobs,” Landry said in a news release. “I am eager to enact this new playbook and finally make Louisiana a beacon of hope — inviting families and businesses back home,” Landry added.

“It’s time we move Louisiana forward.” Landry said.

He highlighted priorities like a permanent pay raise for teachers, increased take-home pay for workers, elimination of prescription drug taxes, and tax relief for seniors.

The proposal includes measures like a 3% flat income tax rate, expanded sales tax on digital services, and the elimination of certain local tax exemptions.

The Public Affairs Research Council estimate that higher earners, especially those making $150,000 or more, will receive around 54% of the total tax benefits, while the remaining tax savings will be distributed among lower-income groups.

Though larger dollar cuts favor wealthier residents, lower-income households will experience greater relief proportionally, with some earning under $35,000 seeing tax cuts up to 50%. Meanwhile, wealthier households face notable sales tax increases, paying a higher share of the overall sales tax revenue.

The reform’s shift toward taxing consumption, including digital products and out-of-state spending, is modeled after policies in states like North Carolina, aimed at broadening the tax base while reducing income tax reliance.

Some caution, however, that the rapid pace of this special session may limit debate on such substantial changes. Critics argue these reforms could be better handled in the Legislature’s upcoming fiscal session next year.

The proposals include a comprehensive overhaul of Article VII of the state constitution. The proposed changes would affect areas like prescription drug tax exemptions, local government funding, and severance tax distribution.

A central feature of the proposal is expanding the state’s current prescription drug tax exemption to all local parishes, eliminating the 5-6% tax on medications some parishes currently impose.

“We don’t think people should pay the tax to be sick,” said Department of Revenue Secretary Richard Nelson, explaining that this would align Louisiana with other states that already prohibit such taxes.

Additional reforms include doubling the standard deduction for seniors, raising it to $25,000 for single filers and $50,000 for married couples, along with transferring several funds from the constitution to statutory control, such as the Revenue Stabilization Fund, which would be redirected to the general fund.

The rewrite also proposes that 15% of revenue from corporate, franchise, and severance taxes be directed to a “rainy day” fund for economic downturns.

Teacher pay would also be addressed, with parishes mandated to increase salaries for teachers and support staff, and the state taking on part of the unfunded liability tied to these pay raises.

Other provisions include moving property tax elements, aside from the homestead exemption, into state statutes, providing an optional inventory tax exemption for parishes, and removing the cap on severance tax distributions, allowing parishes to receive more than the current limit of $1.2 million.