Start a business in Louisiana
A jobbing contractor working three Louisiana parishes files four sales tax returns a month — one to the state and one to each parish, each to a different office, on its own form, to its own deadline, audited by its own people. Louisiana is the last state in the country where local sales tax is collected by the parishes themselves rather than by the state, and getting three of the four right does not fix the fourth. This page is about how that actually works, and about the two recurring taxes Louisiana has just abolished.
Louisiana's combined sales tax rate averages 10.11%, the highest in the United States. That number is usually quoted as the headline, and it is the least interesting thing about it. The state's share is 5% — set at that level from 1 January 2025 through 31 December 2029 — and the other five points or so come from parishes, municipalities, school boards and special districts.
In forty-nine states, however many local authorities take a share, one revenue department collects the lot and sends the money on. In Louisiana the parishes collect their own. You register with the Department of Revenue for the state portion through LaTAP, and then you register again, separately, with the collector in every parish where you have taxable sales.
- Sales tax
- 5% from 1 January 2025 through 31 December 2029 state + About 5.11% on average from parish, municipal, school-board and district levies local · typically 10.11% — the highest average combined rate in the United States
- Local income tax
- None
- State business licence
- Not required statewide
- Workers' comp from
- 1 employee
- Formation approved in
- geauxBIZ files most domestic LLC formations within a few business days.
- First 90 days, all in
- $250–$1,200 · $125 of it to the state
Official portals: geauxBIZ — Louisiana Secretary of State · LaTAP — Louisiana Department of Revenue · Louisiana Municipal Association — Occupational Licence Tax. Figures checked September 2026; the portal always wins.
What 'the parish collects its own' means on a Tuesday
It is easy to read parish collection as an administrative detail. It is not — it means each parish collector is a separate tax authority with its own everything, and the state has no power to sort out a dispute on your behalf. Four things multiply per parish:
A separate registration
Not a line on the state application. A fresh account with that parish's collector — in many parishes the sheriff's office or a parish tax collection agency — with its own forms and its own account number. Registering with the Department of Revenue registers you for the state's 5% and nothing else.
A separate return, on a separate schedule
Each parish sets its own filing frequency and its own due date. They are often the 20th of the month, but "often" is not a rule you can build a process on, and a parish that has put you on quarterly filing will not remind you when it changes its mind.
A separate view of what is taxable
The parish applies its own reading of the base. Something a state auditor waves through can be assessed by a parish, and the two are not obliged to agree with one another. This is the part that surprises people who assume the state ruling settles it.
A separate audit
Parish collectors audit independently, and a clean state audit is no defence in a parish audit. If you sell into four parishes, four different offices can each decide to look at your books.
The practical consequence is that a Louisiana business should decide deliberately which parishes it will sell into, rather than drifting into them. Adding the fourth parish adds a registration, a monthly filing, a deadline and an audit exposure — a real recurring cost in hours, not just a rate change on an invoice. If a job three parishes over is marginal on price, it is worse than marginal once the filing is priced in. The runway calculator is a blunt but honest way to see what those hours are actually costing you.
What's in the base — and what this page won't guess at
The December 2024 special session both raised the state rate and widened the base. If you sell software, digital goods or a subscription service, that widening is aimed squarely at you, and the treatment is recent enough that the internet is full of pages describing the old position with total confidence.
So: check the current treatment of your specific product with the Department of Revenue before you decide you are outside the base. That is not a hedge to fill a paragraph — it is the correct action, and it is a phone call. Getting it wrong in Louisiana is more expensive than elsewhere because a wrong answer replicates across every parish you sell into, and each of them can assess you for it separately.
The occupational licence tax, which is a tax on turnover
There is no general Louisiana state business licence. What is near-universal is local, and it does not behave like a licence fee in other states. The parish charges an occupational licence tax — and, if your premises sit inside a municipality, the municipality charges one too — computed from your gross receipts on the statutory table in Title 47, Chapter 3.
Gross receipts, not profit. A business that turned over $400,000 and lost money still owes it on the $400,000. This is the closest thing Louisiana has to a local income tax, and it is deliberately not one.
- How it is calculated
- From your gross receipts, on the statutory table — not a flat fee, and not a percentage of profit.
- The floor
- Jefferson Parish sets a minimum of about $50 per business location. Other parishes set their own.
- Per location
- Each business location is licensed. Two premises in one parish is two licences.
- Inside a city, twice
- The parish licence and the municipal licence are separate charges, not alternatives.
- Your first year
- Prorated from your commencement receipts, since you have no prior year to compute from.
- East Baton Rouge, specifically
- Requires a new business to hold the licence a month before it opens — so this is a pre-opening task there, not a first-week one.
That East Baton Rouge rule is the one to act on today if you are opening in Baton Rouge. A month is long enough that discovering it during your first week of trading means trading without a licence.
The first employee
Workers' compensation is compulsory in Louisiana from the first employee — full-time, part-time, seasonal or a minor — with no small-employer exemption for ordinary trades. The Louisiana Workforce Commission's Office of Workers' Compensation enforces it and the penalties for going uninsured are substantial. There is no threshold to duck under and no version of the Texas arrangement across the border.
Unemployment insurance registration also goes to the Louisiana Workforce Commission, and here is a gap this page will not paper over: the precise dollar-and-week threshold at which liability attaches could not be confirmed from a primary source when these figures were checked. Treat your first hire as the trigger, register then, and confirm the position with the Commission — being early costs nothing and being late costs penalties.
Two recurring taxes that no longer exist
For all the filing, Louisiana has got materially cheaper to be in, twice, within eighteen months.
The corporation franchise tax is repealed for franchise tax periods beginning on or after 1 January 2026. That was a tax on capital — money owed simply for the entity existing with assets in the state, regardless of profit — and it is gone. And the graduated individual brackets have been replaced by a single flat rate; the Department of Revenue's 2026 withholding tables run at 3.09%, and that flat rate is what pass-through profit from your LLC meets on your personal return.
What remains is small. Filing the articles of organisation on geauxBIZ costs $125 from 1 October 2026, plus a $5 card fee online, and the annual report is $35 on your anniversary date — the formation hub has the comparison. Expect $250–$1200 across the first ninety days, most of it in parish occupational licences and insurance rather than in state fees. The Secretary of State's current expedited-filing fees could not be confirmed from a primary source at the date checked, so ask the Commercial Division rather than budgeting from a figure found elsewhere.
Common questions
Why do I have to register for sales tax more than once in Louisiana?
Because Louisiana is the last state where local sales tax is collected by the parishes rather than the state. Registering with the Department of Revenue through LaTAP covers the 5% state portion only. Every parish where you have taxable sales requires its own registration with its own collector, its own return, its own deadline and its own audits.
How many sales tax returns will I actually file?
One to the state, plus one to each parish you sell into, on each parish's own schedule. A contractor working three parishes files four returns a month. Adding a parish adds a permanent monthly filing obligation, which is worth pricing into any job that takes you across a parish line.
What is the Louisiana occupational licence tax?
A local tax charged by the parish — and separately by the municipality if your premises are inside one — computed from your gross receipts on the statutory table in Title 47, Chapter 3. It is based on turnover rather than profit, so a loss-making year still owes it. Jefferson Parish sets a minimum of about $50 per business location; a new business's first year is prorated from its commencement receipts.
Do I need the occupational licence before I open?
In East Baton Rouge, yes — a new business is required to hold the licence a month before opening. Other parishes differ, so check with the parish and the city before you set an opening date rather than after.
Is the Louisiana franchise tax still payable?
No. The corporation franchise tax is repealed for franchise tax periods beginning on or after 1 January 2026, so an entity is no longer taxed on its capital simply for existing in the state. Louisiana has also replaced its graduated individual brackets with a single flat rate; the 2026 withholding tables run at 3.09%.
When does a Louisiana business need workers' compensation?
From the first employee — full-time, part-time, seasonal or a minor — with no small-employer exemption for ordinary trades. The Office of Workers' Compensation at the Louisiana Workforce Commission enforces it, and penalties for operating uninsured are substantial.
Is software taxable in Louisiana?
The December 2024 special session raised the state rate and widened the base, and the treatment of software, digital goods and subscriptions is recent enough that older guidance online is unreliable. Confirm your specific product with the Department of Revenue before concluding you are outside the base — a wrong answer replicates across every parish you sell into.
Know which parishes you've actually taken on.
Describe your business and Velofound lays out Louisiana's list — the state registration, a line for each parish you sell into, the occupational licence, the anniversary report — beside a website that's live and taking card payments into your own Stripe account. It doesn't file returns and isn't an accountant. Free to start.
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