(The Center Square) − A new report from the Public Affairs Research Council of Louisiana says the state’s big tax changes, passed in late 2024, will leave most households paying less in state taxes — but some of the poorest may end up paying more.

The study, prepared by economist Greg Albrecht, looked at how the new system affects different income groups. It found that income tax cuts generally outweigh sales tax hikes, but the balance depends on how much people earn and spend.

For income taxes, Louisiana now has a single 3% tax rate and a much larger standard deduction ($12,500 for singles, $25,000 for couples). At the same time, smaller deductions were eliminated. Overall, nearly everyone will owe less in income tax.

“With regard to the changes in the personal income tax, the average filer in each income cohort experiences a material reduction in tax liability,” the report says. “Percentage reductions are larger for lower income filers than for higher income filers due largely to the increase in the standard deduction, which effectively eliminates taxation of much of the income of these filers, even with the elimination of the personal and dependent deductions.”

The state rate rose from 4.45% to 5%, and many digital products and services (like streaming subscriptions, e-books, and software) are now taxed. Phone, cable, and streaming services carry an extra 5% tax, making the total state rate 10% on those items.

Families making under $10,000 a year may see their tax bills rise slightly because they don’t owe much income tax but still pay the higher sales taxes, according to the report.

For middle-income households, most will see meaningful savings, in some cases a few hundred dollars a year. Higher income households get the biggest tax cuts in dollar terms, though they also pay more of the increased sales taxes.

The study estimates about 9% of households could see their taxes go up, with another 7% getting only a very small cut.

The report concludes that Louisiana’s tax code overall remains slightly progressive – higher earners pay a bigger share – but the changes make the system a bit less tilted toward lower-income individuals and households than before.

The state changes come on top of sweeping new federal tax cuts signed into law this summer.

The changes to the state taxes have now been complemented by federal tax changes.

The Tax Foundation projects that Louisiana residents will save nearly $3,000 on average in federal taxes starting in 2026 under the One Big Beautiful Bill Act.

The law, championed by President Donald Trump, makes permanent the individual tax changes from the 2017 Tax Cuts and Jobs Act and adds new provisions, including deductions for tipped and overtime income, an expanded child tax credit, and permanent 100% bonus depreciation and research-and-development expensing.

Savings vary widely across Louisiana: residents in Lafourche Parish are projected to save about $4,022 a year, while Madison Parish residents will see the smallest average benefit at $1,505. The national average savings is higher, at about $3,752 in 2026. Over time, the cuts are also expected to help add more than 8,700 jobs in the state.