Lawmakers suspended Louisiana’s sales tax holidays in 2018 as part of a budget compromise enacted during a fiscal shortfall. The legislation also reduced, but extended, a temporary state sales tax increase through June 30, 2025.

Lawmakers later restored one of those exemptions before the seven-year suspension ended. Act 288 of the 2023 Regular Session reinstated the Second Amendment Weekend Sales Tax Holiday after it had been suspended since 2018, according to the Louisiana Department of Revenue. The holiday exempts eligible consumer purchases of firearms, ammunition and certain hunting supplies from state sales taxes.

When lawmakers suspended the holidays, general sales tax collections were down slightly from the previous year. According to the August 2018 Net Receipts Report, Louisiana collected $643 million in general sales taxes through the first two months of the fiscal year, down $17 million, or 3%, compared with the same period the previous year.

Louisiana previously offered three annual sales tax holidays: the August annual sales tax holiday, the hurricane preparedness sales tax holiday and the Second Amendment Weekend Sales Tax Holiday. All three were included in the 2018 suspension.

The absence stands in contrast to neighboring states. Texas, Arkansas and Mississippi continue to offer annual back-to-school sales tax holidays that temporarily exempt certain purchases such as clothing and school supplies.

Before the suspension, Louisiana’s annual sales tax holiday allowed shoppers to avoid the state portion of sales taxes on the first $2,500 of most individual consumer purchases during a designated August weekend. Although commonly associated with back-to-school shopping, the exemption applied more broadly to eligible consumer purchases.

After the sales tax holiday suspension ended, lawmakers considered creating a new version of a back-to-school tax break during the 2025 regular session.

House Bill 551, known as the Louisiana Believes in Education Act, would have established an annual sales tax holiday on the first Saturday in August. Unlike the previous broader holiday, the proposal targeted school-related purchases, including school supplies, art supplies, instructional materials, backpacks, clothing, footwear and computers.

The Legislative Fiscal Office estimated the proposal would decrease state and local sales tax collections but said the exact cost could not be determined because the amount of eligible purchases made during the one-day exemption period was unknown.

The measure did not become law.

Louisiana’s tax structure changed during a 2024 special session, a year before the sales tax holiday suspension expired, when lawmakers approved reductions to income-based taxes and increased the state sales tax rate to 5%.

According to the state’s May Net Receipts Report, general sales tax collections reached $4.84 billion through May 2026, compared with $4.18 billion during the same period last year. The $665 million increase represents a 16% year-over-year gain.

At the same time, income-based collections declined. Individual income tax collections totaled $3.45 billion through May 2026, down from $4.34 billion last year, a decrease of $894 million, or 21%. Corporate income and franchise tax collections dropped from $1.22 billion to $607.5 million, a decline of about $610 million, or 50%.

Gov. Jeff Landry, who called the 2024 special session, said at the time the tax changes were aimed at improving Louisiana’s economic competitiveness.

“We wanted to make our state more competitive, so we can attract more jobs and have higher wages,” Landry said after the session. “We ensured citizens are paying less money to government by lowering income taxes, nearly tripling the standard deduction, and fully eliminating income taxes for the working poor.”

Landry also highlighted the elimination of the corporate franchise tax.

“We made Louisiana more competitive by abolishing the corporate franchise tax, sending a resounding message to the world that Louisiana is now open to new businesses, to new industries, and to new opportunities,” Landry said.