Five percent: that's where Louisiana's sales tax rate will be once a new law passed by the state legislature last week takes effect.
That will keep Louisiana atop a certain list. According to the Tax Foundation, Louisiana's average combined local and state sales tax rate is 9.56 percent, the highest in the nation. Although that rate will soon increase, Tax Foundation analyst Manesh Bhatt says there's a chance lawmakers could eventually bring down the sales tax rate.
However, that reduction would come with a tradeoff, as lawmakers would tax more personal services to make up for the lost revenue.
"The reality of it is they are sort of the highest," Bhatt said. "If lawmakers are able to broaden the base, it will allow for the rates to be reduced. There is a longterm possibility that rates come down, but there's no question the rates are high right now."
According to Bhatt, cities and parishes may lower their own sales tax rates to drive consumers and businesses to their areas.
"The reality of it is is there is not just interstate competition but there's intrastate competition," Bhatt said. "So you could see parishes compete against one another for sales and for services based on the local sales tax rates."
