As Q2 2025 is here, Louisiana is preparing for its upcoming fiscal session, which is set to begin on April 14 and will run through June 12.
Unlike last year’s general session, which occurs during even-numbered years and addresses a wide range of issues, the fiscal session is more narrowly focused. Its primary purpose is to tackle matters directly related to the state’s finances, including budgeting, taxation and appropriations.
These sessions are typically shorter in duration and feature fewer bills, allowing legislators to dedicate their time and efforts to specific economic policies and targeted reforms.
This year’s fiscal session is expected to build on the momentum from the November 2024 special session, which placed a heavy emphasis on tax policy changes. During that session, lawmakers implemented several key measures, including significant reductions in personal and corporate income tax rates to 3% and 5.5%, respectively.
Additionally, the statewide sales tax was increased to 5%, and a decision was made to phase out inventory tax credits, along with other programs such as the Quality Jobs and Enterprise Zone initiatives. These changes represented a substantial shift in Louisiana’s tax landscape, designed to foster a more competitive and efficient system for businesses and residents alike.
As the new fiscal session draws near, ongoing discussions are expected to focus heavily on several core issues, including inventory taxes, the taxation of services and the future structure of various tax credits and incentives. These topics will be crucial as Louisiana continues to seek a balance between fostering economic growth and maintaining fiscal responsibility. Moreover, one of the most anticipated developments of the session will be the announcement of restructuring plans from the Louisiana Department of Economic Development. These updates are expected to provide clarity on how the state plans to allocate economic incentives to both new and existing businesses, particularly those planning expansions. This restructuring initiative underscores the state’s ongoing efforts to attract and retain business investment, which is viewed as critical for Louisiana’s economic future.
In addition to tax and economic development matters, another major topic on the horizon for the fiscal session is the rapidly growing CCUS sector. This emerging field holds significant potential for both Louisiana’s economy and its environmental strategy. Throughout 2024, CCUS projects became a focal point of debate, with attention paid to issues such as emergency response procedures, local ordinances and the fees or taxes associated with CO2 storage. As many CCUS projects are now in the final stages of obtaining operating permits, the revenue potential from these initiatives has become a central area of focus for legislators and stakeholders.
State and local officials, in collaboration with industry leaders, are actively discussing the appropriate pricing structure for CO2 storage fees. The goal is to create a framework that strikes a balance between maintaining the financial viability of CCUS projects while ensuring that local and state governments receive sufficient tax revenue. As these discussions intensify during the fiscal session, there will likely be a concerted effort to develop a fair and sustainable approach that supports Louisiana’s position as a leader in the CCUS sector while addressing potential concerns from local communities.
With such pivotal issues on the agenda — ranging from tax reform and economic development to the regulation of CCUS — the upcoming fiscal session promises to be a critical one for Louisiana. The decisions made in this session will have lasting implications for the state’s economic future, its fiscal health and environmental policies. As lawmakers prepare to engage with these complex challenges, all eyes will be on Louisiana to see how it navigates these critical issues and shapes the trajectory of the state for years to come.
For more information, visit lca.org or email info@lca.org.
