Louisiana Franchise Tax Repeal: What Ends in 2026

The Louisiana corporate franchise tax is officially ending. Effective January 1, 2026, the 0.275% franchise tax that corporations have paid annually for decades will be eliminated. This change, enacted through HB 3 of the 2024 special legislative session, represents one of the most significant tax simplifications Louisiana has made for business formation and corporate taxation in recent years. If you operate a corporation in Louisiana, file franchise tax returns, or are considering how Louisiana's tax structure affects your business, this repeal matters to you.

Here's what you need to know: the repeal is real, it is coming, and there are specific deadlines you must meet before it takes effect. Businesses still owe the Louisiana franchise tax for 2025. The final returns are due in spring 2026. After that, the franchise tax disappears entirely. This guide walks you through what the Louisiana franchise tax was, why it is being repealed, how to file your final return, and what this means for your corporate tax obligations going forward.

What Was the Louisiana Franchise Tax?

The Louisiana corporate franchise tax was a flat annual tax on corporations operating in the state. The rate was 0.275% of Louisiana taxable income or $300, whichever was greater. It applied to every domestic (Louisiana-incorporated) and foreign (out-of-state-incorporated) corporation doing business in Louisiana.

The franchise tax was separate from Louisiana's corporate income tax. Even if a corporation had no income, it still owed at least the minimum $300 franchise tax as long as it was registered to do business in the state. This minimum payment applied regardless of revenue, making it a fixed annual cost for being incorporated in Louisiana.

Important: limited liability companies (LLCs) that were taxed as partnerships never owed the Louisiana franchise tax. Only corporations paid it. If your LLC was taxed as a sole proprietorship or partnership, this repeal does not directly change your current filing obligations, though the broader tax environment does shift.

The tax has been part of Louisiana law for a long time. It was a predictable, if modest, annual expense for business owners. Small corporations with minimal income paid the $300 minimum. Larger corporations calculated the tax as 0.275% of their Louisiana taxable income. Either way, the franchise tax return (CIFT form 620) was due as part of the corporate tax filing season.

HB 3 and the Louisiana Franchise Tax Repeal

In 2024, Louisiana's legislature passed HB 3 during a special session, eliminating the corporate franchise tax effective January 1, 2026. The repeal is complete: the tax does not phase out, it does not reduce to a lower rate, and it does not apply to selected industries. It simply ends.

The reason: simplification. States across the country have moved away from franchise taxes in recent decades. They are considered outdated, complex to administer, and a barrier to business formation. By eliminating Louisiana's franchise tax, the state removes a compliance burden and a fixed annual cost that falls on every incorporated business.

This legislative decision positions Louisiana to compete for new business formation and headquarters relocation, especially in a climate where business owners compare state tax codes. Corporations no longer have to budget for a Louisiana-specific tax that serves no purpose after the franchise tax repeal takes effect.

The louisiana franchise tax repeal is not conditional. It does not depend on revenue, economic conditions, or future legislative action. When January 1, 2026 arrives, the 0.275% rate and the $300 minimum no longer apply to Louisiana corporations.

Key Dates and Deadlines

Timing is critical. Here are the dates that matter for the louisiana franchise tax:

• 2025 returns: Corporations still file a Louisiana franchise tax return for tax year 2025. This is the final franchise tax return any Louisiana corporation will file.
• Filing deadline: The 2025 franchise tax return is due by March 15, 2026 (or 60 days after your fiscal year end if different from the calendar year).
• Repeal effective date: January 1, 2026. The franchise tax applies to no tax periods on or after this date.
• No 2026 returns: There is no Louisiana franchise tax return filing for 2026 or any year after. The CIFT form 620 will not be required.

Mark these dates on your tax calendar now. The last chance to file a louisiana franchise tax return is the March 2026 deadline for 2025 returns. Missing this deadline can result in penalties and interest.

2025 Returns: The Final Year

For the 2025 tax year, Louisiana corporations must still file a complete louisiana franchise tax return. The form is the same, the calculation is the same, and the obligations are unchanged. You will calculate 0.275% of your Louisiana taxable income or pay the $300 minimum, report it on the CIFT form 620, and file it on time.

The difference is that this is the last time you will do this. The 2025 louisiana franchise tax return is the final franchise tax return. It is the last time the CIFT 620 form will be required in Louisiana.

If you operate a corporation in Louisiana or manage franchise tax filings for clients, you need to:

• File the 2025 louisiana franchise tax return by March 15, 2026 (or 60 days after your fiscal year-end if not calendar-based).
• Pay any franchise tax due with that return.
• Keep records of this final return for your tax files.
• Plan not to file a franchise tax return in 2027 or beyond.

Payment methods, filing procedures, and the basic calculations remain standard. The Louisiana Department of Revenue processes 2025 franchise tax returns like any other year, except it will be the final batch of franchise tax filings.

Who This Affects (and Who It Doesn't)

The louisiana franchise tax repeal directly affects:

• Domestic corporations: Businesses incorporated in Louisiana and filing Louisiana corporate tax returns.
• Foreign corporations: Out-of-state corporations registered to do business in Louisiana that were required to pay the Louisiana franchise tax.
• Any corporation with Louisiana taxable income: If you were filing a franchise tax return, the repeal eliminates that obligation after 2025.

The louisiana franchise tax repeal does NOT directly affect:

• LLCs taxed as partnerships: These entities never owed the franchise tax and are not impacted by the repeal.
• Sole proprietorships and partnerships: These structures never paid the franchise tax.
• S corporations: While S corps are still corporations for franchise tax purposes (in years prior to 2026), the repeal eliminates the franchise tax entirely after 2025.
• Corporate income tax: The repeal of the franchise tax does not change Louisiana's corporate income tax rate, which is currently 5.5% on corporate taxable income. The franchise tax and income tax are separate obligations.

What Replaces the Franchise Tax?

Nothing replaces the Louisiana franchise tax in the way of a direct equivalent. The franchise tax is simply repealed, not converted to another form of state taxation on corporations.

Louisiana corporations will still pay:

• Corporate income tax: Flat 5.5% on Louisiana taxable income (for tax years beginning on or after January 1, 2025). This is separate from the franchise tax and continues after the franchise tax repeal.
• Sales tax: If applicable to your business, the standard Louisiana state sales tax rate of 5%, plus any local parish or municipal sales taxes.
• Occupational license taxes: Many parishes and municipalities in Louisiana levy their own occupational license taxes on corporations operating within their jurisdiction. These are local, not state-level, and are not affected by the franchise tax repeal.

The key benefit of the louisiana franchise tax repeal is elimination of the $300 minimum annual fee and the 0.275% tax on income. These costs go away entirely. Corporations will no longer file the CIFT form 620. They will continue to file their standard corporate income tax returns, but the franchise tax component vanishes.

How to File Your Final 2025 Franchise Tax Return

If you have not filed a Louisiana franchise tax return before, or need a refresher, here is the basic process for the final 2025 return:

1. Gather your Louisiana taxable income: Start with your federal taxable income and make Louisiana-specific adjustments. The Louisiana Department of Revenue provides instructions on what qualifies as Louisiana taxable income.
2. Calculate the tax: Multiply your Louisiana taxable income by 0.275%. Compare this amount to the $300 minimum. Pay whichever is greater.
3. Complete Form CIFT 620: This is the Louisiana corporate franchise tax return form. Fill it out with your business information, income, and calculated tax.
4. File and pay: File the return with the Louisiana Department of Revenue by March 15, 2026 (or 60 days after your fiscal year-end). Pay any franchise tax owed at the time of filing.
5. Keep records: Retain a copy of your 2025 franchise tax return and payment proof for your files.

File electronically through the Louisiana Department of Revenue website at https://revenue.louisiana.gov/ or consult a tax professional if your situation is complex. Because this is the final louisiana franchise tax return, double-check your filing and payment to ensure no issues remain outstanding.

What Changes in 2026 and Beyond

Beginning January 1, 2026:

• Louisiana corporations do not owe franchise tax.
• The CIFT form 620 is not filed.
• The $300 minimum annual fee is eliminated.
• The 0.275% tax rate applies to no tax period.
• Corporations still file Louisiana corporate income tax returns, which are separate from franchise tax filings.
• Corporations still pay Louisiana corporate income tax at the flat 5.5% rate.

For business owners and tax professionals, this simplifies the Louisiana corporate tax landscape. One less form to file. One less calculation to track. One less annual cost associated purely with incorporation in Louisiana.

Next Steps and Planning

If you are incorporated in Louisiana or manage Louisiana corporation tax obligations:

• For 2025: File your louisiana franchise tax return on time by March 15, 2026. Do not skip this final filing, as penalties and interest apply to late or missing returns even though the franchise tax is being repealed.
• For 2026 and beyond: Stop including franchise tax in your compliance checklist. Update your tax calendars and payroll system configurations to reflect that the franchise tax no longer exists.
• Consult a tax professional: If your business is complex, has multiple states, or you are unsure how the louisiana franchise tax repeal affects your specific situation, speak with a certified public accountant or tax attorney licensed in Louisiana.
• Notify your accountant or bookkeeper: Make sure anyone who handles your Louisiana tax filings knows that the franchise tax is being repealed after 2025.

Disclaimer

This article is informational content about the Louisiana franchise tax repeal. It is not legal advice, tax advice, or professional guidance. Tax law is complex, and individual circumstances vary. The information presented reflects the Louisiana franchise tax repeal as of October 2026, but you should verify all details with the Louisiana Department of Revenue and consult a qualified tax professional or attorney before making decisions based on this information.

For official guidance on the Louisiana franchise tax, Louisiana corporate income tax, and franchise tax repeal details, visit the Louisiana Department of Revenue at https://revenue.louisiana.gov/ or contact the department directly.