Lafayette, LA – Starting January 1st, Louisianians will face a significant increase in the state’s sales tax rate, making it the highest in the nation. The new rate, which rises from 4.45% to 5%, is part of a tax overhaul approved during a recent special legislative session. This hike is expected to impact the cost of goods and services across the state, as the combined state and local sales taxes will reach approximately 12%.
For consumers, the effect will be felt immediately. On a $10 purchase, the sales tax will rise by an additional $0.55, increasing the total cost to $11. While the tax increase aims to generate additional revenue for the state, some local business owners and workers are expressing concerns about its potential economic consequences.
Erin Landry, owner of Club Tan in Lafayette, is among those worried about the implications of the sales tax hike. She points out that the increase could hurt businesses, especially those selling items like tanning lotions and other products. “People are so strapped for cash right now, and any extra costs we add on could cut into our bottom line,” Landry said. Small businesses like hers, she believes, may struggle with the added financial burden.
The restaurant industry, too, is bracing for the impact. Allie Guidry, a local server, fears the increase will discourage dining out and could lead to lower tips for service workers, who often rely on gratuities to supplement their wages. “It’s already expensive, and you already have to tip on top of that. If people start pinching pennies and cutting back on tips, this will affect everybody,” Guidry explained. She also shared her personal experience, noting that her recent grocery bill was $15 higher than expected, a change she attributes to rising costs in the area.
As part of the new law, the state’s sales tax rate will remain at 5% for the next five years. After that, it is set to gradually decrease to 4.75%, though many locals are uncertain about how this will affect the economy in the long term. While the tax increase is expected to bring in much-needed revenue for the state, its impact on consumer behavior, local businesses, and service industry workers remains a topic of concern.