A proposed bill in Louisiana, HB331, introduced by Rep. Edmond Jordan (D-29) on April 3, seeks to establish a tax credit for motor vehicle insurance premiums that exceed $2,500 per vehicle, with a maximum credit of $5,000 per vehicle. If the tax credit exceeds the taxpayer’s total tax liability for the year, the unused amount can be carried forward for up to five subsequent taxable years. Taxpayers claiming this credit are required to maintain records verifying their eligibility and the claimed credit amount. The Department of Revenue secretary will be authorized to create rules for implementing the bill. If passed, the bill will take effect on January 1 and expire on December 31, 2031. According to Insurance Business Magazine, Louisiana would be the first state to offer an income tax credit for insurance premiums if the bill is enacted. However, other states have used tax credits to reduce insurance-related costs. For instance, Florida eliminated taxes and fees on home and flood insurance premiums for one fiscal year in 2024, resulting in average savings of about $140 for homeowners. The Insurance Research Council reported that Louisiana was the least affordable state for personal auto insurance last year due to high insurance costs and relatively low median income. In 2022, the average annual auto insurance expenditure in Louisiana was $1,588 per vehicle, nearly 40% above the national average, accounting for 2.67% of the state’s median household income.
