Louisiana fully conforms to federal §168(k) via rolling IRC adoption — STR investors get 100% of the federal bonus deduction on the Louisiana return with no add-back. With the new 3.0% flat individual income tax rate effective January 1, 2025, the state savings are modest but frictionless. Federal and state savings stack for property acquired and placed in service after January 19, 2025. For side-by-side context, the 50-state §168(k) conformity overview shows how Louisiana stacks up against every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
How Louisiana adopts §168(k) — the rolling conformity mechanic
Louisiana has rolling IRC conformity for individual income tax depreciation purposes. When Congress amends the Internal Revenue Code — as it did when the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) restored 100% bonus depreciation permanently for property acquired and placed in service after January 19, 2025 — Louisiana automatically adopts the new federal treatment without needing separate state legislation.
The controlling statute, La. R.S. §47:293, defines Louisiana net income by reference to federal AGI with a short list of state-specific adjustments. None of those adjustments modifies §168(k). And because Louisiana's 2024 flat-tax overhaul (HB 10, 2024 special session) simplified the individual income tax to a flat 3.0% rate effective January 1, 2025, the state calculation is straightforward.
Static-conformity states required legislation to adopt OBBBA. Louisiana didn't.
Worked example — $150,000 federal deduction plus extra Louisiana savings
Consider a Louisiana STR investor with a $150,000 Year-1 §168(k) deduction on a short-term rental acquired and placed in service after January 19, 2025. Assume the investor is in the 37% federal bracket and pays Louisiana's 3.0% flat individual income tax.
| Line | Amount | Notes |
|---|---|---|
| Federal §168(k) deduction | $150,000 | OBBBA 100% bonus |
| Federal Y1 tax savings @ 37% | $55,500 | Ordinary bracket |
| Louisiana state deduction | $150,000 | Full conformity, no add-back |
| Louisiana Y1 state tax savings @ 3.0% | $4,500 | Flat rate (post-HB 10) |
| Total Year-1 combined savings | $60,000 | Federal + Louisiana |
Because Louisiana follows federal net income closely, there are no basis differences to track and no separate depreciation schedule to maintain across the property's holding period.
The statute explained
The controlling Louisiana authority is La. R.S. §47:293, which defines Louisiana net income for individuals starting from federal AGI. Because no adjustment is specified for §168(k) bonus depreciation, the federal deduction reduces Louisiana taxable income dollar-for-dollar.
How Louisiana compares to decoupled states
The contrast with neighboring decoupled states is significant. In California, an STR investor with the same $150,000 federal deduction adds back the entire amount on the state return — giving up roughly $19,950 in Year-1 state tax savings at California's 13.3% top rate. Georgia, New York, Pennsylvania, and about two dozen other states impose similar 100% add-backs.
Louisiana investors face none of that. The federal deduction flows through unchanged, and the extra $4,500 in state savings stacks on top of the federal $55,500. To model Louisiana against any decoupled state at any deduction amount, use the state conformity tool.
What this means for your STR purchase decision
Louisiana's full conformity is a real underwriting advantage. When you're evaluating a New Orleans French Quarter, Baton Rouge, or Lafayette-area STR purchase, you can price in both federal and state Year-1 tax savings at underwriting — not just the federal deduction. On a mid-sized property with $150,000 in bonus-eligible components, that's an extra $4,500 in first-year cash flow, on top of the $55,500 federal benefit.
The qualifier: the property must be acquired and placed in service after January 19, 2025 to qualify for OBBBA's 100% federal bonus. Pre-January 19, 2025 acquisitions fall under the earlier phaseout schedule.
Before you make an offer, run the address on your property to see the calibrated Year-1 bonus-eligible dollar amount — DepreciMax reports classify every finish as 5-year, 15-year, or 39-year and quantify the federal plus Louisiana state savings.
Analyze a specific Louisiana property
Run any Louisiana STR listing through DepreciMax's $99 property report — line-item finish classification with Louisiana-specific state impact math.
Frequently asked questions
Do I get bonus depreciation on both my federal and Louisiana return?
Yes. Louisiana adopts federal net income by reference under La. R.S. §47:293, with limited state adjustments and no §168(k) modification. STR investors claim the full federal 100% bonus deduction, and it flows through to the Louisiana return with no add-back. For property acquired and placed in service after January 19, 2025, OBBBA's permanent 100% bonus applies at both the federal and Louisiana levels.
What is Louisiana's individual income tax rate?
Louisiana adopted a flat 3.0% individual income tax rate effective January 1, 2025 (HB 10, 2024 special session). On a $150,000 federal §168(k) deduction, a Louisiana STR investor picks up $4,500 in additional Year-1 state tax savings on top of the federal deduction.
Does Louisiana plan to change its §168(k) conformity in 2026?
No public legislation is pending to decouple Louisiana from federal §168(k) for 2026. The 2025 flat-tax overhaul (HB 10) did not add a bonus depreciation modification, and rolling conformity for depreciation remains in place.
What happens on sale — does Louisiana recapture bonus depreciation?
Louisiana follows federal basis and federal §1245 / §1250 recapture rules because the state allows the full federal §168(k) deduction. There is no separate Louisiana recapture calculation for bonus depreciation; recapture flows through federal net income to Louisiana taxable income unchanged.
Does Louisiana conformity apply to §179 as well?
Yes. Louisiana conforms to federal §179 expensing at the federal cap without a separate state limit. STR investors can layer §179 (for qualifying tangible personal property) on top of §168(k) at both the federal and Louisiana levels, subject to federal §179 income limits.
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →