A Louisana bill seeks to establish a tax credit for motor vehicle insurance premiums paid in excess of $2,500 per vehicle at a cap of $5,000 per vehicle. 

HB331 was introduced by Rep. Edmond Jordan (D-29) on April 3. 

If the income tax credit exceeds the total tax liability of the taxpayer in the taxable year the amount of the unused credit may be carried forward as a credit for subsequent income tax liabilities for a period not to exceed five taxable years. 

Taxpayers claiming the credit should maintain all records necessary to verify their eligibility for the credit and the amount of credit claimed, the bill says. 

The secretary of the Department of Revenue will have the authority to promulgate rules that are necessary to implement the bill. 

If passed, the bill would take effect Jan. 1 and would expire Dec. 31, 2031. 

Insurance Business Magazine says, if passed, Louisiana would be the first state to offer an income tax credit. 

“However, other states have already used tax credits in efforts to ease insurance-related costs,” the article says. “Florida, for example, passed a law in 2024 eliminating taxes and fees on home and flood insurance premiums for one fiscal year. This measure led to average savings of about $140 for homeowners, according to the Insurance Information Institute.”

The Insurance Research Council found that Louisiana was the least affordable state in the nation for personal auto insurance last year. It said the state had a combination of high insurance expenditures and relatively low median income. 

“In 2022, the average annual expenditure for auto insurance in Louisiana was $1,588 per vehicle, which is nearly 40% above the national average,” the report says. “Auto insurance costs accounted for 2.67 percent of the median household income in the state.”

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