Louisiana was the first site of oil drilling over water in the world, on Caddo Lake in the northwest corner of the state. The oil and gas industry as well as its subsidiary industries such as transport and refining, have dominated Louisiana's economy since the 1940s. Beginning in 1950, Louisiana was sued several times by the U.S. Interior Department, in efforts by the Federal Government to strip Louisiana of its submerged land property rights. These control vast stores of reservoirs of oil and natural gas.

When oil and gas boomed in the 1970s, so did Louisiana's economy. Likewise, when the oil and gas crash occurred in the 1980s, in large part due to monetary policy set by the Federal Reserve, Louisiana real estate, savings and loans, and local banks fell rapidly in value. The Louisiana economy as well as its politics of the last half-century cannot be understood without thoroughly accounting for the influence of the oil and gas industries. Since the 1980s, these industries have consolidated in Houston.

The total gross state product in 2005 for Louisiana was US168 billion, placing it 24th in the nation. Its per capita personal income is US$30,952, ranking 41st in the United States.

The state's principal agricultural products include seafood (it is the biggest producer of crawfish in the world, supplying approximately 90%), cotton, soybeans, cattle, sugarcane, poultry and eggs, dairy products, and rice. Industry generates chemical products, petroleum and coal products, food processing and transportation equipment, and paper products. Tourism is an important element in the economy.

The Port of South Louisiana, located on the Mississippi between New Orleans and Baton Rouge, is the largest volume shipping port in the Western Hemisphere and 4th largest in the world. It is the largest bulk cargo port in the world.

New Orleans and Shreveport are also home to a thriving film industry. State financial incentives and aggressive promotion have put the local film industry on a fast track. In late 2007 and early 2008, a 300,000-square-foot film studio will open in Treme, with state-of-the-art production facilities, and a film training institute. Shreveport has been given the moniker "Hollywood South" for the number of films being shot here. These have included Mr. Brooks, Premonition, and Factory Girl.

Tabasco sauce, which is marketed by one of the United States' biggest producers of hot sauce, the McIlhenny Company, originated on Avery Island.^[10]

Louisiana has three personal income tax brackets, ranging from 2% to 6%. The sales tax rate is 4%: a 3.97% Louisiana sales tax and a .03% Louisiana Tourism Promotion District sales tax. Political subdivisions also levy their own sales tax in addition to the state fees. The state also has a use tax, which includes 4% to be distributed by the Department of Revenue to local governments. Property taxes are assessed and collected at the local level.

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