There is no New Orleans city income tax. The Louisiana Constitution prohibits parishes and municipalities from levying their own income taxes, so people who live or work in Orleans Parish file only a federal return and a Louisiana state return on their personal earnings.1New Orleans City Council. Citizens’ Guide to the New Orleans City Council – Section: The City Budget The city raises its revenue through property taxes, sales tax, and business-related fees instead.
Why New Orleans Can’t Tax Your Paycheck
The New Orleans City Council’s own budget guide states that “local governments may not levy an income tax or a gasoline tax” under the state constitution.1New Orleans City Council. Citizens’ Guide to the New Orleans City Council – Section: The City Budget That bar is statewide, so no Louisiana city or parish withholds a local income tax from wages or asks for a separate local return.
If you work a W-2 job in New Orleans and live there, your paycheck is subject to federal income tax, the Louisiana state income tax, and Social Security and Medicare withholding. Nothing else comes out for the city. There is no Orleans Parish equivalent to the local wage taxes seen in places like New York or Philadelphia.
What You Actually Pay Louisiana
Starting with the 2025 tax year, Louisiana charges a flat 3% individual income tax on all taxable income, regardless of filing status.2Louisiana Department of Revenue. Individual Income Tax The flat rate replaced the state’s older graduated brackets through Act 11 of the 2024 Third Extraordinary Legislative Session.3Louisiana Department of Revenue. Louisiana Department of Revenue IT540i Instructions
Before the 3% rate applies, you subtract a standard deduction. For 2026 the deduction is $12,875 for single filers and those married filing separately, and $25,750 for married couples filing jointly, qualified surviving spouses, and heads of household.4Louisiana Department of Revenue. Louisiana Withholding Tables and Formulas The Louisiana Department of Revenue collects and processes this tax directly. The City of New Orleans has no role in it.
The One Local Tax That Looks Like an Income Tax
New Orleans cannot tax personal earnings, but it does tax business activity. Any person or company conducting business in Orleans Parish must obtain an occupational license and pay the occupational license tax.5City of New Orleans. Occupational License It applies to corporations, LLCs, partnerships, sole proprietors, and professionals offering services for profit.
Two features of this tax catch people off guard. First, it is calculated on gross receipts, not net profit. A business that brings in $500,000 and nets $30,000 after expenses still owes based on the full $500,000. Second, it is not limited to storefronts. If you freelance, drive for a rideshare company, or run any revenue-generating operation from your home, you are expected to hold a Home-Based Business Occupational License.6City of New Orleans. Home-Based Business Occupational License
The tax itself is structured as flat-dollar amounts tied to revenue brackets inside category tables (retail, wholesale, lending, brokerage, contractors, public utilities, and a catch-all). The minimum is $50 for any business with gross receipts under $50,000. The retail table tops out at $6,200 at $5.5 million or more in sales, and the overall ceiling is $7,500 for wholesale dealers, contractors, and public utilities. Businesses that don’t fit a named category are taxed at 0.1% of annual gross receipts, with a $50 minimum and a $2,000 maximum.7City of New Orleans. Occupational License Tax Tables
Licenses expire on December 31, with renewal running January 1 through the end of February and delinquency starting March 1. Late payment carries a 5% penalty per 30-day period (capped at 25%) plus 1.25% interest per 30-day period on the tax owed.8City of New Orleans. Renewal Business and Home-Based Occupational LicenseOccupational License Electronic Renewal Form 8030 Instructions
Where New Orleans Actually Gets Its Money
Since there is no local income tax, residents feel the city’s tax reach mostly through sales tax and property tax. The combined sales tax rate in Orleans Parish is 10%, split evenly between the 5% state rate and the 5% local rate. Food and drugs carry a lower local rate of 4.5%, for a combined 9.5%.9City of New Orleans. Orleans Parish Sales Tax Rate
Property taxes work through millage rates. The total citywide millage for 2026 is 121.20 mills, which equals $121.20 per $1,000 of assessed value. Louisiana assesses residential property at 10% of fair market value, so a $300,000 home has an assessed value of $30,000 and a roughly $3,636 annual bill before exemptions. The homestead exemption shields the first $75,000 of a home’s value from parish property taxes, which eliminates or sharply reduces the bill for many owner-occupants.
The absence of a city income tax does not make New Orleans a low-tax city overall. The revenue simply comes from property, sales, and business licensing rather than from wages.