New Orleans businesses that have fallen behind on sales tax payments have a three-month window to make things right before the city comes after them harder. Starting October 1, the city's new Sales Tax Amnesty Program will forgive 100% of penalties and cut accrued interest in half for any delinquent business that pays what it owes by December 31, 2026.
NOLA.com reported on the offer, which would forgive penalties and cut accrued interest by 50% for businesses that settle their accounts before the year closes. Mayor Helena Moreno said the city is giving businesses “a limited-time opportunity to resolve outstanding tax obligations while reducing the financial burden of penalties and interest,” per NOLA.com's reporting. She added that sales tax revenues are critical to providing the services and investments New Orleanians rely on.
A Deficit That Won't Wait
The timing is no accident. On Tuesday, Moreno presented a proposed operating budget for fiscal year 2027 aimed at closing a projected $100 million municipal deficit, relying on roughly $77 million in spending cuts alongside one-time funds, according to WWNO. Sales and special taxes — covering hotels, parking, drugs and other items — are projected to make up more than 40% of the proposed 2027 general fund budget, per NOLA.com.
The proposed cuts are severe. The station's report notes the plan would eliminate 152 full-time city positions and impose a 10% salary cut on both Moreno and Chief Administrative Officer Joe Giarrusso. NOLA.com reports the cuts also target the city-run low-barrier homeless shelter, Mardi Gras parade cleanup, and dozens of city jobs. Moreno has also proposed rolling forward millages, which could generate $26 million to $42 million depending on which are approved; that revenue, along with other increases, could soften some of the proposed cuts, according to the outlet.
What Businesses Actually Owe — And What Happens Next
An administration spokesperson told NOLA.com that delinquent businesses owe about $10 million and that officials hoped to collect around $3 million through the amnesty. Under Louisiana tax administration standards, late-filing penalties are 5% for the first 30 days and an additional 5% for each subsequent 30-day period or fraction, capped at 25% of the tax due; a separate late-payment penalty is 0.5% per 30-day period, according to Numeral.
Louisiana sales tax returns generally are due by the 20th day of the month following collection, according to Numeral. As of 2026, Numeral lists a combined New Orleans sales tax rate of 11.45%, including a 4.45% Louisiana state sales tax. Local rates vary. NOLA.com reports that a sales tax crackdown will follow in 2027, once the amnesty window closes.
Losses Piling Up Elsewhere
The amnesty push arrives against a backdrop of external funding losses that have squeezed city finances all year. In June, Governor Jeff Landry issued line-item budget vetoes that eliminated more than $33 million in expected state funding for New Orleans infrastructure, housing, and non-profit operating support, as Hoodline previously reported. City officials said at the time that more than half of the governor's statewide line-item vetoes specifically hit New Orleans projects.
Moreno took office in January 2026, and her administration has leaned on furloughs, hiring freezes, and now a tax amnesty amid the city's budget strain.
Louisiana has previously offered tax amnesty programs, according to Jones Walker LLP. Terms varied across amnesty phases.
The New Orleans City Council will take public and city department input during budget hearings in the coming weeks, with the council's final vote expected in November, according to NOLA.com. Whether the sales tax amnesty meaningfully closes the city's revenue gap before then remains an open question the administration has yet to answer.
