New Orleans considers hotel occupancy tax based on room count

On April 2, 2025, Louisiana's House of Representatives introduced House Bill 298, a legislative proposal aimed at establishing a new hotel occupancy tax in New Orleans. This bill seeks to generate revenue for the city by imposing a tiered tax structure based on the number of guest rooms in hotels. Specifically, the bill proposes a tax of one dollar per occupied room per night for hotels with ten to 299 rooms, one dollar for those with 300 to 999 rooms, and two dollars for hotels with 1,000 or more rooms.

The bill outlines that the tax will be levied and collected following the same procedures as existing local taxes, requiring approval from both the governing authority of New Orleans and the electorate. Notably, the authority to collect this tax will cease once all related bonds or debt obligations are fully paid.

In terms of revenue utilization, the bill stipulates that funds generated from the tax will first cover administrative and operational expenses of the authority. Any surplus revenue remaining at the end of the fiscal year may be allocated to the city or retained for future expenses.

The introduction of House Bill 298 has sparked discussions among lawmakers and stakeholders regarding its potential economic implications. Proponents argue that the tax could provide much-needed funding for city projects and infrastructure improvements, particularly in a city heavily reliant on tourism. However, there are concerns about the impact on hotel occupancy rates, especially in a competitive market.

As the bill progresses through the legislative process, it is expected to face scrutiny and debate. Key discussions will likely focus on the balance between generating revenue and maintaining a favorable business environment for the hospitality sector. The outcome of these deliberations could significantly influence New Orleans' economic landscape and its approach to funding city initiatives in the coming years.