NYC's local income tax (often referred to as the city portion) tops out at 3.876% for higher earners (with graduated rates starting at 3.078% for lower brackets, depending on filing status and income level). This is in addition to New York State's top marginal rate of 10.9% (for high earners), making the combined state + local marginal rate on ordinary income (including short-term capital gains) up to about 14.8% before federal taxes. Few major U.S. cities impose a local income tax at all—most rely on state-level income taxes (if any), sales taxes, property taxes, or other levies. NYC is one of the more notable examples with a meaningful city-level income tax. Here's a comparison with other major cities (based on current 2025–2026 rates for high earners/residents; rates can vary by income bracket, filing status, and exact year):
- New York City (NY): 3.078%–3.876% local (top ~3.876%). Combined with NY state (up to 10.9%): ~14.8% total state + local.
- Chicago (IL): No city income tax. Illinois state flat rate is 4.95%. (Some sources note minor local add-ons in certain areas, but none for Chicago proper on general income.)
- Los Angeles / San Francisco (CA): No city income tax. California state top marginal rate is 13.3% (plus a 1% mental health surcharge for very high earners, pushing effective top to 14.4% in some cases). LA and SF residents face the full state rate but no additional local income tax.
- Boston (MA): No city income tax. Massachusetts state flat rate is 5% (with a 4% surtax on high earners over ~$1M, making top effective ~9%).
- Seattle (WA): No city or state income tax on wages/ordinary income (Washington has a separate capital gains tax on high earners, but it doesn't apply to ordinary income or short-term gains in the same way).
- Miami (FL): No city or state income tax. Florida has no state income tax.
- Houston / Dallas (TX): No city or state income tax. Texas has no state income tax.
- Atlanta (GA): No city income tax. Georgia state flat rate is around 5.39% (phasing down in some reforms).
- Philadelphia (PA): Yes—Philadelphia has a local wage tax (earned income tax) of 3.79% for residents (non-residents pay 3.44%). Combined with Pennsylvania state flat rate of 3.07%: ~6.86% total state + local for residents.
Key Takeaways
- NYC's 3–4% local tax is relatively high among cities that have one—Philadelphia's is similar (3.8%), but most major cities (especially in no-income-tax states like TX, FL, WA) have zero local income tax.
- Only a handful of U.S. cities levy meaningful local income taxes (e.g., NYC, Philadelphia, some in Maryland like Baltimore, or certain Ohio/Kentucky locales), and NYC's is among the highest in that small group.
- For high earners, cities in high-state-tax states like San Francisco/LA (CA ~13.3%) or NYC (NY ~10.9% + 3.9%) often end up with the heaviest combined burdens, even if the local portion varies.
- Many "major cities" in no-state-income-tax areas (e.g., Houston, Dallas, Miami, Seattle) offer the lowest combined income tax exposure at 0% state + local.
This makes NYC stand out as one of the more heavily taxed major cities on ordinary income/short-term gains at the local level, though the overall picture depends heavily on state taxes too.