New York’s sales tax rates range from 7% to 8.875%. The base sales tax rate is 4%. Local tax rates range from 3% to 4.875%, which includes a 0.375% MCTD tax in New York City and seven surrounding counties.
New York State has a 4% base sales tax rate, but cities and counties add their own local taxes. In New York City and seven surrounding counties, buyers pay an additional 0.375% tax for the Metropolitan Commuter Transportation District (MCTD).
This means a business owner will charge a combined rate between 7% and 8.875%, depending on the delivery address. A buyer in Glens Falls will pay 7%, while a buyer in New York City will pay 8.875% because of additional local taxes, including the MCTD tax.
This sales tax applies to most tangible personal property and certain services, like utilities and telephone service. Some tangible personal property may be exempt from sales tax, but local tax jurisdictions can opt out of exempting items.
Business owners should check if they meet the requirements for economic nexus in New York. In the preceding four sales tax quarters, you must have more than $500,000 in gross receipts from sales of tangible personal property delivered into New York and more than 100 such sales.
Before you charge New York sales tax, you must register for a NY.gov business account and register as a vendor.
When you’re calculating sales tax rates for your customers, you’ll base the rate on the address where the customer takes delivery. To ensure that you’re using the most accurate rate, look up the delivery address on the state’s Jurisdiction/Rate Lookup by Address tool.
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New Yorkers can expect to pay between 7% and 8.875% in sales tax. This includes a 4% base sales tax rate. Each tax jurisdiction applies its own local taxes that range from 3% to 4.875%. The MCTD tax of 0.375% applies in the five New York City boroughs and seven surrounding counties.
A zip code or city name isn’t enough information to ensure you’re charging the correct sales tax rate. Use New York’s Jurisdiction/Rate Lookup by Address tool before applying a rate to a sale.
To calculate the amount of sales tax you should charge, you add the base rate of 4% and the local tax rate together. Then, multiply the sales tax rate by the purchase price to get the total amount of sales tax to charge.
For example, a buyer in Utica purchases an item for $50. You add the 4% base rate to the 4.75% local tax to get 8.75%. Then, multiply 8.75% by $50, which equals $4.375. Round up to $4.38.
New York uses destination-based sourcing. That means tax is calculated based on where the buyer receives the product, not where the seller is located.
No, New York is not a Streamlined Member State.
Nexus refers to the connection between a business and a state. A business has physical nexus if it has an office, warehouse, employee, or inventory in that state. Economic nexus means an out-of-state business meets the requirements for charging sales tax to customers in that state.
There are two other types of nexus that can sometimes apply. Affiliate nexus means a business has a connection with an affiliated company or representative that operates in that state. That can create nexus for an out-of-state company.
Click-through nexus occurs when a New York resident or business refers customers through website or affiliate links.
Before 2018, states couldn’t require out-of-state sellers to charge the state sales tax on online purchases. In South Dakota v. Wayfair, Inc., the U.S. Supreme Court overturned that precedent, and states with a sales tax began setting economic nexus thresholds.
The economic threshold in NY is both a certain number of transactions and a dollar amount in sales. Numeral makes it easy to determine whether you meet the nexus threshold with free nexus monitoring.
In New York, buyers must pay sales tax on purchases of tangible personal property unless it is specifically exempt. Utilities and certain services, like gas, electricity, and phone service, are also subject to sales tax. Travelers also must pay sales tax on hotel rooms and short-term rentals. Restaurants and bars must charge sales tax on food and beverages.
Some purchases are exempt from sales tax. Groceries and food for home consumption are not taxed. If you make a purchase from a government agency or tax-exempt organization, you will not be charged sales tax.
There is a third category of goods and services that are not taxable at the state level but may be taxable at the local level. For example, clothing and footwear under $110 per item or pair are exempt from the 4% state tax, but local treatment varies because cities/counties can choose whether to adopt the exemption.
In New York City, beautician services, hair restoration, tanning, nail services, massage, weight loss clinics, and credit rating services are all subject to New York City’s local sales tax.
Prewritten software is taxable in New York, even if it is delivered electronically or accessed remotely. Custom software is generally not taxable.
To purchase items for resale, a business owner must have a sales tax exemption certificate. This certificate is Form ST-120, Resale Certificate. Before a New York business can file for this certificate, they need a valid Certificate of Authority and its sales tax identification number.
If the business is out of state, they can file Form ST-120 without a New York registration number. They can provide the sales tax registration number from their home state, but they can’t provide an out-of-state resale certificate.
New York also doesn’t accept the Multistate Tax Commission Uniform Sales & Use Tax Resale Certificate or the Streamlined Sales Tax Exemption Certificate.
You should retain resale certificates for at least three years after the due date of the return the certificate relates to, or the date that return was filed, if later. Numeral can manage all your exemption certificates, so you don’t have to.
Certificates don’t expire. As long as you are purchasing from the same seller, you can use a blanket certificate. If your address, identification number, or other information changes, you’ll need to get a new certificate.
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Anyone who sells taxable property or services in New York must register with the Department of Taxation and Finance.
This includes:
In 2008, the New York State government passed legislation that created a presumption that certain sellers are sales tax vendors. A business falls under the presumption rule if it:
If your business meets the above requirements, you must register as a sales tax vendor by:
You must apply for the Certificate of Authority at least 20 days before you begin sales. There are two types of Certificates of Authority: regular and temporary. The application process is the same. The certificate you use depends on your business.
A regular Certificate of Authority is for businesses that regularly make taxable sales from a home, store, stand, or other location. This also applies to sellers at craft shows, flea markets, and antique shows. Even if you only occasionally sell at these events, you will need the regular Certificate of Authority.
If you intend to make taxable sales in New York for no more than two consecutive sales tax quarters in 12 months, you should apply for a temporary Certificate of Authority. The certificate is only valid for the dates listed.
If your business operates out of multiple locations, you will need a separate certificate for each location. You can use the same sales tax identification number and file a combined return. If you operate multiple businesses, each business must have a separate certificate.
Out-of-state sellers must register with the Department of Taxation and Finance when they establish physical or economic nexus. An out-of-state seller meets economic nexus when they meet both of these requirements in the preceding four sales tax quarters:
Once you cross the threshold, you have 30 days to register as a sales tax vendor, and you must begin collecting tax 20 days after that. Before you make taxable sales, you must have a Certificate of Authority.
Remote sellers apply for a Certificate of Authority through the New York Business Express. Since New York is not a member of the Streamlined Sales Tax Registration System, business owners cannot use that program.
When you have your business's Certificate of Authority, you can begin to collect sales tax by following these steps:
Marketplace providers like eBay and Amazon generally collect and remit New York sales tax on the taxable sales that they facilitate. A marketplace provider should provide a seller with ST-150: Marketplace Provider Certificate of Collection.
Instead of this certificate, the marketplace provider can have a publicly available agreement with the marketplace seller that states the provider will collect sales tax on these sales.
If you are selling on a marketplace platform, you are still responsible for tracking those sales and reporting the sales as nontaxable on your New York sales tax returns.
Shipping and delivery are taxable if the underlying product or service is taxable. If the seller lists the shipping or delivery charge separately, it is still taxable. It also applies if the seller personally delivers the order or hires a common carrier.
If a product or service is tax-exempt, then the shipping and delivery charge is generally exempt. This includes purchases with a valid resale or exemption certificate.
If the purchase contains a mix of taxable and exempt items, the single shipping charge is taxable. The seller can also allocate the shipping charge between taxable and exempt items, then apply sales tax to the taxable portion.
Numeral's shipping tax guide can help you determine when shipping is taxable.
Registered businesses must file sales tax monthly, quarterly, or annually. New York places most new vendors on a quarterly filing schedule to start. This may change later depending on taxable activity or amount of tax due.
Your Online Services account will show the filing frequency and due date.
When your business reaches $300,000 in receipts, you will begin filing monthly in the first month of the next tax quarter. You must submit Form ST-809 for the first two months. Then, you will file Form ST-810 to reconcile the entire quarter.
If your sales drop under $300,000, you will continue filing monthly until your taxable activity stays below that threshold for four consecutive quarters.
Returns are due within 20 days after the reporting period ends. Monthly returns are due on the 20th of the following month. Quarterly returns are due on March 20, June 20, September 20, and December 20. Annual returns cover March 1 through the last day of February and are due on March 20.
If the deadline is on a weekend or holiday, the return is due the next business day. Always check your Online Services Account for the latest notices and guidance.
To file New York sales tax online, you’ll use the New York Sales Tax Web File with your Business Online Services Account. You can make electronic payments from your bank account using Sales Tax Web File.
When your sales and use tax liability exceeds $500,000, the state will require you to enroll in PrompTax. You generally will make payments on an accelerated schedule.
Marketplace sellers or sellers with no taxable sales must file a tax return during each filing period. Don’t report the marketplace provider’s collected tax as your own tax due.
Business owners will file both state and local taxes on a combined return. However, they must break down taxable activity by local jurisdiction and complete the required local schedules. That’s why accurately tracking sales in each jurisdiction matters.
Certain items and locations may have additional schedules. For example, clothing and fuel may have separate schedules.
Certain transactions and services in New York City, Nassau County, and Niagara County require separate schedules. This New York filing guide can help you file taxes accurately.
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New York issues sales tax penalties if you:
Returns filed up to 60 days late are subject to a penalty of 10% on the tax due for the first month. For every additional month or partial month you’re late, the state imposes an additional 1% penalty up to 30%.
If you don’t owe tax, the state will still issue a minimum late-filing penalty of $50. If the return is more than 60 days late, the amount may increase.
If you file on time but pay the tax due late, the penalty is also 10% for the first month. It increases by 1% for each additional partial or full month. Interest will accrue on unpaid taxes.
Keep complete records of every invoice, receipt, sales record, exemption certificate, returns, and tax payments. Your records should show each transaction’s sales tax rate and amount.
If you’re a marketplace seller, you should also keep records of these transactions and your Form ST-150 certificates.
You should plan on keeping your records for three years from the due date of the return to which those records relate, or the date the return is filed, if later.
If you are subject to an audit or legal proceeding, you may need to keep your records even longer, according to New York’s recordkeeping requirements.
Numeral makes it easy to stay compliant with New York sales tax laws. We monitor your sales tax nexus and send you an alert when you approach New York’s threshold.
Numeral also manages your registration and helps you begin collecting and paying taxes on time.
New York’s destination-based system (as opposed to origin-based) requires sellers to calculate sales tax rates based on the delivery address. Numeral applies the correct state and local tax. It also applies MCTD’s 0.375% tax when required.
If you also sell through a marketplace, Numeral keeps those transactions separate from direct-to-customer sales. Numeral also prepares sales tax returns and handles remittance. It makes sure you don’t miss a filing deadline.
A U.S.-based tax expert reviews all filings before submission. You’ll get the added peace of mind of the Numeral Guarantee: if a filing error on Numeral's part causes penalties or interest, Numeral covers the cost.
Get started or book a demo with Numeral to start automating your sales tax compliance today.
What is the sales tax rate in New York?
The base statewide sales tax rate is 4%. Each local tax jurisdiction applies a local tax. New York City and several surrounding counties also apply an MCTD tax of 0.375%. This can raise the total combined tax rate up to 8.875%.
What is the economic nexus threshold in New York?
An out-of-state business must meet both of these requirements. It must have over $500,000 in gross sales during the preceding four sales tax quarters. It also must have more than 100 sales of tangible personal property in the same timeframe.
What services are taxable in New York City?
New York City taxes services like parking, credit reporting, hair and beauty services, tanning, nail services, massage, and gym memberships.
Are clothing and shoes taxable in New York?
It varies. Clothing and shoes with a price tag of less than $110 per item or pair are exempt from the base sales tax rate. Some tax jurisdictions may require businesses to charge their local tax rate.
I occasionally sell items at a craft fair, flea market, or antique market. Do I have to register as a sales tax vendor?
Yes, even if you only sell items occasionally, you must register as a sales tax vendor and obtain a regular Certificate of Authority. The temporary Certificate of Authority is not applicable to these sellers. New York no longer has a separate Certificate of Authority for craft and flea market vendors.
I have a NY.gov Individual Account. Can I use that for my business?
No, you must create a separate NY.gov business account to access the New York Business Express and apply for a Certificate of Authority.
Is SaaS taxable in New York?
Prewritten software, including SaaS, is generally taxable even if the customer accesses it online. Custom software may be exempt.
I sell on a marketplace provider that submits sales tax on my behalf. Do I still have to file state tax returns?
Yes, if you are registered in New York, you must continue filing returns and report marketplace sales even if they are nontaxable. If you don’t file returns, the state may impose a penalty of $50.
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