New York needs no introduction. Home of the Big Apple and Niagara Falls, everybody knows what the Empire State has to offer! But you might not know what the state requires when it comes to sales tax.
If you’re selling in New York, you might be on the hook for collecting and remitting sales tax.
How much should you charge, and how much will you owe? Let’s run through New York sales tax in this guide.
Sales Tax Rates in New York
New York uses a state sales tax rate of 4.0%, but many cities, counties or school districts add a local tax rate. Plus the region around New York City has an extra Metropolitan Commuter Transportation District (MCTD) rate! Local rates range from 3-4.5%, while the MCTD is a tiny 0.375%.
For instance, Saratoga county charges a combined rate of 7%, while Albany charges 8%, and New York City totals 8.875%. Wherever your customer is located, that’s the total rate you should apply. To know for sure, check out the list from the New York Department of Revenue.
What is taxable in New York?
- Tangible products are generally taxable in New York, with a few exceptions. You can find a list of examples in the next section!
- Services are generally not taxed, except for a few specific ones. Plus, New York City has its own special list of taxed services, mostly related to beauty and grooming.
- Some digital products are taxed, some are not. Pre-written software, including SaaS, is taxed.
Sales Tax Exemptions
Some purchases in the Empire State are exempt from sales tax collection. A few include:
- Most groceries and health supplements (candy and soda don’t count!)
- Over-the-counter and prescription medicine
- Medical supplies and certain items related to family planning
- Certain clothing and shoes that are less than $110
- Certain publications like newspapers and college textbooks
- Religious items
- Manufacturing equipment
- Customized computer software (this means designed from scratch, specifically for one purchaser!)
Certain types of non-profit customers are exempt, too. Governmental, religious, educational, scientific or literary organizations might not have to pay sales tax to you.
Making Sense of New York Taxes
If you’re confused about whether your goods are subject to consumption tax in New York, we hear you. Collecting and remitting the correct amount of tax in the state is complicated – especially when you add the economic nexus and Amazon service into the equation.
Fortunately, you don’t have to go it alone. Sign up for a free trial with Quaderno to see how easy and pain-free tax collection can be with the right partner by your side.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.