New York Sales Tax
New York Sales Tax At a Glance
State rate: 4%
Maximum combined rate: 8.875%
Sourcing: Destination
Tax Holidays: None
Governing Body: New York Department of Taxation & Finance
New York sales tax is one of the more complicated configurations in the United States. There are multiple levels of sales tax (state, county, city, and others) to be considered, particularly within New York City. Because the rules and regulations are complicated and may be difficult to understand, we’ve provided this guide to inform retailers of the basics. But because tax laws change regularly, we advise you to review the New York Department of Taxation & Finance website and/or seek legal advice if you intend to do business within the state of New York.
New York Sales Tax Rates
New York State sales tax varies by location. There is a state sales tax as well as city, county, or school district rates. New York (NY) Sales Tax Rate: 4% plus any local tax rate imposed by city, county, or school district, typically between 3-5%. In addition, within the Commuter transportation district, there is a sales tax surcharge of 0.375%.
New York (NY) Sales Tax Rate: 4%
Maximum rate for local municipalities: 8.875%
New York Sales Tax varies by county, but a given county may have more than one rate due to local taxes. Therefore, a retailer cannot determine the tax rate simply by knowing the county. Likewise, New York sales tax also cannot be accurately determined by zip code alone.
New York collects destination-based sales tax, that is, local sales tax based on the destination of shipment or delivery within the state by small businesses. There is no sales tax charge for deliveries outside the state. Learn more details at their website.
New York Sales Tax Nexus
Corporations and small businesses that have a physical location in the state of New York are required to collect sales tax. This is known as “nexus”. Those outside of New York will meet these requirements in event of the following:
- Businesses that sell tangible personal property and make 12 or more deliveries of these products using their own vehicles. In other words, delivery by common carriers (UPS, FedEx, or USPS) or LTL providers do not count toward these deliveries.
- You have employees or other representatives in the state who solicit sales or products or services.
- You solicit the sale of tangible personal property or services via catalog or other advertising materials and have some additional connection with the state.
- If you are associated with a vendor in-state, via an ownership test. (See this PDF for complete details.)
- If you have New York affiliates, and your sales to New York buyers exceed $10,000 in a calendar year, you will incur click-through nexus, and be required to collect and remit sales tax, the same as an in-state retailer.
Additionally, economic nexus was established in 2018 and revised in 2019, requiring that any entity that makes $500,000 in sales of tangible personal property and 100 or more sales in a given calendar year must collect and remit sales tax to the state of New York, regardless of location. Marketplace sales are included when determining if a company meets this threshold.
What is Taxable in New York?
As expected, the retail sale of most tangible physical products is subject to New York sales tax. Certain services, admissions, and dues are also taxable. New York lists the following items as being subject to sales tax:
- Tangible personal property, unless a specific exemption has been defined, such as food for home consumption
- Utilities services: gas, electricity, refrigeration, steam, and telephone
- Selected services: telecommunications, interior decorating/design, protective/detective services, and passenger transportation services (see note below)
- Food and drink sold in restaurants or other facilities, or by caterers
- Hotel stays
- Some admission charges and dues
Food for home consumption, prescription and non-prescription medication, and sales to the government or charitable/exempt organizations are not taxable. Other items exempt from sales tax include certain medical devices, machinery and materials used in research, and clothing or shoes that cost less than $110 per item.
Certain other services are subject to New York City sales tax but not state or other sales tax. These include beautician services; massage services; weight control and related services; and written/oral credit rating services. For a complete list, see this guide.
Registration
Sellers of tangible personal property and providers of taxable services must register with the NY tax department before doing business. This registration process will provide the business with a Certificate of Authority. This applies regardless of whether the business operates from a commercial property or is a home-based small business. You must have a NY.gov ID before you can apply.
Visit the Department of Taxation & Finance website for:
- State Tax Web File – Create an account so you can file online, schedule payments in advance, save bank account for payments and more.
- Register as a sales tax vendor.
- Sales and Use Tax information.
- Access sales tax forms for the current period.
At the time of this writing, out-of-state sellers who meet economic nexus requirements are required to register within 30 days of meeting the tax threshold.
Filing
The E-file mandate requires businesses to file Web file their tax returns and pay electronically if they
- don’t use a tax preparer to prepare sales tax returns;
- use a computer to prepare, document, or calculate returns; and
- have broadband Internet access.
This covers most filers. You must register with Online Services first.
In addition, PrompTax is an electronic filing and payment program that is mandatory for certain businesses. If you have taxable receipts of more than $500,000 or have an annual liability for prepaid sales tax on motor fuel and diesel motor fuel exceeding $5 million, you must enroll and file there.
Deadlines
New York requires businesses to file and pay sales tax either monthly, quarterly, or annually. The frequency with which you must file is determined by your business’s estimated yearly income.
Monthly Filers: No later than 20 days after filing period (20th of each month, or next available business day).
| Period | Due Date |
|---|---|
| January | February 20 |
| February | March 20 |
| March | April 20 |
| April | May 20 |
| May | June 20 |
| June | July 20 |
| July | August 20 |
| August | September 20 |
| September | October 20 |
| October | November 20 |
| November | December 20 |
| December | January 20 |
Quarterly Filers: No later than 20 days after filing period. (20th of month following end of quarter, or next available business day)
| Period | Due Date |
|---|---|
| March – May (Q1) | June 20 |
| June – August (Q2) | September 20 |
| September – November (Q3) | December 20 |
| December – February (Q4) | March 20 |
Annual Filers: March 20th
If a due date falls on a weekend or legal holiday, the deadline is extended to the next business day.
Special rules apply to sales tax vendors and employers subject to electronic funds transfer requirements. See PrompTax above.
Penalties and Interest
New York has strict penalties for a failure to file a return and/or failure to pay sales tax due, as well as additional money owed as interest. In addition to civil penalties, there are also possible criminal repercussions, including jail time.
For failing to file a return, the civil penalties are as follows:
- Failing to file a return with no tax due: $50.
- File a return late by 60 days or less: 10% of the tax due for the first month, plus 1% for the second month if applicable. The minimum penalty, in this case, is $50.
- File a return more than 60 days late: The greatest amount of:
- 10% of the tax due for the first month, plus 1% for each additional month or partial month. This penalty should not exceed 30%.
- $100, or 100% of the amount required to be shown as tax on the return, whichever is less; or
- $50.
For failing to pay tax due, the civil penalties are as follows:
- If you file a return but do not pay the tax due, the penalty is 10% for the first month plus 1% for each additional month or part of a month, not to exceed 30%.
- If you pay less than 75% of the tax due: 10% of the tax you failed to report
- If you fraudulently fail to pay: an amount equal to twice the amount of the tax not paid, plus interest, paid at the greater of 14.5%, or the rate set by the Tax Commissioner
There are additional penalties for not filing or displaying a Certificate of Authority as required, or if you violate certain laws relating to documents and record-keeping.
Complete details can be found at this location on the New York State Department of Taxation and Finance website.
Vendor Collection Credit
You may be eligible for a vendor collection credit if you file on time and pay the full amount due. This credit reduces how much you send to NY State with your return. Learn more details at their web page.
Resources
New York Sales Tax Software
TaxTools by AccurateTax is a simple and cost-effective solution for New York retailers to calculate and collect sales tax on all products shipped anywhere within the state of New York, as well as any other states where a retailer may have nexus. If you are struggling to comply with the detailed and complex New York sales tax requirements, including apparel tax, tobacco tax, or other product classes, consider TaxTools. Configuring sales tax on your ecommerce store has never been easier. Contact us for more information or register for a free trial of the TaxTools software.
You can also use our free sales tax calculator to look up the rate for any New York state address.
Last updated July 2024