Sales Tax in New York (NY) 2024: Rates, Nexus, Registration for Ecommerce Businesses

We’ll cover the NY sales tax rate – and why some areas in the state have three separate sales taxes – as well as whether there’s a food tax in New York (the answer is yes). Then, we’ll walk you through how to register for a New York Sales tax permit so you don’t have to track down all the information yourself. Our 2024 Guide has everything you’ll need to do business in New York.

What is sales tax in New York?

New York has 3 types of sales taxes: a state sales tax, a local sales tax, and an additional sales tax for purchases within the Metropolitan Commuter Transportation District (MCTD).

How much sales tax is charged on a purchase in New York will depend heavily on where that purchase is being made in the state. The total New York sales tax rate is the sum of these three rates:

• A New York state sales tax rate of 4%
• Local New York sales tax rates that varies by locality that goes up to 4.75%
• A Metropolitan Commuter Transportation District sales tax of 0.375%

That means that the highest total sales tax rate for New York state is just over 9%.

Sales taxes don’t apply to all purchases made in New York.

For example, New York State exempts certain services like groceries and food from sales tax. New York also charges some additional taxes like a 6% tax on New York City parking and an 8% additional tax on Manhattan parking.

See the New York Department of Taxation and Finance website for more information about local and state rates or use the New York sales tax rate guide to find the local tax rate in specific localities.

What is the New York food tax?

What people generally mean by the New York food tax is the sales tax exemption that New York state provides on food and grocery purchases. This exemption is relatively broad but there are some exceptions to the things that are covered.

Here are some examples of the types of items that qualify for the New York food tax exemption:

• Canned goods
• Dairy products
• Fruits
• Vegetables
• Meat, poultry, fish
• Bakery items
• Snack items
• Baby food
• Dried fruit
• Nuts
• Frozen foods
• Food sweeteners
• Granola
• Packaged salads
• Baking ingredients

The New York food tax exemption doesn’t cover a number of items including:

• Hot prepared foods
• Food sold for consumption on the premises
• Sandwiches (whether heated or unheated)
• Soft drinks
• Candy
• Pet food

Read about the food tax in New York for more details about what qualifies and what doesn’t for the New York food tax exemption.

What is the restaurant tax in New York?

The New York restaurant tax is the state’s general local and state tax rate. However, there are certain items that could be sold in a restaurant that are exempt from taxes.

Here’s how to figure out whether tax should be charged:

• Food consumed on the premises is always taxable. That includes food consumed in a food court or at picnic tables outside a drive-in restaurant.
• Food sold for resale to an entity with a resale certificate is not taxable.
• Sandwiches are always taxable.
• Food that is sold that is unheated AND is being sold in a way that you would find it in a grocery store or supermarket is not taxable. For example, if you buy a bag of chips to go with your meal, the chips wouldn’t be taxable.

Learn more about the New York restaurant tax.

What is the New York clothing tax?

The New York clothing tax is a sales tax exemption on certain clothing items. Generally, clothing and footwear that’s priced under $110 per item is exempt from NY state sales tax and city sales tax. Purchases above $110 per item are subject to normal sales taxes in New York.

Learn more about the New York clothing tax.

What counts as taxable items in New York?

New York charges sales tax on any transaction where tangible personal property or services are transferred. However, the state has a number of sales tax exemptions.

Here are a few examples of items subject to sales tax in New York:

• Tangible personal property, unless an exemption applies
• Information services, telecommunications, and various other services
• Software as a Service (SaaS)
• Clothing over $110
• Most prepared food
• Soft drinks
• Utilities
• Certain services (ex. Interior decorating, drivers)

Learn more about what items are taxable in New York.

What are non-taxable items or sales tax exemptions in NY?

New York offers a number of sales tax exemptions to New York sales taxes. Here’s a list of some of the exemptions on sales tax in New York:

• Services are generally exempt, unless specifically taxable
• Certain groceries
• Menstrual hygiene products
• Newspapers and periodicals
• College textbooks
• Over-the-counter and prescription drugs and medicines
• Medical equipment and supplies, unless sold for use in providing medical or similar services for compensation
• Certain clothing and footwear sold for less than $110 per item (may be subject to local taxes)
• Property or services used in farming and horse boarding

New York also provides exemption certificates to certain types of organizations like government entities or non-profits.

Learn more about New York tax exemptions.

When do I need to collect sales tax in NY?

Remote sellers might have to register to collect sales taxes in New York if you meet certain criteria. This depends on if your business activities achieve New York sales tax nexus.

There are two ways to reach New York nexus:

New York physical nexus

New York nexus can be achieved through certain types of physical presence in the State of New York. More info below on what kind of activities might achieve New York physical nexus.

New York economic nexus

New York economic nexus is achieved when an ecommerce out-of-state seller generates $500,000 in eligible sales and more than 100 transactions to New York customers in a year in the state.

What is New York’s physical nexus threshold?

Certain business activities create physical nexus in New York. If you have physical nexus, you are required to collect and remit sales tax on all taxable sales that are shipped to New York.

Examples of business activities that can create physical nexus in New York include:

• Owning an office or place of business in New York
• Having employees in New York
• Having goods or inventory in New York
• Owning other tangible personal property in New York
• Delivering merchandise into New York in taxpayer-owned vehicles

Learn more about physical nexus in New York.

What is the New York economic nexus threshold?

New York recognizes economic nexus for any vendor with gross receipts from sales of tangible personal property delivered into New York exceeding $500,000 and more than 100 sales of tangible personal property delivered into New York in the previous four quarters.

• Sales of both taxable and exempt property must be included
• Sales you make through a marketplace are also included in calculating the thresholds
• Once you have established economic nexus, you will be obligated to register within 30 days and collect sales tax from buyers in New York 20 days thereafter

Learn more about economic nexus and New York sales tax registration.

How does New York nexus work with marketplaces?

New York nexus works similarly for marketplaces in that they have to also achieve $500,000 in gross sales and over 100 transactions to qualify for economic nexus. Here are key factors that influence New York economic nexus when marketplaces are involved:

A marketplace facilitator must collect and remit taxes on behalf of marketplace sellers.
Marketplace sellers are required to collect sales tax on sales not taxed by the marketplace facilitator if they cross the economic nexus threshold.
Sales made in a marketplace count towards a business’ economic nexus threshold.

Learn more about marketplaces and New York sales tax registration.

Selling online in New York?

Find New York nexus rules complicated? TaxCloud helps businesses just like yours remain sales tax compliant in New York. We’ll help you keep track of all your New York sales tax data, track your progress towards your New York sales tax nexus, and help you register for a New York sales tax permit when you achieve it. Then, we’ll help you charge the proper amount and file your New York sales taxes accurately every time.

Contact us to get started.

Are there New York sales tax holidays?

There are no annual New York sales tax holidays and no special New York sales tax holidays planned in 2024.

Is New York a member of the SST (Streamlined Sales Tax)?

Currently, New York is not a full or associate member of the Streamlined Sales Tax Governing Board (SSTGB).

How do I register for a sales tax permit in New York?

Have you met the New York sales tax nexus?

It’s time to register for your New York sales tax permit. The first thing you need to do is get your Certificate of Authority. This gives you the right to collect tax and accept New York state sales tax exemption certificates. It takes about 5 days to receive your Certificate of Authority but it’s recommended to apply at least 20 days in advance.

Here are the steps for registering:

• Gather all the information you’ll need about your business to apply. Here’s a helpful application checklist to use.
• Create a NY.gov Business account.
• Use New York Business Express to apply for a Certificate of Authority.

Learn more about New York sales tax registration.