New York’s sales tax rate is 4 percent. In addition to the state sales and use tax rate, the state allows local jurisdictions to collect a discretionary tax. New York also has several additional taxes, including a tobacco tax and a marijuana tax.
This guide does not fully describe all of New York’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the New York Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
Types of taxes
New York has several taxes that businesses must collect, including a sales and use tax, tobacco tax and marijuana tax.
Sales and use tax
New York’s sales tax rate is 4 percent. The state levies the tax on most tangible personal property and some services. The use tax works in conjunction with the sales tax. If a business purchases taxable items and stores or uses them instead of selling them, it must pay the use tax on those items. The use tax rate is also 4 percent.
Lodging (Hotel room occupancy tax)
New York charges sales tax on lodging establishments, including:
- Hotels
- Motels
- Inns
- Bed and breakfast establishments
- Apartment hotels
- Ski lodges
- Certain bungalows
- Certain condos
- Certain cottages
- Certain cabins
If the rental charge or room rate is $2 or less per day, the rental is exempt from sales taxes.
Lodging establishments in New York City must collect and pay a hotel unit fee of $1.50 per unit per day. The hotelier must list the fee separately as it is not subject to state and local sales taxes.
Some local jurisdictions have a bed tax on top of the sales taxes. This tax must appear as a separate charge on the customer’s receipt. Businesses can locate the bed tax rate through the local taxing jurisdiction. New York State does not administer bed taxes. Additionally, bed taxes are not subject to sales taxes.
Separate charges, such as television and telephone services, are taxable.
If a resident stays in a hotel for 90 or more consecutive days, that person is considered a permanent resident. The lodging establishment should not charge sales tax on those stays. The exception is New York City. To be considered a permanent resident in lodging establishments in New York City, the resident has to stay 180 or more consecutive days.
The resident does not have to make reservations for the number of days. Instead, the lodging establishment charges sales tax until the 90th (or 180th) day; and then it can stop charging sales tax.
Vehicle rentals
New York levies two special taxes on vehicle rentals. These are in addition to the state and local sales taxes. Passenger car rentals incur a statewide special tax of 6 percent, plus a special supplemental tax of 6 percent, for a total of 12 percent on top of the sales tax.
The Metropolitan Commuter Transportation District (MCTD), which includes New York City and Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Winchester Counties, also have the same special tax rate.
To determine the tax rate for your local jurisdiction, add the state sales tax rate of 4 percent, the business’s local jurisdiction’s tax rate, plus the two special tax rates of 12 percent. For example, Dutchess County has a local tax of 4.125 percent. The total tax is 4 plus 4.125 plus 6 plus 6 for a total tax of 20.125 percent.
Marijuana excise tax
Retailers must pay a marijuana excise tax of 7 percent (pg. 100) on medical marijuana and 9 percent (id., pg. 105) on adult-use marijuana.
Food and beverage tax
New York does not have a separate food and beverage tax for restaurants. However, any establishment that sells “restaurant-type” food must charge state and local sales taxes on their products.
Liquor tax
New York levies a liquor tax on those who import liquor to sell or for personal use. The taxes are varied per type of liquor and are as follows:
- Liquor and wine containing more than 24 percent alcohol by volume: $1.70 per liter.
- Liquor containing more than 2 percent, but not more than 24 percent alcohol by volume: $0.67 per liter.
- Wine that contains 24 percent alcohol by volume or less: $0.30 per gallon.
- Beer: $0.14 per gallon.
- Cider: $0.0379 per gallon.
In addition to the state tax on liquor containing more than 24 percent alcohol by volume, New York City has an additional tax of $0.264 per liter. New York City also has an additional tax on beer of $0.12 per gallon.
Tobacco tax
In addition to the sales tax on cigarettes and other tobacco products, New York levies an excise tax on cigarettes and tobacco products as follows:
- The state excise tax is $4.35 per pack of 20 cigarettes.
- The New York City excise tax is $1.50 per pack of 20 cigarettes for a combined excise tax of $5.85.
- Cigars and tobacco products: 75 percent of the wholesale price (except snuff and little cigars).
- $4.35 for 20 little cigars.
- $2 per container of snuff of 1 ounce or less.
- $2 per ounce of snuff, plus a proportionate rate on fractional amounts for containers containing more than 1 ounce. For example, the tax on a container containing 1.25 ounces of snuff would be $2.50.
- Vapor products: 20 percent supplemental sales tax on retail sales.
Discretionary taxes (Local tax rates)
In addition to the state sales and use tax, local jurisdictions have an additional tax. Thus, some customers might pay three different sales and use taxes. For example, Allegany County has a 4.5 percent tax on top of the state’s 4 percent tax. The Bronx is located in Allegany County, and it has an additional tax of 4.875 percent. Thus, a business located in the Bronx must collect 13.375 percent in sales taxes.
To determine which taxes you must collect, you can use a cheat sheet or enter your address. The cheat sheet adds the local tax to the state tax. Thus, it shows that Allegany County has an 8.5 percent tax. Of that, 4 percent is the state’s sales tax rate.
Registering for and filing New York's taxes
Anyone who sells taxable tangible personal property or services must register for a sales tax account. Sellers include those who sell from home, are temporary vendors, and even those who sell once per year.
Before you register, make sure you have the following:
- NY.gov business account.
- Form DTF-17.1, Business Contact, and Responsible Person Questionnaire.
- Instructions for the application.
- Reason for applying, whether starting a new business, updating sales tax account, the business organization changed, purchasing an existing business, restarting a prior business or adding a location.
- The contact information for the business, including the business name, federal employer ID number, phone number, business address, and email address.
- Type of entity, for example, corporation, limited liability company, sole proprietorship, partnership, or limited liability partnership.
- Date that the business will begin selling tangible personal property or taxable services.
- The business bank account information, including the routing number and account number.
- Pertinent license numbers, e.g., New York State Lottery, New York State Liquor Authority, New York State Department of Motor Vehicles.
- The business’s tax preparer’s information, including the address, phone number, and FEIN.
- Business contacts’ and responsible persons’ contact information, ownership information, and profit distribution percentage.
Due dates for New York’s sales taxes
Businesses can file annually if they collect $3,000 or less in taxes throughout the year. If the taxes you collect are less than $300,000 during a quarter, you can file quarterly. If you collect $300,000 or more during a quarter, you must file monthly.
If you collect over $500,000 during a year, you might have to participate in PrompTax, which means that you pay tax electronically on an accelerated payment schedule and file a quarterly return to reconcile all payments for the previous quarter.
Any business’s filing frequency can change. New York’s Department of Revenue automatically uploads the correct forms into your account if your filing frequency changes.
A business must submit its return and remit payment within 20 days from the end of the period. However, annual filers have until March 20 of the next year to file.
New York sales tax holiday
While New York does not have an official sales tax holiday, clothing and footwear items that cost less than $110 are always tax-free in New York State. However, local sales taxes apply except in the following counties:
- Chautauqua
- Chenango
- Columbia
- Delaware
- Greene
- Hamilton
- Tioga
- Wayne
New York sales tax exemptions
In addition to certain nonprofits and government entities that are exempt from paying sales tax, the following products are exempt:
- Food and food products.
- Dietary foods.
- Health supplements for human consumption.
- Certain beverages.
- Drugs and medicines for internal or external use.
- Clothing and footwear under $110.
- Medical equipment and supplies for personal use.
- Prosthetic aids.
- Hearing aids.
- Eyeglasses.
- Laundry and dry cleaning services.
- Magazines, newspapers, and other periodicals.
- Any tangible personal property sold by a gift shop that is located in a veterans’ home.
- Shoe repair.
- Licensed veterinarian services.
Remote and marketplace sellers
New York does not require remote and marketplace sellers to collect sales taxes for the sales they make to New York residents. However, New York residents must pay use taxes at the state and local rates if they do not pay sales tax for taxable tangible personal property at the time of purchase.
In most cases, remote and marketplace sellers register for a New York sales tax account and collect sales tax as a convenience to their customers.
FAQs
The state’s sales tax rate is 4 percent. The use tax rate is the same. Several counties also have additional local sales tax rates.
You can complete the sales tax exemption certificates by hand or electronically. New York has several different exemption certificates, depending on the type of business. Most businesses need Form ST-120 to purchase taxable items for resale.
A business taxpayer will have to check the state’s laws. Some states require you to collect taxes, while others do not require you to collect taxes until you meet $100,000 in sales or 200 or more transactions for the year. However, buyers must file a use tax return if your business does not charge sales tax at the time of the sale.
Yes. Once you register for an account, you must file a sales tax return even if you do not have taxable sales of tangible personal property.
