Yes, New York has a sales tax. The state charges a base rate of 4% on most retail purchases, and counties, cities, and a regional transit surcharge push the combined New York sales tax to somewhere between 7% and 8.875%, depending on where you buy. New York City sits at the top of that range; most of the rest of the state falls below it.
What Rate You Actually Pay
The 4% state portion is uniform everywhere in New York. What varies is what gets added on top.
Counties and cities set their own local sales tax rates, and those add directly to the state’s 4%. On top of that, a 0.375% surcharge applies throughout the Metropolitan Commuter Transportation District, which covers the five New York City boroughs plus Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties.1Department of Taxation and Finance. Find Sales Tax Rates
In New York City the math works out this way: 4% state + 4.5% city + 0.375% MCTD = 8.875%.2NYC Department of Finance. Business NYS Sales Tax That’s the highest combined rate in the state. Outside the city, combined rates typically land between 7% and 8.75% depending on the county.
What’s Taxable
Nearly all retail purchases of physical goods are taxable. Electronics, furniture, appliances, sporting goods, and similar items are taxed at the combined rate for the place of sale.
Several services are taxable too. Labor to install, repair, or maintain physical property is taxed along with any parts. Hotel and motel rooms are taxable, often with additional local hotel taxes layered on.2NYC Department of Finance. Business NYS Sales Tax Information services — collecting, compiling, or analyzing data and furnishing reports — are taxable, which covers things like credit reporting and many online data services.3New York State Department of Taxation and Finance. Sales and Compensating Use Tax Treatment of Certain Information Services Utilities like electricity, gas, and telephone service are generally taxable for commercial users; residential energy drops the state’s 4% portion to 0%, though local tax may still apply.4Cornell Law School. NY Comp Codes R and Regs Tit 20 527.13 – Certain Energy Sources and Services
Software and SaaS
New York treats prewritten software as taxable tangible personal property no matter how you receive it. A boxed disc, a download, and remote cloud access (Software as a Service) are all taxed the same way.5Department of Taxation and Finance. Computer Software Custom software written for a single customer is generally exempt, but off-the-shelf programs are taxable even if you never touch a physical copy.
What’s Exempt
Groceries and Unprepared Food
Most food sold for home preparation is exempt: fruits, vegetables, dairy, meat, bread, canned goods, frozen dinners, and shelf snacks like chips and pretzels. Dietary supplements and vitamins are exempt too.6Department of Taxation and Finance. Listings of Taxable and Exempt Foods and Beverages Sold by Food Stores and Similar Establishments
The exemption stops at prepared food. Hot pizza, rotisserie chicken, hot soup, salad-bar selections, and anything plated or arranged by the seller to eat on the spot are taxable. Restaurant and coffee shop meals are taxable whether you eat in or take out.7Department of Taxation and Finance. Food and Food Products Sold by Food Stores and Similar Establishments Candy, soft drinks, and alcohol are also taxable even when bought at a grocery store.6Department of Taxation and Finance. Listings of Taxable and Exempt Foods and Beverages Sold by Food Stores and Similar Establishments
Medicine and Medical Equipment
Drugs and medicines used to treat, cure, or prevent illness in humans are exempt whether or not they require a prescription. Medical equipment, prosthetic aids, hearing aids, eyeglasses, and artificial devices are also exempt.8New York State Senate. New York Tax Law 1115 – Exemptions From Sales and Use Taxes
Clothing and Footwear Under $110
Clothing and footwear priced below $110 per item or per pair are exempt from the state’s 4%.9New York State Department of Taxation and Finance. Changes in Sales Tax Clothing Exemption Whether you also skip the local portion depends on where you shop. Some localities (including some within the MCTD) have adopted the same exemption, in which case the MCTD surcharge drops off as well; others have not, so you’ll still see local tax on a $40 pair of jeans even though the state portion is zero.10Department of Taxation and Finance. Lists of Exempt and Taxable Clothing, Footwear, and Items Used to Make or Repair Exempt Clothing Price the item at $110 or more and the full combined rate applies.
Buying From Out of State
Bringing a purchase into New York doesn’t let you skip the tax. If you buy something from an out-of-state retailer that doesn’t charge New York tax — a common situation with some online sellers and most in-person purchases while traveling — you owe compensating use tax at the combined rate for wherever you’ll use the item.1Department of Taxation and Finance. Find Sales Tax Rates
If you already paid sales tax to another state on the same purchase, you may qualify for a reciprocal credit against your New York use tax. The credit isn’t automatic: it applies only when the other state would offer the same courtesy to a New York resident buying there, you have proof of payment, you were legally required to pay it, and you have no right to a refund from that state. Pay less than New York’s rate and you owe the difference; pay the same or more and nothing is due, but New York won’t refund the excess. Federal excise taxes and customs duties don’t count toward the credit.11Department of Taxation and Finance. Reciprocal Credit for Sales or Use Taxes Paid to Other Taxing Jurisdictions
Online Sellers and Marketplaces
Sellers based outside New York have to collect New York sales tax once they cross both of two thresholds in the previous four sales tax quarters: more than $500,000 in gross receipts from sales of tangible personal property delivered in New York, and more than 100 such sales.12New York State Senate. New York Tax Law 1134 – Registration Both have to be met. Non-taxable sales, wholesale transactions, and sales made through a marketplace all count toward the calculation. Once both are crossed, registration is required within 30 days.13New York State Senate. New York Tax Law 1101 – Definitions
If you sell through a platform like Amazon or Etsy, the marketplace itself is generally responsible for collecting and remitting the tax on tangible goods delivered to New York addresses. The marketplace has to register once it has a physical presence here or crosses the same $500,000 and 100-sale thresholds. The marketplace rule covers tangible personal property only; it doesn’t extend to hotel bookings, ride-share, restaurant meals, or car rentals arranged through a platform. And even when the marketplace collects on your behalf, those sales still count toward your own nexus calculation.14Department of Taxation and Finance. Sales Tax Requirements for Marketplace Providers
Running a Business: Registration and Filing
Any business making taxable sales in New York has to register with the Department of Taxation and Finance at least 20 days before the first sale and get a Certificate of Authority. The certificate has to be displayed at the place of business. Selling without one is illegal.15Department of Taxation and Finance. How to Register for New York State Sales Tax
Filing frequency depends on volume:
- Annual: sales tax owed is $3,000 or less for the annual filing period.
- Quarterly: taxable receipts under $300,000 in the previous quarter, if not an annual filer.
- Monthly: taxable receipts reach $300,000 or more in any quarter — monthly filing begins the first month after that quarter.
Businesses with annual sales tax liability above $500,000 generally have to use PrompTax, an accelerated electronic payment program.16Department of Taxation and Finance. Filing Requirements for Sales and Use Tax Returns
Late filing or payment carries a 10% penalty on the tax due for the first month, plus 1% for each additional month, capped at 30%. If a return isn’t filed within 60 days of the due date, the minimum penalty is the lesser of $100 or 100% of the tax owed.17Cornell Law School. NY Comp Codes R and Regs Tit 20 536.1 – Penalties Interest runs on unpaid tax at 14.5% per year, compounded daily, as of early 2026.18Department of Taxation and Finance. Interest Rates 1/01/2026 – 3/31/2026