How 2023 Sales Tax are calculated in New York

The state general sales tax rate of New York is 4%. In addition to the state-level sales tax, cities and municipalities in New York have the authority to levy their own sales tax rates. These local rates can add up to 4.75%, resulting in a combined maximum sales tax rate of 8.875% in certain regions.

Every 2023 combined rates mentioned above are the results of New York state rate (4%), the county rate (0% to 4.75%), the New York cities rate (0% to 4.75%), and in some case, special rate (0% to 0.375%).

Overview of New York Sales and Use Tax

History

New York's sales and use tax system has been in place since 1965, with its introduction aimed at generating state revenue and creating fair competition between in-state and out-of-state vendors. Over time, the system has evolved to address economic demands, and its structure includes multiple layers of taxation at the state, county, and city levels.

Sales Tax in New York

New York imposes sales tax on the retail sale of tangible personal property and certain services. The tax is typically collected by the seller, who acts as an agent for the state. If the seller fails to collect tax, the purchaser may be responsible for paying it directly.

Use Tax in New York

The use tax complements the sales tax by applying to purchases made outside New York State where no sales tax was collected. Consumers are required to pay use tax when they bring taxable goods or services into the state. This ensures that in-state vendors are not unfairly disadvantaged by out-of-state sellers who do not collect tax.

The use tax is similar to the sales tax and applies to goods and certain services used, stored, or consumed within the state.

Taxation of Products and Services

In addition to goods, various services are taxable under New York's tax laws, including:

• Services to tangible personal property (e.g., repairs or installation).
• Telecommunications services.
• Hotel and motel accommodations.
• Certain digital products, such as software and streaming services.

There are also exemptions, such as for clothing under $110, food purchased for home consumption, and specific medical products.

When to Collect Sales and Use Tax

Businesses are required to collect sales tax at the point of sale for taxable items. If a purchaser buys goods outside of New York and no sales tax is paid, they must pay use tax when the goods are brought into the state. Sellers must be registered with the state to collect tax if they have business nexus with New York - meaning they conduct business in or make sales to residents of the state.

Historical Sales Tax Rates

Here's a summary of the state-level historical sales tax rates in New York:

For more details, please refer to the official New York Sate Department of Taxation and Finance.

New York state rate(s) for 2023

Lowest possible rate: 4% (e.g., Pleasantville, New York)
Other common rates: 7% .7.5%, 8%, 8.125%, 8.25%, 8.375%, 8.5%, 8.625%, 8.75%,
Highest possible rate: 8.875% (New York City, New York)
Average combined rate across New York: 7.982%

Other 2023 sales tax Facts for New York