What Is NYC Sales Tax?
The combined sales tax in New York City is 8.875%, and it is made of three parts.
The combined sales tax rate in New York City is 8.875%. It applies to most goods and some services sold in all five boroughs: Manhattan, Brooklyn, Queens, the Bronx and Staten Island. On a $100 taxable purchase, you pay $8.875 in tax, which stores round to $8.88 or so on the receipt.
The rate is the same across the city. It does not change by borough or neighborhood.
How the 8.875% is built
The total is the sum of three separate taxes:
| Part | Rate |
|---|---|
| New York State sales tax | 4% |
| New York City sales tax | 4.5% |
| Metropolitan Commuter Transportation District (MCTD) surcharge | 0.375% |
| Total | 8.875% |
The MCTD surcharge is a small add-on that applies in the New York City area and helps fund regional transit. The state and city parts are the bulk of the bill.
What the tax applies to
Sales tax in New York applies to the sale of most tangible goods, such as electronics, furniture, household items and many other things you can carry out of a store. It also applies to certain services. Business owners and shoppers often get surprised here, because only some services are taxable.
Examples of things that are commonly taxed:
- Restaurant meals, takeout and prepared food
- Alcoholic drinks served at bars and restaurants
- Most retail goods
- Some services, such as certain repair and installation work on taxable goods
The rules for services are detailed. If you run a business and are not sure whether your service is taxable, check with the New York State Department of Taxation and Finance. The state agency sets the rules and collects the tax.
What is usually exempt
Some purchases are not taxed, or are taxed at a lower level. Common examples:
- Most grocery food. Basic food you buy to cook at home is generally exempt. Food that is prepared, heated or served for immediate eating is generally taxable. That is why a bag of rice has no tax but a hot sandwich does.
- Prescription drugs and many other medical items.
- Clothing and footwear under a set price per item. New York City has a long-standing exemption for lower-priced clothing and shoes. The price limit and the exact parts of the tax that are waived have changed over time, so check the current rule on the state website before you rely on it.
- Purchases by exempt organizations, such as qualifying nonprofits, when they provide the proper exemption paperwork to the seller.
A seller cannot just skip the tax because you ask. An exempt buyer normally has to give the seller a completed exemption certificate.
How to read the tax on your receipt
Most receipts show a single line called tax or sales tax. If the shop charged the full rate, the line should be close to 8.875% of the taxable subtotal.
- Find the subtotal for taxable items only.
- Multiply that number by 0.08875.
- Compare the result to the tax line.
If an order mixes taxable and exempt items, such as groceries and a household item, the tax should apply only to the taxable part. A small difference of a cent can come from rounding. A large gap is worth asking about.
Sales tax on online orders and delivery
Tax usually follows where the item is delivered. A taxable item shipped to an address in New York City is generally charged at the New York City rate. Many online sellers collect it for you at checkout. Shipping and delivery charges can also be taxable when the item itself is taxable, so you may see tax on a delivery fee.
If you run a business in NYC
A business that sells taxable goods or services must register with the state, collect the right tax from customers, and send it to the state on a schedule the state assigns. The tax you collect is not your money. Keep it separate from your income and keep good records.
Common mistakes include:
- Charging tax on exempt items, or skipping it on taxable ones
- Not collecting an exemption certificate when a customer claims exemption
- Mixing collected tax into daily spending money, then falling short on the filing date
- Assuming a service is not taxable without checking
A licensed accountant who works with New York businesses can help you set up your point-of-sale system with the right tax settings. That is usually cheaper than fixing mistakes after an audit notice.
Other taxes that are not sales tax
Some charges that look like taxes are separate. Hotel stays have their own taxes and fees on top of sales tax. Some items, such as certain tobacco and fuel products, have special excise taxes. If a bill looks higher than 8.875%, one of these may be the reason.
Where to check the current rules
Tax rules change. Before you make a big purchase decision or set up a business, confirm the current rate and exemptions with the state. The New York State Department of Taxation and Finance publishes sales tax rates, guides for businesses and lists of exempt items on its website.
If you are shopping for a local business that can help, such as an accountant, bookkeeper or retail shop, you can search the NYC business directory by category and neighborhood.
Next step
Ready to shop or hire? Search NYC businesses by neighborhood and category.
Search NYC businessesQuestions people ask
What is the sales tax rate in NYC?
The combined rate is 8.875%. It is made of 4% state tax, 4.5% city tax and a 0.375% MCTD surcharge.
Is the sales tax different in Brooklyn, Queens or Manhattan?
No. The rate is the same in all five boroughs.
Is food taxed in NYC?
Most basic grocery food is exempt. Prepared food, restaurant meals and takeout are generally taxable.
Is clothing taxed in NYC?
Lower-priced clothing and footwear have a long-standing exemption, but the price limit and details have changed over time. Check the current rule with the New York State Department of Taxation and Finance.
Who do I ask if I am not sure whether something is taxable?
Ask the New York State Department of Taxation and Finance, or a licensed accountant who works with New York businesses.