New York Sales Tax Rates

Total Range for 2024

4%–8.875%

new york state department of taxation and finance

Nexus in New York

If you’re selling goods and services in New York, to determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.  New York has both physical nexus and economic nexus rules:

  • Physical Nexus: Having a physical presence in New York, like an office, warehouse, or employees in the state, triggers this type. If you do, you likely need to collect sales tax.
  • Economic Nexus: This kicks in when your sales within New York exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

In New York, the economic nexus threshold is $100,000 or more of gross sales from deliveries of tangible personal property or services to locations within New York State during the previous twelve months.

Why do you need to collect sales tax in New York?

There are two main reasons why a business might need to collect sales tax in New York:

  1. Supporting Vital Government Services: Sales tax serves as a crucial revenue stream for both the state and local governments in New York. This funding is indispensable for essential services like law enforcement, firefighting, road upkeep, and public education. By collecting sales tax, businesses with a significant presence (nexus) in New York help sustain these vital services.
  2. Ensuring Fair Competition among Businesses: Sales tax collection promotes fair competition among businesses operating within New York. Without it, out-of-state vendors could gain an unfair advantage over local businesses by not collecting sales tax. Sales tax guarantees that all businesses selling similar products or services in New York contribute equitably to the state and local tax base.

Is what you’re selling taxable in New York?

In New York, sales tax applies to most tangible personal property, certain specified digital products, and some services. Here’s a breakdown to help you determine if your product or service is taxable:

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How to Register for Sales Tax in New York

If you’ve determined you need to collect sales tax in New York, registering for a Sales Tax Certificate is the next step. Here’s how you can do it:

  1. Online Registration:

The New York Department of Taxation and Finance (NYSDTF) recommends online registration through their Business Registration System (https://www.tax.ny.gov/). It’s generally faster and more convenient. Here’s what you’ll need:

  1. Business name and address
  2. Contact information
  3. Federal Employer Identification Number (EIN)
  4. Business activity start date
  5. Projected monthly sales and taxable sales
  6. Products or services offered
  1. Paper Application:

If online registration isn’t an option, you can also apply for a Sales Tax Certificate by mail using a paper application (Form CA-1).

  • Download the New York Certificate of Authority application (Form CA-1) from the NYSDTF website.
  • Complete the form following the instructions provided.
  • Mail the completed application form along with any required documentation to the address listed on the form.

Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.

Additional Notes:

  • You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability.
  • Once your application is approved, you’ll receive a Sales Tax Certificate with your registration number. You’ll need this number to collect and report sales tax.

For more detailed information and specific instructions, contact sales tax experts like Yonda Tax or visit the New York Department of Taxation and Finance website.

How to Collect Sales Tax in New York

Once you’ve registered for a Sales Tax Certificate in New York, here’s what you need to know about collecting sales tax:

  1. Determine the Sales Tax Rate:

The sales tax rate in New York is a combination of a statewide base rate and potential additional local rates.  The base rate is currently 4%. However, many counties, cities, and special districts in New York impose additional local sales taxes on top of the base rate.

You can find the specific sales tax rate for the location where your business is located or where you’re delivering goods/services by using the New York Department of Taxation and Finance’s Sales Tax Map.

  1. Apply the Right Sales Tax Rate:
  • Once you know the applicable tax rate, simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.
  • Example: If you sell a product for $100 in a location with a combined sales tax rate of 8.875% (4% base rate + 4.875% local rate), the sales tax amount would be $8.88 (100 x 8.875%). You would collect $108.88 ($100 + $8.88) from the customer.
  1. Keep Good Records:
  • It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the state.
  1. Report and Remit Sales Tax:
  • New York businesses are required to file sales tax returns and remit the collected tax on a regular basis. The specific filing frequency depends on your business’s total sales tax liability.
  • Generally, businesses with lower sales tax liability will file quarterly, while those with higher liability may need to file monthly.

You can find detailed information on sales tax filing deadlines and remittance procedures on the New York Department of Taxation and Finance website or by contacting them directly.

Additional Tips:

  • Consider hiring a sales tax wingman to take care of calculations, filing, and remittance, saving you time and ensuring accuracy.
  • Stay informed: Sales tax laws and regulations can change, so stay updated on any changes that might affect your business.

FAQs

How often do you need to file sales tax returns in New York?

The frequency of filing sales tax returns in New York depends on your business’s total sales tax liability.  The New York Department of Taxation and Finance (NYSDTF) categorizes filers into different filing frequencies based on their projected sales tax liability.

  • Generally, businesses with lower sales tax liability will file quarterly.
  • Businesses with higher liability may need to file monthly.
Do you need a seller/reseller permit?

In New York, a seller’s permit is called a Sales Tax Certificate. Yes, you’ll need to register for a Sales Tax Certificate to collect sales tax in New York. You can find instructions on registering for a Sales Tax Certificate in the “How to Register for Sales Tax in New York” section above.

When are New York's Returns Due?
  • If you file sales tax returns on a monthly basis, they are due on the 20th of the month following the reporting month.
  • Quarterly filers must submit their sales tax returns by the 20th of the month following the end of the reporting quarter.
  • Yearly filers have until March 20 of the following year to submit their sales tax returns.
Are there any exceptions to the sales tax on digital products?

There are limited exceptions for certain digital products in New York. Here’s a quick breakdown:

  • Taxable: Downloaded digital products like ebooks, audiobooks, and music downloads purchased for personal use are subject to sales tax in New York.
  • Non-Taxable: Certain services related to digital products, like separately charged subscriptions to streaming services or online gaming platforms, may not be taxable.

Contact Yonda Tax Today

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