New York Sales Tax Guide

New York General Sales Tax Information:

Sales Tax Registration Information for New York

Businesses that have a physical presence in New York need to register for a sales tax permit with the New York State Department of Taxation and Finance (NYSDTF). Additionally, sellers that do not have a physical presence but meet the economic nexus threshold of $500,000 and 100 transactions in the immediately preceding four sales tax quarters must collect and remit sales tax. The sales tax quarters in New York are March 1 through May 31, June 1 through August 31, September 1 through November 30, and December 1 through February 28/29. Businesses that cross the economic nexus threshold must register for a sales tax permit within 30 days and must collect/remit within 50 days.

• New York’s Economic Nexus Threshold  for Sales Tax
• Do You Need to Get a Sales Tax Permit in New York?
• How to Register for a Sales Tax Permit in New York?

Businesses can register for a Sales Tax Certificate of Authority online through the New York Department of Taxation and Finance Business Express portal. The registration process requires basic business information that can be reviewed in this checklist here. 

• How to File and Pay Sales Tax in New York?
  

What Products are Subject to Sales Tax in New York?

Per the NYSDTF website, sales and use tax is applied to tangible personal property (unless specifically exempt), select services, food and beverages sold by restaurants, hotel occupancy, and certain admission charges and dues. 

Is Clothing Taxable in New York?

Clothing and footwear sold for less than $110 per item or pair are exempt from the New York state sales tax per Tax Bulletin ST-122. Items used to make or repair clothing are also considered exempt. It is important to note that the exemption does not apply to local sales and use taxes unless the county or city imposing the taxes provides the exemption. Publication 718-C provides a list of local jurisdictions that do or do not provide the clothing exemption. 

Is CBD Taxable in New York?

CBD is generally taxable in New York as it is considered tangible personal property by the NYSDTF. CBD is generally legal to buy, sell, and possess. Effective June 1, 2024, adult-use cannabis products have a tax rate of 9%. Before registering with the Tax Department and beginning doing business, retailers must apply for a license with the Office of Cannabis Management. Find out more information regarding adult-use cannabis product taxes here. 

• CBD Sales Tax State-by-State Guide: Which States Require Sales Tax on Cannabidiol (CBD)?

Are Dietary Supplements Taxable in New York?

Dietary supplements are generally exempt from sales tax in New York according to Tax Bulletin. The bulletin states that a product is exempt from sales tax if it qualifies as a dietary food or health supplement, regardless of the form in which it is sold.

Are Digital Products Taxable in New York?

Digital products are generally exempt in New York as they do not constitute the sale of tangible personal property because the products are not delivered to the customer in a tangible format per NYSD TF TSB-A-20(18)S and Tax Law §1105(a).

Are Diapers Taxable in New York?

Diapers intended for human use are fully exempt from sales tax in New York per Senate Bill S8033A effective December 1, 2022. This includes, but is not limited to, disposable, reusable, adult, and children’s diapers per Chapter 386 of the Laws of 2022; Tax Law § 1115(a)(30-a)].

Are Feminine Hygiene Products Taxable in New York?
Feminine hygiene products, referred to as menstrual products, are exempt in New York effective September 1, 2016 per Chapter 650 of the Laws of 2023; Tax Law § 1115(a)(3-a).

Is Food Taxable in New York?

Food and beverages are generally exempt in New York. Exempt food includes food products, dietary foods, health supplements, and certain beverages. In order to be exempt from sales tax, food must meet the following conditions:

• it must be sold for human consumption;
• it must be sold unheated; and
• it must be sold in the same form and condition, quantities, and packaging as is commonly used by retail food stores.

Are Leases and Rentals Taxable in New York?

Leases and rentals of tangible personal property are generally taxable in New York unless an exemption applies. Tax Bulletin ST-740 outlines taxable and exempt property and services. 

• Which States Charge Sales Tax on Rentals and Leases?

Is SaaS Taxable in New York?

SaaS varies in taxability in New York. Per the NYSDTF, prewritten computer software is considered tangible personal property. Therefore, prewritten computer software is taxable whether sold on a physical item, by electronic transmission, or by remote access. However, custom software is exempt from tax if it is designed and developed to the specifications of the purchaser. Tax Bulletin ST-128 outlines the specifications on taxable and exempt computer software.

• Is SaaS taxable in New York?

Are Services Taxable in New York?
Services are generally exempt from sales tax in New York unless they are specifically taxable per Tax Bulletin ST-740. This quick reference guide provides examples of exempt and taxable services.

Are Shipping & Handling Charges Taxable in New York?

The taxability of shipping and handling charges generally follow the taxability of the item per Tax Bulletin ST-838. When a taxable product or service is sold, any charges for shipping and handling are subject to sales tax. When an exempt product or service is sold, any charges for shipping and handling are also exempt from sales tax. When taxable and nontaxable products or services are combined into one sale, the entire sale, including any shipping and handling charges, are taxable.

Are Medical Products Taxable in New York?

Medical products are generally exempt from sales tax in New York unless the items are sold for use in providing medical or similar services for compensation. Sales of medical products to ​​physicians, dentists, hospitals, clinical laboratories, and so forth are subject to tax. Publication 822 provides additional information and a list of exempt medical products.

Sales Tax Audit Risk in New York

What Are the Chances of an Audit in New York for Sales Tax?

The FL NYSDTF does not provide the statistics on sales tax audits. However, they do outline how businesses are selected for audits. This includes, but is not limited to, failure to file a return, failure to report income or sales, excessive credits, results of prior audits, and misuse of exemption certificates. 

What Are the Penalties of Not Paying Sales Tax in New York?

Failing to file and remit sales tax can result in various civil and/or criminal consequences. The NYSDTF Tax Bulletin ST-805 outlines the penalties and interest for failing to file, failing to collect tax, and failing to pay tax. Criminal penalties can result in fines and a jail sentence depending on the severity of the offense. 

• What Are the Penalties for Not Paying Sales Tax?