Sales Tax APIThe same engine Zamp customers use.In this guide, we’ll cover all you need to know about New York sales tax.
We’ll explore how you can calculate sales tax rates for counties and cities in New York and answer a few other common questions you might have.
We’ll also show you how to collect and file sales tax in New York. And if sales tax filing looks like a lot of work, we’ll also share a white glove sales tax solution to ensure you stay compliant throughout the entire sales tax lifecycle.
Collecting Sales Tax in New York
Here are the answers to some common questions you may have:
Do I have to Collect New York Sales Tax from Customers?
Retailers who meet these two requirements are required to collect sales tax in New York:
- Has sales tax nexus in New York
- Sells taxable products or services in New York
The New York Tax Department provides a handy guide on who should register for sales tax.
What Creates Sales Tax Nexus in New York?
Vendors selling goods and services in New York must register and collect sales tax from New York buyers.
Factors that create sales tax nexus include:
- Economic Nexus: When you sell goods worth $500,000 per year in gross revenue and make sales in more than 100 separate transactions in the last 4 quarters.
- Physical Location: When you have a warehouse, office, or distribution center.
- Employee Location: A company with employees or any other type of representation in New York should pay taxes.
- Affiliate Nexus: A taxable sale happens when an out-of-state business receives substantial sales from New York. They must register as a vendor and obtain a Certificate of Authority from the New York State Department of Taxation and Finance.
- Trade Shows: Participating in trade shows for more than 14 days and selling goods will create a sales nexus in New York.
- Tangible Personal Property: Sales of tangible personal property are subject to New York sales tax unless specifically exempt.
Do I Have to Collect Sales Tax from New York Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
No.
New York has a marketplace facilitator tax law, which means that marketplaces like Amazon and eBay are required to collect sales tax on behalf of 3rd party sellers on their platforms.
If you have a sales tax nexus in New York, keep in mind that you’re still required to collect sales tax on your other non-marketplace New York sales.
Taxable Products in New York
Most tangible personal property and services like raw materials, artistic items, and a few grocery items like soda, beer, candy, and bottled water are taxable.
However, like some other states, New York avoids imposing taxes on basic necessities like medical supplies and items purchased using food stamps.
Let’s take a closer look at how items are taxed in New York:
Are groceries taxable in New York?
Groceries like vegetables, dairy products, nuts, baby food, etc., are non-taxable in New York.
Is clothing taxable in New York?
Clothing and footwear sold under $110 are exempt from New York State and New York City sales tax. Some other counties also exempt clothing sold for under $110 from local sales tax, but others do not.
Are digital products taxable in New York?
Digital products are tax-exempt in New York.
Is Software-as-a-Service (SaaS) Taxable in New York?
SaaS is taxable in New York.
Are Services Taxable in New York?
Some services are taxable in New York.
They include:
- Parking
- Security
- Interior design
- Amusement admissions
- Hotels and lodging
- Storage
- Telephone answering services
- Protective and detective services
- Social and athletic clubs
- Some miscellaneous personal services
Read more about which services are taxable in New York.
Tax-exempt Items
Some tax-exempt items in New York are:
- Purchases by vendors that are intended for resale, like computer hardware for software development.
- Building or installing a capital improvement. A capital improvement is an addition or alteration that adds value to the real property and is intended to be a permanent installation. For example, air cleaners, heaters, installing kitchen cabinets, etc.
- Parking service receipts paid to a homeowners’ association by its members.
- Laundering, dry cleaning, tailoring, weaving, pressing, shoe repairing, and shoe shining.
- Food and drinks like dairy products, 70-100% non-carbonated natural beverages, unheated coffee and tea.
- Medicines, like antibiotics, birth control pills, and medical supplies, like hearing aids.
- Feminine hygiene products like sanitary pads and vaginal creams.
- Newspapers and periodicals. Periodicals should be published at least four times a year to qualify for sales tax exemption. They should also contain articles related to science, art, sports, etc., be available for public use, and shouldn’t constitute a book when the issues are put together.
- Property or services used in farming or commercial horseboarding, including fuel and utilities
- Sales by funeral homes.
- Commercial vessels, like cabs.
- Commercial aircraft, certain related property, and fuel. This includes general aviation aircraft and property and services related to their maintenance as well.
- Property and utilities used in research and development
- US, NY official flags and military service flags, prisoner of war flags, and blue star banners.
- Manufacturing of machinery, equipment, and fuel.
But to collect sales tax, you need a sales tax permit. Let’s find out how you can get one.
How to Register for a New York Seller’s Permit
You can register for a New York seller’s permit or sales tax permit online at the New York Business Express website.
Do I Need a New York seller’s Permit if I’m only a Wholesaler?
Yes, you must register for a New York seller’s permit even if you only sell products for resale and aren’t required to charge sales tax on those sales.
Do I Need a New York Seller’s Permit if I Only Sell Temporarily in the State?
Yes, vendors who only make sales in New York on a temporary basis are still required to register for a New York seller’s permit. Temporary vendors must indicate the start and end dates over which they will do business in the state.
How to Collect Sales Tax in New York
New York is a destination-based sales tax sourcing state.
This means that if you make taxable sales to buyers in New York, you are required to collect sales tax at the total combined sales tax rate of the buyer’s ship-to location.
Should You Collect Sales Tax on Shipping Charges in New York?
Yes, shipping charges are considered part of the taxable sale in New York and should be taxed.
Learn about sales tax on shipping in every US state here.
How to File and Pay Sales Tax in New York
When your sales tax filing due date approaches, you can file New York sales tax returns in multiple ways.
- File and pay online: Remit New York sales tax with New York Web File.
- File and pay through the Promptax program: If you have taxable receipts of more than $500,000 or have an annual liability for prepaid sales tax on motor fuel and diesel motor fuel exceeding $5 million, you may have to participate in the Promptax program. You’ll be notified by mail by the Tax Department if you’re eligible.
- File and pay by mail: You can also file by mailing in a paper form. You’ll need to choose the specific form for your filing frequency here. Further, New York requires that most filers file online.
- Let Zamp handle your New York sales tax so you never have to worry about a sales tax return again!
Next, let’s find answers to a few FAQs regarding New York sales taxes.
