New York state sales tax guide

This guide covers New York state sales and use taxes, administered by the New York Department of Taxation and Finance. New York charges a 4% state rate, with local rates bringing the total to 7%–8.875%. Businesses must register for a Certificate of Authority once they have nexus, including economic nexus of over $500,000 in sales and 100+ transactions into the state. After registering, they must collect, file, and remit tax on taxable goods and certain services. New York uses destination-based sourcing, and shipping and handling charges are generally taxable when associated with taxable items.

Sales tax is a tax paid to a governing body (state or local) on the sale of certain goods and services. New York first imposed a general state sales tax in 1965. The New York state base sales and use tax rate remains at 4% as of November 7, 2025. The state rate is combined with varying local taxes to form the total tax rate paid by consumers. Local jurisdictions in New York impose additional sales taxes that range from 0% to 4.875%, depending on the county or city. Special district taxes — such as the Metropolitan Commuter Transportation District (MCTD) surcharge — may also apply in certain areas. As a result, combined state and local sales tax rates range from 4% to 8.875%, depending on the delivery location. In New York City, the combined rate is 8.875%, which includes the 4% state rate, 4.5% city rate, and 0.375% MCTD surcharge.

As a business owner selling taxable goods or services, you act as an agent of the state of New York by collecting tax from purchasers and passing it along to the appropriate tax authority. The New York State Department of Taxation and Finance administers sales and use tax in New York. The department continues to administer all sales and use tax matters as of November 7, 2025.

Any sales tax collected from customers belongs to the state of New York, not you. It’s your responsibility to manage the taxes you collect to remain in compliance with state and local laws. Failure to do so can lead to penalties and interest charges.

Use tax is similar to sales tax, but applied where goods are consumed rather then where purchased. As an example, consider materials purchased tax free by a construction company. Should the company choose to consume those materials for their own purposes such as upgrading an office, use tax would be due on the materials used.

To summarize, use tax is due when goods are purchased tax free by a merchant and then converted for use, consumption, or enjoyment by that same merchant.

When do businesses need to collect New York sales tax?

In New York, sales tax is levied on the sale of tangible goods and some services. The tax is collected by the seller and remitted to state tax authorities. The seller acts as a de facto tax collector.

To help you determine whether you need to collect sales tax in New York, start by answering these three questions:

1. Do you have nexus in New York?
2. Are you selling taxable goods or services to New York residents?
3. Are your buyers required to pay sales tax?

If the answer to all three questions is yes, you’re required to register with the state tax authority, collect the correct amount of sales tax per sale, file returns, and remit to the state.

The impact of failing to collect New York sales tax

If you meet the criteria for collecting sales tax and choose not to, you’ll be held responsible for the tax due, plus applicable penalties and interest.

It’s extremely important to set up tax collection at the point of sale — it’s near impossible to collect sales tax from customers after a transaction is complete.

The need to collect sales tax in New York is predicated on having a significant connection with the state. This is a concept known as nexus. Nexus is a Latin word that means "to bind or tie," and it’s the deciding factor for whether the state has the legal authority to require your business to collect, file, and remit sales tax.

The expanding scope of sales tax nexus in New York

Sales tax nexus in New York state used to be limited to physical presence: The state tax authority could require a business to register, collect and remit sales tax only if it had a physical presence in the New York, such as employees or an office, a retail store, or a warehouse.

In June 2018, the Supreme Court of the United States overruled the physical presence rule with its decision in South Dakota v. Wayfair, Inc. All states are now free to tax businesses based on their economic and virtual connections to the state, or economic nexus.

This decision has had an important impact on out-of-state and online sellers as they are no longer required to have a physical presence in New York in order to trigger nexus.

Sales tax considerations for out-of-state sellers

If you have sales tax nexus in New York, you’re required to register with the New York Department of Taxation and Finance and to charge, collect, and remit the appropriate tax to the state. Out-of-state sellers with no physical presence in a state may establish sales tax nexus in the following ways:

• Affiliate nexus: Having ties to businesses or affiliates in New York. This includes, but isn’t limited to, the design and development of tangible personal property (goods) sold by the remote retailer, or solicitation of sales of goods on behalf of the retailer. More details on affiliate nexus in New York.
• Click-through nexus: Having an agreement to reward a person(s) in New York for directly or indirectly referring potential purchasers of goods through an internet link, website, or otherwise, and:
  • The total cumulative sales price from such referrals is more than $10,000 during the preceding four quarterly sales tax periods.
• Economic nexus: As a result of the June 21, 2018 Wayfair ruling, any business that meets the economic nexus threshold criteria listed below during the preceding four sales tax quarters "is required to register as a vendor immediately" and collect, file, and remit sales tax to the New York Department of Revenue:
  • The remote seller's gross receipts from sales of tangible personal property delivered into New York exceeds $300,000; and
  • The remote seller made retail sales for delivery into New York in 100 or more separate transactions.
• Inventory in the state: Storing property for sale in New York. This includes merchandise owned by Fulfillment by Amazon (FBA) merchants and stored in a warehouse located in New York but owned or operated by Amazon. As of November 2018, remote vendors do not have sales tax nexus if their only tie to New York is inventory in a warehouse owned by a third party.
• Trade shows: You may be liable for collecting and remitting New York use tax on orders taken or sales made during conventions or trade shows in the state. If you sell taxable items at an event in New York only once a year, you’re required to collect and remit sales tax. However, mere attendance at a convention or trade show, without making sales or taking orders for taxable goods, generally doesn’t trigger sales tax nexus.

For more information, see Registration requirement for businesses with no physical presence in New York State, New York Tax Law § 1101(b)(8),Do I Need to Register for Sales Tax?, and Publication 750, A Guide to Sales Tax in New York State.

Trailing nexus

Sales tax nexus can linger even after a retailer ceases the activities that caused it to be “engaged in business” in the state. This is known as trailing nexus. As of November 2018, New York does not have an explicitly defined trailing nexus policy. 

Fulfillment by Amazon (FBA)

If you’re an active Amazon seller and you use Fulfillment by Amazon (FBA), you need to know where your inventory is stored and if its presence in New York will trigger nexus. FBA sellers can also download an Inventory Event Detail Report from Amazon Seller Central to identify inventory stored in New York.

If you sell taxable goods to New York residents and have inventory stored in the state, you likely have nexus and an obligation to collect and remit tax. To begin to understand your unique nexus obligations, check out our free economic nexus tool or consult with a trusted tax advisor.

Sourcing sales tax: understanding which tax rate to apply

In some states, sales tax rates, rules, and regulations are based on the location of the seller and the origin of the sale (origin-based sourcing). In others, sales tax is based on the location of the buyer and the destination of the sale (destination-based sourcing).

New York generally uses destination-based sourcing. In New York, the sales tax rate is generally determined by the point of delivery, which is where ownership and/or possession of the item is transferred by the seller to the purchaser. For services, the rate is based on where the service is delivered, or where the property on which the service is performed is delivered.

For additional information, see the New York Department of Taxation and Finance.

After determining you have sales tax nexus in New York, you need to register with the proper state authority and collect, file, and remit sales tax to the state. We get a lot of questions about this and recognize it may be the most difficult hurdle for businesses to overcome. Avalara Licensing can help you obtain your New York business license and sales tax registration.

How to register as a sales tax vendor in New York

You can register for a New York Sales Tax Certificate of Authority online through the New York Department of Taxation and Finance. To apply, you’ll need to provide certain information about your business, including but not limited to:

• Business name, address, and contact information
• Federal EIN number
• Date business activities began or will begin
• Projected monthly sales
• Projected monthly taxable sales
• Products to be sold

Cost of registering for a New York seller's permit

There is currently no cost to register for a seller's permit in New York.

Acquiring a registered business

You must register with the New York Department of Taxation and Finance if you acquire an existing business in New York. The state requires all registered businesses to have the current business owner’s name and contact information on file.

Streamlined Sales Tax (SST)

The Streamlined Sales and Use Tax Agreement (SSUTA), or Streamlined Sales Tax (SST), is an effort by multiple states to simplify the administration and cost of sales and use tax for remote sellers. Remote sellers can register in multiple states at the same time through the Streamlined Sales Tax Registration System (SSTRS).

As of November 2018, New York is not an SST member state.

Once you've successfully registered to collect New York sales tax, you'll need to apply the correct rate to all taxable sales, remit sales tax, file timely returns with the New York Department of Taxation and Finance, and keep excellent records. Here’s what you need to know to keep everything organized and in check.

How you collect New York sales tax is influenced by how you sell your goods:

• Brick-and-mortar store: Have a physical store? Brick-and-mortar point-of-sale solutions allow users to set the sales tax rate associated with the store location. New tax groups can then be created to allow for specific product tax rules.
• Hosted store: Hosted store solutions like Shopify and Squarespace offer integrated sales tax rate determination and collection. Hosted stores offer sellers a dashboard environment where New York sales tax collection can be managed.
• Marketplace: Marketplaces like Amazon and Etsy offer integrated sales tax rate determination and collection, usually for a fee. As with hosted stores, you can set things up from your seller dashboard and let your marketplace provider do most of the heavy lifting.
• Mobile point of sale: Mobile point-of-sale systems like Square rely on GPS to determine sale location. The appropriate tax rate is then determined and applied to the order. Specific tax rules can be set within the system to allow for specific product tax rules.

New York sales tax collection can be automated to make your life much easier. Avalara AvaTax seamlessly integrates with the business systems you already use to deliver sales and use tax calculations in real time.

Tax-exempt goods

Some goods are exempt from sales tax under New York law. Examples include most non-prepared food items, food stamps, and medical supplies.

We recommend businesses review the laws and rules put forth by the New York Department of Taxation and Finance to stay up to date on which goods are taxable and which are exempt, and under what conditions.

Some customers are exempt from paying sales tax under New York law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale.

Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction.

Misplacing a sales tax exemption/resale certificate

New York sales tax exemption and resale certificates are worth far more than the paper they’re written on. If you’re audited and cannot validate an exempt transaction, the New York Department of Taxation and Finance may hold you responsible for the uncollected sales tax. In some cases, late fees and interest will be applied and can result in large, unexpected bills.

New York sales tax holidays

Sales tax holidays exempt specific products from sales and use tax for a limited period, usually a weekend or a week. Approximately 17 states offer sales tax holidays every year. New York started the sales tax holiday trend back in 1997, but it no longer offers temporary sales tax holidays. Instead, it provides a year-round state sales tax exemption for clothing and footwear sold for less than $110.

You're registered with the New York Department of Taxation and Finance and you've begun collecting sales tax. Remember, those tax dollars don't belong to you. As an agent of the state of New York, your role is that of intermediary to transfer tax dollars from consumers to the tax authorities.

How to file a New York sales tax return

Once you’ve collected sales tax, you’re required to remit it to the New York Department of Taxation and Finance by a certain date. The New York Department of Taxation and Finance will then distribute it appropriately.

Filing a New York sales tax return is a two-step process comprised of submitting the required sales data (filing a return) and remitting the collected tax dollars (if any) to the New York Department of Taxation and Finance. The filing process forces you to detail your total sales in the state, the amount of sales tax collected, and the location of each sale.

Online filing is generally recommended, but paper returns are acceptable.

Sales tax filing frequency

The New York Department of Taxation and Finance will assign you a filing frequency. Typically, this is determined by the size or sales volume of your business. State governments generally ask larger businesses to file more frequently. See the filing due dates section for more information.

New York sales tax returns and payments must be remitted at the same time; both have the same due date.

Filing New York sales tax returns online

You may file directly with the New York Department of Taxation and Finance by visiting their site and entering your transaction data manually. This is a free service, but preparing New York sales tax returns can be time-consuming — especially for larger sellers.

Using a third party to file returns

To save time and avoid costly errors, many businesses outsource their sales and use tax filing to an accountant, bookkeeper, or sales tax automation company like Avalara. This is a normal business practice that can save business owners time and help them steer clear of costly mistakes due to inexperience and a lack of deep knowledge about Missouri sales tax code.

Filing when your business has collected no sales tax

New York State Sales Tax Certificate of Authority holders must file returns at the completion of each assigned collection period regardless of whether sales tax was collected. When no sales tax was collected, certificate holders must file a zero return. 

Failure to submit a zero return to New York state results in penalties and interest charges. The New York State Department of Taxation and Finance assesses a $50 penalty for failure to file a zero sales tax return by the due date. 

Closing a business

The New York State Department of Taxation and Finance requires all businesses to close their books by filing a final sales tax return. Business owners selling or transferring ownership of their business in New York must also file a final sales tax return. 

Timely sales tax filing discount

The New York State Department of Taxation and Finance offers a vendor discount (also known as a dealer collection allowance) for timely filing of sales and use tax returns. The vendor discount equals 5% of the New York sales tax due, with a maximum of $200 per quarter and a minimum of $0. The vendor discount applies to timely filed returns with tax due.

It's important to know the due dates associated with the filing frequency assigned to your business by the New York Department of Taxation and Finance. This way you'll be prepared and can plan accordingly. Failure to file by the assigned date can lead to late fines and interest charges.

The New York State Department of Taxation and Finance requires all sales tax filings to be completed by the 20th of the month following the assigned filing period. The department assigns filing frequencies — part-quarterly (monthly), quarterly, or yearly — based on reported sales tax or anticipated taxable sales at the time of registration. Due dates falling on a Saturday, Sunday, or legal holiday are extended to the next business day. 

Annual filers must file New York sales tax returns on March 20 of the year following the end of the annual period. Annual filers use Form ST-101 for New York state filing returns. The annual period runs from March 1 through February 28 or February 29. 

Quarterly filers must file New York sales tax returns on the 20th of the month following the end of the reporting quarter. Quarterly filers use Form ST-100 for filing New York state sales tax returns.

Monthly filers must file New York sales tax returns on the 20th of the month following the reporting month. Monthly New York filers use Form ST-809 for filing returns. 

Note: If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day.

Late filing of New York sales tax returns results in penalties and interest charges. The New York State Department of Taxation and Finance assesses penalties based on the amount of tax due and the length of the delay. Interest accrues on unpaid tax from the due date until the date of payment.The New York State Department of Taxation and Finance may grant extensions when sales tax filing deadlines are missed due to circumstances beyond the taxpayer’s control, such as weather or accidents. Taxpayers must provide evidence supporting extension requests. Hopefully you don't need to worry about this section because you're filing and remitting New York sales tax on time and without incident. However, in the real world, mistakes happen.If you miss a sales tax filing deadline, follow the saying, "better late than never," and file your return as soon as possible. Failure to file returns and remit collected tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest.

Registered businesses that collect no sales tax in New York but fail to file a zero return incur a penalty of $50. The penalty applies even when no tax is due if the return is not filed by the due date.Returns filed late by 60 days or less incur penalties calculated as 10% of the tax due for the first month, plus 1% for each additional month or part of a month, not to exceed 30% of the tax due. The minimum penalty for a late-filed return with tax due is $50.

Returns filed late by more than 60 days incur penalties equal to the greater of:

• 10% of the tax due for the first month, plus 1% for each additional month or part of a month, not to exceed 30% of the tax due;
• $100, or 100% of the amount required to be shown as tax on the return, whichever is less; or $50.

New York returns filed on time without payment of sales tax due incur a penalty of 10% of the tax due for the first month, plus 1% for each additional month or part of a month, not to exceed 30%. Omissions of more than 25% of taxes required to be shown on the sales tax return result in a penalty of 10% of the tax not reported. Fraudulent failure to pay tax due results in a penalty equal to twice the amount of tax not paid, plus interest on the unpaid tax at the greater of 14.5% or the rate set by the Tax Commissioner. Interest rates change quarterly. For the period July 1, 2025, through September 30, 2025, the interest rate is 14.5% per annum, compounded daily.

Source: New York Department of Taxation and Finance - Interest Rates: 7/1/2025–9/30/2025

Note: You may be subject to fines and a jail sentence if you fail to make, render, sign, certify, or file any return or report. You may be subject to fines and a jail sentence if you willfully fail to deposit taxes in a financial institution as required or fail to remit the state and local taxes collected.

Business acquirers should contact the New York State Department of Taxation and Finance to inquire about the status of potential acquisitions. Business purchasers become responsible for all outstanding New York sales and use tax liability after purchase completion. 

Because New York has one of the largest populations in the Union, most businesses have customers in the Empire State. If you’re collecting sales tax from New York residents, you’ll need to consider how to handle taxes on shipping and handling charges.

Taxable and exempt shipping charges in New York

New York sales tax applies to shipping, delivery, freight, handling, and postage charges under certain conditions. Vendors’ billing shipping and handling charges to customers must collect tax on these charges when the underlying sale is taxable, whether the charges are combined or separately stated on the invoice. Vendors billing shipping and handling charges to customers do not collect tax on these charges when the underlying sale is exempt, whether the charges are combined or separately stated. 

Vendors charging a single delivery charge for both taxable and nontaxable property or services must treat the entire charge as taxable. Vendors separately stating taxable and nontaxable charges on a bill and separately stating and allocating delivery charges between taxable and nontaxable sales may treat the delivery charge for taxable goods as taxable and the delivery charge for exempt goods as exempt. 

Customers arranging delivery by third parties and paying those parties directly do not incur sales tax on third-party delivery charges, even when the delivered items are taxable. Third-party delivery charges paid directly to third parties are not subject to sales tax. 

There are exceptions to almost every rule with sales tax, and the same is true for shipping and handling charges. Specific questions on shipping in New York and sales tax should be taken directly to a tax professional familiar with New York tax laws.

For additional information, see New York State Department of Taxation and Finance - Products, services, and transactions subject to sales tax.