Welcome to 1StopVAT’s New York sales tax guide. After reading this guide, you will be able to determine if you must register for sales tax in New York (NY) permit and know how much sales tax in New York your company should charge even if you are a remote seller. In case you don’t find answers to your tax-related questions here, consult with the 1StopVAT team by clicking here.
New York sales and use tax is a consumption tax that falls on the final customer of a good or service. The sales tax is charged at the moment of sale and must be filed to the New York State Department of Taxation and Finance.
The total New York sales tax rates consist of a general sales tax rate and specific, local rates that can more than double the sales tax amount.
Both New York-based and out-of-state companies might be required to collect and charge the correct New York sales tax percentage.
Complementary to the sales tax, the use tax must be remitted whenever a business consumes goods purchased outside the state. Both sales and use tax New York are submitted to the New York State Department of Taxation and Finance.
When should you take action to become a New York state sales tax collector?
If you have a physical presence in New York state, you are most likely required to become a sales tax collector. However, even if you are based out of state, there are certain cases when you need to get a sales tax permit and charge the correct New York state sales tax rate from your customers. These scenarios are called having a nexus in the state. Please find more about the New York tax sales nexus below.
As mentioned previously, a physical nexus occurs when you have an office, property, or employee in the state.
If your operations in New York are remote, then economic nexus will apply. The first type of economic nexus is based on revenue. It is established once you make more than $300 000 in the last 12 months selling to New York-based customers or complete more than 100 transactions in the state.
Other types of nexus are the following:
▶ Affiliate. If an affiliate uses your trademark in New York or helps your business develop a market in the state, you must start collecting sales tax for New York.
▶ Click-through. If a New York-based representative facilitates your sales via a link and the resulting sales price reaches $10 000, you are considered to have a nexus with the state.
▶ Trade shows. New York sales tax rate should be charged on the sales that you make during trade shows or exhibitions in the state.
Are all goods and services taxable in New York?
Not all goods and services should include sales tax rates New York in their prices. In New York, non-prepared food items and medical supplies are tax-free. Among other exemptions are fuel and equipment for manufacturing, U.S and N.Y flags, commercial aircraft, and other property. More information about taxable and non-taxable items is published on the New York State Department of Taxation and Finance website.
Services are generally sales tax-exempt, with a handful of exceptions highlighted on the NY tax authority’s website.
A New York sales tax permit is called a Certificate of Authority and is issued by the New York State License Center free of charge. You can register for New York sales tax online or by visiting one of the organization‘s field offices. For the registration, you will have to submit your personal and business details.
To calculate what’s the sales tax in New York that you must charge, you will have to look up both the general sales tax rate in New York and the sales tax rate New York City and various districts have implemented. To figure out how much is the sales tax in New York is applicable quickly, use our sales tax calculator
The statewide sales tax rate in New York currently is 4 percent. However, there are special local and district sales taxes that can add up to 4.875 percent, making the maximum sales tax rate go up to 8.875 percent.
If you’re having trouble figuring out what is the sales tax rate in New York that you should add to your goods or services, please reach out to our team of experts for an in-depth consultation.
Sales tax reporting
Based on the size of your businesses, the New York State Department of Taxation and Finance will assign the frequency of sales tax filing. Typically, sales tax can be filed monthly, quarterly, and annually on the 20th day of the month following each reporting period.