NYC sales tax is 8.875 percent on most goods and some services

New York City charges 8.875 percent sales tax on purchases. This rate is made up of three layers: New York State's base rate of 4 percent, New York City's local rate of 4.5 percent, and a small additional tax of 0.375 percent that funds the Metropolitan Transportation Authority (MTA). When you buy something in a store or online and it ships to an NYC address, you pay all three.

The 8.875 percent applies to clothing, electronics, furniture, and most other goods. It also applies to certain services — restaurant meals, haircuts, dry cleaning, and hotel rooms all carry the full rate. Some items are taxed at a lower rate or not taxed at all, which is covered in the sections below.

The tax is added at the point of sale. If a price tag says $10, you pay $10.89 at checkout (rounded to the nearest cent). Online retailers must collect and send this tax to New York State if they have a physical presence in the state or meet certain sales thresholds.

Key Takeaways

  • NYC sales tax is 8.875 percent on most items, made up of state, city, and MTA portions.
  • Clothing under $110 per item is not taxed, but accessories and footwear are taxed regardless of price.
  • Groceries, prescription medications, and certain medical equipment are not taxed.
  • Restaurant meals, prepared foods, and takeout are taxed at the full 8.875 percent rate.
  • Tax rates can vary slightly in surrounding counties, so purchases just outside the city may have different costs.

What is and is not taxed in New York City

Clothing is the most common exception. A single piece of clothing or footwear that costs less than $110 is not taxed. This means a $50 shirt is tax-free, but a $150 coat is taxed on the full amount. Accessories — belts, scarves, hats, gloves, and jewelry — are always taxed, even if they cost under $110.

Food and medicine have their own rules. Groceries you buy at a supermarket to cook at home are not taxed. This includes bread, milk, vegetables, meat, and frozen foods. But prepared foods — rotisserie chicken, deli sandwiches, items from a salad bar, or anything heated for sale — are taxed. Restaurant meals, whether you eat in or take out, are taxed at 8.875 percent. Prescription medications are not taxed, but over-the-counter drugs and vitamins are.

Medical equipment used by people with disabilities is often not taxed. This includes wheelchairs, walkers, hearing aids, and oxygen equipment. Diabetic supplies like test strips and lancets are not taxed. If you are unsure whether a specific medical item is taxed, ask the retailer or check the receipt — the tax line will show zero if the item qualifies.

How the three layers of NYC sales tax work

New York State collects 4 percent on all taxable sales statewide. This money goes to the state general fund. New York City adds 4.5 percent on top of that for city services. The MTA adds 0.375 percent specifically to fund public transportation — buses, subways, and commuter rail.

These three rates are combined into a single 8.875 percent charge. You do not see them broken out separately on most receipts. The retailer collects the full amount and sends it to the state, which distributes portions to the city and MTA according to law.

If you buy something in a different New York county — say, Westchester or Nassau — the rate will be lower because those areas do not have the city and MTA portions. Westchester County is 8.375 percent, and Nassau County is 8.875 percent (Nassau has its own MTA portion). This is why some people drive outside the city to make large purchases, though the difference is usually small.

Sales tax on services in NYC

Services are taxed differently than goods. Most services are not taxed in New York, but certain ones are. The main taxed services are: restaurant meals and food delivery, hotel rooms, haircuts and salon services, dry cleaning and laundry, parking, and taxi or car service rides (including Uber and Lyft).

A haircut is taxed at 8.875 percent. If you pay $50 for a cut, you pay $4.44 in tax. A massage or spa service is also taxed. However, services like plumbing, electrical work, or home repair are generally not taxed — you pay the contractor's fee with no sales tax added.

Food delivery through apps like DoorDash or Grubhub is taxed on the food portion. The delivery fee itself is not taxed, but the meal is. If you order a $20 sandwich for delivery, you pay 8.875 percent tax on the $20, plus the delivery fee with no tax.

Who collects and where the money goes

The retailer or service provider collects sales tax from you at the point of sale. They hold that money and send it to New York State's Department of Taxation and Finance, usually monthly or quarterly depending on their sales volume. The state then distributes the money: 4 percent stays with the state, 4.5 percent goes to New York City, and 0.375 percent goes to the MTA.

The city uses its portion for schools, police, sanitation, and other services. The MTA uses its portion for operating and maintaining the subway, bus, and commuter rail systems. If a retailer does not collect or send the tax, the state can audit them and impose penalties.

Online purchases and sales tax

Online retailers must collect New York sales tax if they ship to an NYC address. This applies whether the retailer is based in New York or anywhere else in the country. Amazon, Walmart, Target, and most major online stores collect and remit NYC sales tax on orders shipped to the city.

Small online sellers may not collect tax if they fall below certain sales thresholds, though this is rare for established businesses. If you buy from a small seller who does not collect tax, you may technically owe "use tax" to New York State — a tax on items you bought out of state and brought into the state. In practice, use tax is rarely enforced on individual purchases, but it is the law.

Digital goods — e-books, music downloads, software, and streaming subscriptions — are generally not taxed in New York. A Kindle book or Spotify subscription has no sales tax added.

Frequently Asked Questions

Do I pay sales tax on clothing under $110?

No, a single piece of clothing or footwear under $110 is not taxed. But if the item costs $110 or more, the full price is taxed. Accessories like belts, scarves, and jewelry are always taxed, regardless of price.

Is takeout food taxed the same as restaurant dining?

Yes. Takeout, delivery, and eating in a restaurant are all taxed at 8.875 percent. The only food that is not taxed is groceries you buy at a supermarket to cook at home.

Why is the tax rate 8.875 percent and not a round number?

The rate is 8.875 percent because it combines three separate taxes: 4 percent state, 4.5 percent city, and 0.375 percent MTA. Each was set at different times for different purposes, so the combined rate is not a round number.

Do I owe sales tax on items I buy online from out-of-state sellers?

Most major online retailers collect NYC sales tax automatically when you ship to an NYC address. If a small seller does not collect it, you technically owe use tax to New York State, though it is rarely enforced on individual purchases.

Are prescription medications taxed?

No. Prescription medications are not taxed in New York. Over-the-counter drugs, vitamins, and supplements are taxed at 8.875 percent.