New York City charges sales tax on most goods and some services you buy

Sales tax in New York City is a tax added to your purchase at the register. The total rate is 8.875%, made up of a New York State tax (4%), a New York City tax (4.5%), and a Metropolitan Transportation Authority tax (0.375%). This means if you buy something for $100, you pay $108.88 at checkout.

The tax applies to most physical items — clothing, food from restaurants, electronics, furniture. It does not apply to groceries you take home to cook, prescription medications, or most services like haircuts or car repairs. Some items fall into gray areas that change based on how you buy them or what they are used for.

You see sales tax charged at the point of sale in stores, restaurants, and online retailers that have a physical presence in New York. Mail-order and out-of-state online sellers may or may not charge it depending on their business structure, though New York State has been expanding which sellers must collect it.

Key Takeaways

  • New York City's combined sales tax rate is 8.875%, split between state, city, and transit authority taxes.
  • Groceries, prescription drugs, and most services are not taxed, but restaurant meals and prepared foods are.
  • Clothing under $110 per item is not taxed in New York State, but items over that threshold are.
  • Online sellers based outside New York may not charge sales tax, though the rules have changed in recent years.

What gets taxed and what does not

Groceries you buy at a supermarket to cook at home are not taxed. This includes bread, milk, vegetables, meat, and canned goods. But if you buy a prepared salad from the deli counter, a rotisserie chicken, or a sandwich, that is taxed as prepared food. The difference is whether the store prepared it or you will prepare it at home.

Clothing and footwear under $110 per item are not taxed in New York State. A $100 shirt is tax-free. A $150 coat is taxed. Accessories like belts, hats, and scarves are taxed regardless of price. Clothing for animals is also taxed.

Restaurant meals, coffee, and beverages are always taxed. Takeout pizza, a coffee from a café, a sandwich from a deli — all taxed. Alcohol is taxed at the regular rate plus an additional excise tax in some cases.

Services like haircuts, plumbing, electrical work, and car repairs are generally not taxed. Medical services and prescription medications are not taxed. Gym memberships and personal training are not taxed. But if you buy a product at a salon — shampoo, a hair product — that product is taxed.

How the tax breaks down by source

The 8.875% rate is not one single tax. It is three separate taxes stacked on top of each other. New York State charges 4%. New York City adds 4.5%. The Metropolitan Transportation Authority (MTA) adds 0.375% to fund public transit.

All three are collected at the register and sent to their respective agencies. You do not pay them separately — the cashier or online checkout shows one total. But understanding the breakdown matters if you are reading about tax changes, because sometimes one part changes while the others stay the same.

Some counties outside New York City have lower rates because they do not have the MTA tax. If you buy something in Westchester or Long Island, the rate is lower. But within the five boroughs, you always pay the full 8.875%.

Online purchases and out-of-state sellers

If you order from Amazon, Walmart, or another major online retailer, they charge New York sales tax at checkout because they have warehouses or offices in New York. The tax appears in your order total before you pay.

Small online sellers or sellers based entirely outside New York may not charge sales tax. This does not mean the purchase is tax-free — New York State says you owe "use tax" on items you bring into the state, but most people do not pay it. The burden is on you to report it, and most do not.

New York has been expanding which online sellers must collect tax. As of recent years, more out-of-state sellers are required to collect it even if they have no physical presence in the state. The rules change periodically, so if you notice a seller not charging tax, it may change the next time you order.

Tax on specific items you might wonder about

Clothing: Not taxed if under $110 per item. Taxed if over $110. Accessories like belts, scarves, and hats are always taxed.

Food: Groceries not taxed. Restaurant meals, prepared foods, and takeout taxed. Candy and soda are taxed even in grocery stores.

Medications: Prescription medications not taxed. Over-the-counter medications like pain relievers and cold medicine are taxed.

Books and newspapers: Not taxed.

Household items: Taxed. Cleaning supplies, paper towels, light bulbs — all taxed.

Furniture and appliances: Taxed.

Digital goods: Downloaded software, e-books, and streaming services are generally taxed, though the rules vary by type of service.

Who collects the tax and where it goes

Businesses that sell taxable items are responsible for collecting sales tax from customers and sending it to New York State. The state then distributes portions to New York City and the MTA. Businesses file sales tax returns monthly or quarterly depending on their size.

If a business does not collect or does not send in the tax, the state can audit them and impose penalties. Customers are not responsible for enforcement — the seller is supposed to charge it and remit it.

The tax revenue funds state and city services. The MTA portion specifically funds subways, buses, and commuter rail. City tax revenue goes to general city services.

Frequently Asked Questions

Do I pay sales tax on online orders shipped to New York?

If the seller has a physical presence in New York or meets certain sales thresholds, they charge sales tax at checkout. If they do not, tax is usually not charged, though New York State considers it your responsibility to pay use tax. Most people do not.

Is clothing always tax-free in New York?

No. Clothing under $110 per item is tax-free. Anything over $110 is taxed. Accessories like hats, belts, and scarves are taxed at any price. Clothing for animals is also taxed.

Why is prepared food taxed but groceries are not?

New York State taxes prepared and ready-to-eat food as a luxury item, but not raw groceries meant for home cooking. A rotisserie chicken from a deli is taxed. Raw chicken from the butcher counter is not.

Do I pay sales tax on services like haircuts or plumbing?

No. Most personal services are not taxed in New York. But if you buy a product at the salon — shampoo or a styling product — that product is taxed.

What if a store does not charge me sales tax?

Report it to the store. They are required to charge it on taxable items. If they consistently do not, you can report them to the New York State Department of Taxation and Finance, though enforcement is the state's job, not yours.