The current sales tax rate in New York City

New York City's combined sales tax rate is 8.875%. This rate combines the New York State sales tax of 4%, the Metropolitan Transportation Authority tax of 0.375%, and the New York City sales tax of 4.5%. The rate applies to most retail purchases within the five boroughs: Manhattan, Brooklyn, Queens, the Bronx, and Staten Island.

The 8.875% rate has been in place since 2010. It is one of the highest sales tax rates in the United States, though it is not the highest. The rate applies uniformly across all five boroughs, so you pay the same tax whether you shop in Manhattan or Staten Island.

Key Takeaways

  • New York City's sales tax is 8.875%, made up of state tax (4%), city tax (4.5%), and a transportation tax (0.375%).
  • Most tangible goods are taxed, but groceries, prescription medications, and some clothing items under $110 are exempt.
  • Restaurant meals, prepared foods, and takeout are taxed at the full 8.875% rate, even if you eat at home.
  • The tax rate is the same in all five boroughs and does not change based on neighborhood or district.
  • Services like haircuts, repairs, and professional fees are generally not subject to sales tax in New York.

What is and is not subject to sales tax in New York City

Most items you buy in stores are taxed at 8.875%. This includes clothing, electronics, furniture, books, toys, and household goods. However, several categories are exempt. Groceries—including bread, milk, vegetables, and meat—are not taxed. Prescription medications and medical devices are also exempt. Clothing and footwear under $110 per item are exempt, but items priced at $110 or more are taxed.

Restaurant meals and prepared foods are taxed, even if you take them home. This includes pizza, sandwiches from a deli counter, rotisserie chicken, and coffee. However, unprepared groceries—like raw chicken you cook yourself or a loaf of bread from the bakery section—are not taxed. The distinction is whether the food is ready to eat or requires preparation at home.

Services are generally not taxed. A haircut, dental work, car repair, plumbing, or accounting service does not have sales tax added. However, if you buy a product as part of that service—like a bottle of shampoo at a salon—that product may be taxed depending on how the business categorizes it.

How the tax breaks down by component

The 8.875% rate consists of three separate taxes that stack on top of each other. The New York State sales tax is 4%, which applies statewide. The New York City sales tax is 4.5%, which applies only within the city limits. The Metropolitan Transportation Authority surcharge is 0.375%, which funds public transit and applies in the MTA region, which includes New York City and surrounding counties.

When you see a price tag in a store, the displayed price does not include any of these taxes. The tax is calculated and added at checkout. On a $100 purchase, you pay $8.88 in tax, for a total of $108.88. On a $50 purchase, you pay $4.44 in tax, for a total of $54.44.

Sales tax on online and out-of-state purchases

If you order something online from a retailer that has a physical location in New York State, or that meets certain sales thresholds, the retailer must collect New York sales tax at checkout. This applies whether the retailer is based in New York or elsewhere. The tax rate charged is based on the delivery address, so if you have it shipped to a New York City address, you pay 8.875%.

If you order from a retailer with no physical presence in New York and below the sales threshold, the retailer may not collect tax at checkout. However, New York State requires residents to pay "use tax" on such purchases—which is the same rate as sales tax. In practice, most individuals do not pay use tax on personal purchases, though it is technically owed.

Tax-free shopping periods in New York

New York State holds a sales tax holiday in early September, typically lasting one week. During this period, most clothing and footwear items under $110 are exempt from sales tax, even though they normally would not be taxed anyway. Items over $110 are still taxed. The exact dates change each year and are announced by the New York Department of Taxation and Finance.

This holiday does not apply to items already exempt from tax, such as groceries or prescription medications. It also does not apply to prepared foods or restaurant meals. The holiday is primarily a marketing event, since most clothing under $110 is already tax-free year-round.

Where to find the official tax rate and rules

The New York Department of Taxation and Finance maintains the official sales tax information for the state and city. Their website lists current rates, exemptions, and rules for specific product categories. The New York City Department of Finance also publishes guidance on how the city portion of the tax works.

If you are unsure whether a specific item is taxed, you can contact the Department of Taxation and Finance directly or check their online database. Retailers are required to know the tax status of what they sell, so asking a store employee is also a reasonable approach, though their answer may not always be accurate.

Frequently Asked Questions

Is clothing always tax-free in New York City?

Clothing and footwear under $110 per item are tax-free. Items priced at $110 or more are taxed at 8.875%. The price is determined by the item's individual price tag, not the total purchase. A $105 shirt and a $115 shirt in the same transaction are taxed differently.

Do I pay sales tax on groceries?

No. Unprepared groceries like produce, meat, dairy, bread, and canned goods are not taxed. However, prepared foods from a deli counter, hot foods, and restaurant meals are taxed at the full rate, even if you take them home to eat.

What about tax on services like haircuts or repairs?

Services themselves are not subject to sales tax in New York. A haircut, car repair, plumbing job, or medical visit has no sales tax. If the service includes a product—like a bottle of shampoo at a salon—that product may be taxed separately.

Do I pay New York City sales tax if I live outside the city but shop there?

Yes. The sales tax rate is based on where the purchase is made, not where you live. If you buy something in a New York City store, you pay 8.875% regardless of your home address. If you order online and have it shipped to an out-of-state address, you typically do not pay New York tax.

Why is the sales tax rate so high in New York City?

The rate combines three taxes: the state sales tax (4%), the city sales tax (4.5%), and the MTA surcharge (0.375%). The city and state taxes fund general government services, while the MTA surcharge funds public transportation. The combined rate reflects decades of tax increases to fund these services.