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

New York City sales tax is a tax added to the price of items you buy. When you purchase something in New York City, the store adds tax to your bill at checkout. The total rate you pay depends on what you're buying and where you're buying it, because New York State, New York City, and sometimes your county all add their own portions to the tax.

As of 2024, the combined sales tax rate in New York City is 8.875 percent. This breaks down as 4 percent for New York State, 4.5 percent for New York City, and 0.375 percent for the Metropolitan Commuter Transportation District (MCTD). The rate is the same across all five boroughs — Manhattan, Brooklyn, Queens, the Bronx, and Staten Island.

Sales tax is collected by the store and sent to the New York Department of Taxation and Finance. You do not pay it separately; it is added to the price shown on the shelf or menu. Some items are taxed, and some are not, which can be confusing when you're shopping.

Key Takeaways

  • New York City's combined sales tax rate is 8.875 percent as of 2024, made up of state, city, and transportation district taxes.
  • Most goods are taxed, but unprepared food like groceries, bread, and milk are not taxed in New York.
  • Prepared food, restaurant meals, and takeout are taxed at the full rate, even if you eat at home.
  • Clothing and footwear under $110 are not taxed, but items over that price are taxed on the full amount.
  • The tax is collected by the store and included in your final bill; you cannot avoid it by paying cash or using a card.

What is and is not taxed in New York City

Groceries are not taxed in New York. This includes bread, milk, eggs, vegetables, fruit, meat, cheese, and other unprepared food you cook at home. The rule is simple: if you buy it raw or uncooked, there is no sales tax. Frozen vegetables and canned goods are also not taxed, as long as they are not prepared or ready to eat.

Prepared food is taxed. This includes restaurant meals, takeout, deli sandwiches, pizza by the slice, coffee, and anything sold hot or ready to eat. If a bakery sells a plain bagel, it is not taxed. If the same bakery sells a bagel with cream cheese already on it, that bagel is taxed. Soda and other drinks are taxed, but milk and milk-based drinks are not.

Clothing and footwear under $110 per item are not taxed. A shirt that costs $80 has no tax. A shirt that costs $120 is taxed on the full $120. Accessories like belts, hats, and scarves are taxed regardless of price. Shoes under $110 are not taxed; shoes over $110 are taxed on the full amount.

Most other goods are taxed: electronics, furniture, books, toys, household items, and personal care products all have sales tax added. Medicine and medical devices have different rules depending on whether they are over-the-counter or prescription, so ask the pharmacist if you are unsure.

Services that are and are not taxed

Most services in New York City are not taxed. Haircuts, dry cleaning, car repairs, plumbing, and home repairs do not have sales tax. Legal services, accounting, and consulting are not taxed. If you pay someone to provide a service, you usually do not pay sales tax on that service.

Some services are taxed. Hotel rooms are taxed at 14.75 percent in New York City (the regular 8.875 percent plus an additional 5.875 percent hotel tax). Parking garages and parking lots are taxed. Admission to entertainment venues like movies, concerts, and sporting events is taxed. Telecommunications services like cell phone bills and internet are taxed.

Delivery and shipping charges are sometimes taxed and sometimes not, depending on what is being delivered. If you order groceries for delivery, the groceries themselves are not taxed, but the delivery fee may be. Ask the store or service before you order if you want to know the exact amount.

When you pay sales tax and how it is calculated

You pay sales tax at the moment you buy something. The store calculates the tax based on the price of the item and adds it to your bill. If you buy a $10 item in New York City, the tax is $0.89 (10 times 0.08875), so your total is $10.89. If you buy multiple items, the store adds up the taxable items, calculates the tax on that total, and adds it to your bill.

The tax is the same whether you pay with cash, a credit card, or a debit card. You cannot avoid sales tax by choosing a payment method. Online purchases shipped to New York City are also taxed, though the rules for out-of-state sellers have changed in recent years. Most major online retailers now collect New York sales tax on orders shipped to addresses in the city.

Some stores show the price with tax included on the shelf label, but most show the price before tax. The final amount you pay at checkout will be higher than the price on the tag. This is why a $20 item costs about $21.78 after tax.

Tax-free shopping periods and exemptions

New York State holds a sales tax holiday in early September, usually for one week. During this period, most clothing and footwear under $110 are not taxed, and school supplies under $100 are not taxed. The exact dates change each year, so check the New York Department of Taxation and Finance website in August to confirm when the holiday falls.

Certain groups are exempt from paying sales tax on specific items. People who are blind or have low vision can buy certain devices without tax. Nonprofit organizations may not pay tax on items they buy for their operations, though they must provide proof of their nonprofit status. Farmers buying equipment for agricultural use may be exempt from tax on those purchases.

If you believe you should not have been charged sales tax on an item, you can contact the store and ask for a refund. Keep your receipt. If the store made a mistake, they can refund the tax. If you have a question about whether something should be taxed, call the New York Department of Taxation and Finance at 518-457-5181.

How sales tax affects your budget and shopping

Sales tax adds roughly 9 percent to the cost of most items you buy in New York City. This means a $100 purchase costs about $109. Over time, this adds up. If you spend $500 a month on taxable items, you pay about $45 in sales tax each month, or $540 per year.

Knowing which items are not taxed can help you plan your budget. Buying groceries instead of prepared food saves you the 8.875 percent tax on that meal. Buying clothing under $110 per item means no tax on those purchases. These small savings compound if you shop strategically.

Sales tax is regressive, meaning it takes a larger percentage of income from people who earn less. A person earning $30,000 per year spends a higher share of their income on sales tax than a person earning $100,000, because both pay the same tax rate on the same items. This is why New York exempts groceries and low-cost clothing from tax — to reduce the burden on lower-income households.

Frequently Asked Questions

Do I pay sales tax if I buy something online and have it shipped to New York City?

Yes, in most cases. Major retailers like Amazon, Walmart, and Target collect New York sales tax on orders shipped to New York addresses. Smaller online sellers may not, but New York law requires them to collect the tax. If a seller did not charge you tax, you may owe it to New York State, though enforcement is limited for individual purchases.

Is tax included in the price at restaurants and cafes?

No. The price on the menu is before tax. When you order a $15 meal, the tax of about $1.33 is added to your bill. Tip is usually calculated on the pre-tax amount, though some people tip on the total including tax.

What happens if a store charges me tax on groceries by mistake?

Ask the cashier or manager to correct it. Groceries should never be taxed in New York. If the store refuses to remove the tax, you can contact the New York Department of Taxation and Finance to report it. Keep your receipt as proof.

Are there any items that used to be taxed but are not anymore?

New York has changed its tax rules over time, but the main categories — groceries exempt, prepared food taxed, clothing under $110 exempt — have been stable for many years. Tax law does change, so if you have a question about a specific item, ask the store or check the Department of Taxation and Finance website.

Do I need to pay sales tax if I buy something in another state and bring it to New York?

No. Sales tax is paid where you buy the item, not where you live. If you buy something in New Jersey and bring it to New York, you do not owe New York sales tax on it. However, if you order something from out of state to be shipped to New York, New York tax applies.