Although the city of New York has some of the highest sales taxes in the country, less than half of that is attributable to the state’s share of the pie. On the whole, the combined sales and use tax for the state of New York is just 4 percent, but once local and city governments add in their own rates, the average rate is pushed all the way up to almost 8.5 percent, putting New York among the 10 highest average sales tax rates in the country.
The New York City sales tax rate is much higher at 8.875 percent, including the state sales tax rate, a city sales tax rate of 4.5 percent and the Metropolitan Commuter Transportation District surcharge of 0.375 percent. But there are ways to get around sales taxes in New York City. Clothing and footwear purchases under $110 are exempt from city and state taxes, and if you’re visiting the city but don’t live there, you can even get a 10 percent discount to counterbalance the sales tax at certain stores by stopping at the visitor’s booth.
|New York State Sales Taxes|
|Local Rate Range||3% to 4.88%|
|Total Rate Range||7% to 8.875%|
County, City Taxes Mean New York State Sales Tax Rates Will Vary
Throughout the rest of the state, sales and use tax rates will vary depending on the county and city you’re in. And New York counties typically add an additional 4 percent or more to your taxes every time you make a qualifying purchase. The highest rates are in the five counties that make up New York City, but Oneida and Erie county each have a 4.75 percent rate in addition to New York’s 4 percent. The counties with the lowest additional sales tax rate are Saratoga County, Warren County and Washington County, only adding another 3 percent to every purchase.
Everything You Need to Know: New York State Taxes
Here’s a look at each county in New York and its prevailing sales tax rate:
|New York Sales Tax by County|
|County||State Rate||County Rate||Total Sales Tax|
|New York (Manhattan)||4%||4.88%||8.88%|
|Richmond (Staten Island)||4%||4.88%||8.88%|
What Is (and Is Not) Exempt From New York Sales Tax?
Like most states, New York sales tax doesn’t extend to everything. Plenty of basic necessities like food that’s not prepackaged or served at a restaurant and utilities are not subject to sales tax, whereas most other products you buy at the store would be. Some services are specifically subject to New York City sales tax as well, most of which include beauty or spa treatments like massages, electrolysis, manicures and pedicures, tanning and health salons.
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Where Does New York Sales Tax Go?
For the last full fiscal year, the state of New York collected $15.2 billion in sales taxes, which comprised about a fifth of its total tax revenue but just a third of what was collected from state income taxes. That money goes toward covering the nearly $100 billion in State Operating Funds spent each year.
In the city of New York, sales taxes also pay for a smaller but important share of the city’s total budget. The 8.66 percent of the city’s income coming from sales tax is the fifth-largest source of funding behind federal grants (9.342 percent), income tax (13.667 percent), state grants (16.647 percent) and property taxes (29.252 percent). That’s all a part of the approximately $82 billion in tax revenue collected by the city against expenditures of just over $85 billion.
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