New York state tax has the second-highest average tax rate in the country, with the typical New Yorker paying over a quarter of their income to state and federal governments. And that’s just at the state level. For the 8.5 million-plus people living in New York City — the least tax-friendly city in America — additional city taxes mean they’re shelling out even more.
So, why are New Yorkers paying more in taxes than most of the rest of the country? Here’s a closer look at all of the state taxes in New York state.
|New York State Taxes|
|Rate Range of Taxes||1.578% – 8.875%|
|State Sales Tax Rate Range||7% – 8.875%|
|State Income Tax Rate Range||4% – 8.82%|
|State Property Tax Rate||1.578% average|
|Estate Tax Rate Range||3.06% – 16%|
New York State Income Tax
Personal income tax in New York is on a progressive system with eight brackets ranging from 4 percent up to 8.82 percent, which is only paid by people earning more than $1 million a year.
|New York State Income Tax|
|2018 Estimated Income Taxes||Tax Rate|
|$0 – $8,500||4%|
|$8,500 – $11,700||4.5%|
|$11,700 – $13,900||5.25%|
|$13,900 – $21,400||5.90%|
|$21,400 – $80,650||6.33%|
|$80,650 – $215,400||6.57%|
|$215,400 – $1,077,550||6.85%|
New York state income tax is also notable for the addition of a separate bracket for top earners that started with a 2009 bill, which created what’s now known as the “millionaires tax” that boosts rates to close to 9 percent for top earners.
New York State Sales Tax
The base sales tax rate for the state of New York is 4 percent, but add-ons — like the 0.375 percent included in the rates of 16 counties for the Metropolitan Commuter Transportation District — means that depending on the county or city you’re in, your rate can vary.
The state’s highest rates are paid in New York City, where all five boroughs — each of which is its own county — charge a rate of 8.875 percent at the point of sale. The lowest is the 7 percent rate paid in Saratoga, Warren and Washington counties.
But there are exemptions. New York State sales taxes don’t apply to a variety of different types of goods, mostly necessities like utilities or food that’s not prepackaged or served at a restaurant. New York City also offers some respite in the form of an exemption from state and city sales taxes for clothing or footwear purchases of $110 or less.
New York State Property Taxes
The average property tax rate across the state of New York is 1.578 percent, but that can vary widely depending on the locality in question. Anyone in New York County (Manhattan) has a rate of 1.925 percent, and some counties in Western New York have effective rates over 3 percent.
New York State Estate Tax
New York is one of the 14 states that charges taxes on the estates of the deceased, with rates ranging from 3.06 percent to 16 percent on any estates that exceed the basic exclusion amount, which is $5.25 million through the end of 2018. If an estate does exceed the BEA, it pays taxes at these tiered rates.
|New York State Estate Taxes|
|Size of Estate||Tax Rate|
|$0 – $500,000||3.06%|
|$500,000 – $1 million||5.00%|
|$1 million – $1.5 million||5.50%|
|$1.5 million – $2.1 milllion||6.50%|
|$2.1 million – $2.6 million||8.00%|
|$2.6 million – $3.1 million||8.80%|
|$3.1 million – $3.6 million||9.60%|
|$3.6 million – $4.1 million||10.40%|
|$4.1 million – $5.1 million||11.20%|
|$5.1 million – $6.1 million||12.00%|
|$6.1 million – $7.1 million||12.80%|
|$7.1 million – $8.1 million||13.60%|
|$8.1 million – $9.1 million||14.40%|
|$9.1 million – $10.1 million||15.20%|
|$10.1 million and over||16.00%|
Find Out: How to Minimize Your Estate Tax
And if the New York State Department of Taxation and Finance wasn’t already making things complicated enough with different brackets, New York state’s estate tax is also unique for what is commonly referred to as the estate tax “cliff.”
The estate tax at the federal level has a basic exclusion amount of $11.18 million, and you only pay taxes on your “taxable estate,” which is the portion of your estate that’s over that value. The New York estate tax, though, taxes the entire value of the estate for any estate that clears the BEA. So, while an estate worth $5 million would owe nothing, an estate worth $5.5 million would owe a whopping $450,000 — hence the “cliff” for estates that are right at or near the BEA.
The state of New York does not levy an inheritance tax.
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