Yes, New York has a sales tax, and it applies to most goods and some services

New York State charges a sales tax of 4 percent on most purchases. However, your actual tax rate depends on where you shop, because counties and cities can add their own local sales taxes on top of the state rate. In New York City, for example, the combined rate is 8.875 percent. In other parts of the state, it ranges from 7 percent to 8.875 percent depending on the county and municipality.

The tax applies when you buy tangible goods—clothing, groceries, electronics, furniture—at the point of sale. Some services are taxed, but many are not. The rules about what is taxed and what is not can seem inconsistent, which is why understanding the basics before you shop or do business in New York matters.

Key Takeaways

  • New York State's base sales tax is 4 percent, but your local rate is higher because counties and cities add their own taxes, ranging the total from 7 percent to 8.875 percent depending on location.
  • Groceries, prescription medications, and most clothing under $110 are exempt from sales tax in New York.
  • Services like haircuts, repairs, and professional fees are generally not taxed, but prepared food and certain digital services are.
  • Online purchases from out-of-state sellers may not have sales tax added at checkout, but New York residents are responsible for reporting and paying use tax on those purchases.

How the combined state and local rate works

The 4 percent state rate is just the floor. Every county in New York adds a county sales tax, and many cities and towns add an additional local tax. These stack on top of each other, so your total rate depends on your exact location.

New York City residents pay 8.875 percent total: 4 percent state, 4.5 percent city, and 0.375 percent metropolitan commuter transportation district tax. In Buffalo, the rate is 8 percent. In Rochester, it is 8.75 percent. If you shop near the state border, rates can vary significantly even between nearby towns. You can find your exact local rate by entering your ZIP code on the New York Department of Taxation and Finance website.

What is exempt from sales tax in New York

Groceries are not taxed in New York, which means items like milk, bread, vegetables, meat, and canned goods have no sales tax added. Prescription medications are also exempt. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescriptions are not.

Most clothing and footwear under $110 per item are exempt from sales tax. If a single piece of clothing costs $110 or more, the entire purchase is taxed. This rule applies to items like coats, shoes, and pants, but not to accessories like hats, belts, or gloves under $110, which are always taxed. Items sold as a set—like a suit jacket and pants sold together—are treated as one item for the $110 threshold.

Certain services are not taxed either. Haircuts, dental work, medical services, and professional services like accounting or legal information do not have sales tax. However, if you buy a product as part of that service—such as shampoo at a salon or a dental crown—the product portion may be taxed depending on how it is billed.

What is taxed that might surprise you

Prepared food is taxed, even if you eat it at home. A sandwich from a deli, a rotisserie chicken, or food from a restaurant all have sales tax. However, unprepared food—raw chicken, bread from a bakery section, or ingredients you cook yourself—is not taxed. The line between prepared and unprepared can be unclear; for example, sliced deli meat is considered prepared and taxed, but a whole rotisserie chicken sold cold may not be, depending on how it is presented.

Certain services are taxed even though many people do not expect it. Dry cleaning, laundry services, and shoe repair are taxed. Parking fees and tolls are taxed in some cases. Digital services like streaming subscriptions, e-books, and digital downloads have been subject to sales tax since 2019. Gym memberships and personal training are taxed. If you are unsure whether a specific service is taxed, the New York Department of Taxation and Finance publishes detailed guidance on their website.

Online purchases and use tax

When you buy from an out-of-state online retailer, sales tax may not be added at checkout. However, New York law requires you to pay use tax on those purchases. Use tax is essentially the same rate as sales tax, and it applies to goods you bring into New York or have delivered here, even if you bought them elsewhere.

Most large online retailers now collect New York sales tax automatically, so you will see it added at checkout. But if a seller does not collect it, you are responsible for reporting and paying the tax yourself. This is done through your New York State income tax return or, if you do not file income taxes, through a separate use tax return. Many people are unaware of this obligation, but the tax is owed regardless.

How sales tax is calculated and charged

Sales tax is calculated on the subtotal before any discounts are applied. If you have a coupon or discount code, the tax is based on the price after the discount. For example, if an item costs $100 and you have a $10 coupon, tax is calculated on $90, not $100.

When you buy multiple items, each item is taxed individually based on its category. A grocery bag with milk, bread, and a magazine will have tax on only the magazine. A clothing purchase with items under and over $110 will have tax only on the items over $110. At the register, the cashier or checkout system applies the rules automatically, so you do not have to calculate it yourself, but understanding how it works helps you predict your final cost.

Sales tax for businesses and resellers

If you are a business owner or reseller in New York, you need a sales tax ID from the Department of Taxation and Finance. You collect sales tax from customers and send it to the state monthly or quarterly, depending on your sales volume. You do not pay sales tax on items you buy for resale if you provide your resale certificate to the seller.

Businesses must register for sales tax before they start selling, even if they operate online or from home. The registration process is free and can be done through the Department of Taxation and Finance website. Failure to register or to remit collected sales tax can result in penalties and interest.

Frequently Asked Questions

Do I pay sales tax on groceries in New York?

No. Groceries like milk, bread, vegetables, meat, and canned goods are exempt from sales tax in New York. However, prepared foods like deli sandwiches, rotisserie chicken, and restaurant meals are taxed. The key distinction is whether the food is ready to eat or requires preparation.

What is the sales tax rate in New York City?

The combined sales tax rate in New York City is 8.875 percent. This includes the 4 percent state tax, 4.5 percent city tax, and 0.375 percent metropolitan commuter transportation district tax. Rates vary in other parts of New York State.

Do I have to pay sales tax on clothes?

Most clothing under $110 per item is exempt from sales tax in New York. Items $110 or more are fully taxed. Accessories like hats and belts are always taxed, regardless of price. If clothing is sold as a set, the entire set is treated as one item for the $110 threshold.

What happens if I buy something online from out of state?

You owe use tax on out-of-state purchases delivered to New York, even if sales tax was not collected. Most large retailers now collect New York sales tax automatically. If they do not, you report and pay the use tax through your New York State income tax return or a separate use tax form.

Are services like haircuts and dental work taxed?

No. Personal services like haircuts, dental work, medical care, and professional services are not taxed in New York. However, products sold separately—such as shampoo at a salon—may be taxed depending on how the transaction is billed.