whether in-person or online, understanding sales tax is essential.
New York’s sales tax system combines a statewide rate with local add-ons, and compliance rules are strict.
Here’s everything you need to know for 2025.
What Is New York Sales Tax?
• Sales tax is added to most goods and some services at the point of sale.
• The seller collects the tax from the buyer and remits it to the state.
• The final consumer bears the cost. 2025 Sales Tax Rates
• Statewide base rate: 4%
• Local rates: Added by counties and cities, varying by location.
Who Must Collect New York Sales Tax?
You must collect sales tax if:
• You have a physical presence in NY (store, warehouse, office), or
• You’re a remote seller with:
• Over $500,000 in NY sales and
• More than 100 separate sales in the previous year Marketplace sellers (e.g., Amazon, Etsy): The marketplace collects and remits sales tax on your behalf, but you may still need to report these sales.
What’s Taxed vs. Not Taxed?
Taxable:
• Most tangible goods (electronics, furniture, jewelry)
• Clothing items over $110
• Some services: hotel stays, car rentals, parking, certain repairs/installations
Not Taxed:
• Most grocery food
• Prescription drugs
• Clothing/shoes under $110
• Some medical devices Filing Sales Tax Returns
• How often? Monthly, quarterly, or annually (state assigns your schedule)
Due dates:
◦ Monthly: 20th of the next month
◦ Quarterly: 20th after quarter ends
◦ Annually: March 20th of following year
• How to file: Online via the New York Tax Department Penalties for Late Filing or Payment
• Penalty: 10% of unpaid tax, plus interest (monthly rate)
• Tip: File and pay on time—penalties add up fast.
Certificate of Authority
• Required before collecting tax
• Apply online (free) and display at your business
• Don’t collect tax before you have your certificate
Exemptions
• Some buyers don’t have to pay sales tax, including:
• Government entities
• Nonprofits (with valid documentation)
• Retailers buying for resale
Always get and keep a completed exemption form.
Recordkeeping
• Keep records for at least 3 years
• Include: sales, dates, locations, tax collected, exemption forms
• Good records are your best defense in an audit
Use Tax
• If you buy out-of-state and don’t pay NY sales tax, you owe use tax.
• Businesses report this on their return; individuals on their income tax.
Special Rules for Remote Sellers
• Out-of-state sellers must collect NY sales tax if they meet the $500,000/100 sales threshold (economic nexus).
• Marketplace facilitators (Amazon, eBay, etc.) must collect and remit sales tax for you.
Industry-Specific Rules
• Restaurants: Tax on prepared food/drinks; tips not taxed; service fees are taxed.
• Construction: Materials taxed; labor for capital improvements not taxed.
• Telecom: Phone, cable, and satellite TV are taxed; internet access is not. Online Sellers
• Must follow the same rules as brick-and-mortar businesses.
• Use NY’s tax rate lookup tool for accurate rates by address.
How to Register
• Register via New York Business Express
• Needed: business name, EIN, owner info, description of goods/services
• Receive your Certificate of Authority before collecting tax Compliance Tips
• Register early, file on time, and pay the correct amount
• Charge the right rate for every location
• Use tax software for multi-location or online sales
• Train staff on correct tax application
Frequently Asked Questions
Q: Do I need to collect sales tax at craft fairs?
A: Yes, and you must have a Certificate of Authority before selling.
Q: How do I charge the right rate for shipped items?
A: Use the rate for the delivery address (check NY’s rate lookup tool).
Q: Are digital products taxed?
A: Some are—downloads like music or eBooks may be taxed if considered tangible property.
Q: What if I stop doing business in NY?
A: File a final return and close your sales tax account.
Q: Can I get an extension to file?
A: No. NY does not offer extensions for sales tax returns.
Q: Is shipping taxable?
A: If the item is taxable, shipping is too. If not, shipping isn’t taxed.
Final Word New York’s sales tax system is complex and strictly enforced.
Stay compliant by registering, charging the correct rates, filing on time, and keeping thorough records. For the latest updates, always check the New York Department of Taxation and Financ website.
Need help with New York sales tax?
Centflow Global offers expert support for US sales tax compliance, audits, and filings.