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What’s taxed and what isn’t in New York
The NYC 8.875 percent rate applies to most tangible personal property and some services. Notable exemptions: unprepared groceries, prescription drugs, most medical supplies, and clothing or footwear under $110 per item (a NYC and NY State carve-out). Restaurant food is taxed at the full rate. So is a $300 pair of jeans, but a $109 pair is exempt.
For businesses, sales tax is collected on behalf of the state – you file Form ST-100 quarterly (or ST-101 annually for low-volume sellers) with NY State. The NY DTF Sales Tax page has the current filing requirements.
Sales tax nexus changed dramatically after South Dakota v. Wayfair (2018). E-commerce sellers above $500,000 of in-state sales or 100+ transactions in NY must register and collect tax – even with no physical presence. We help business owner clients register and stay compliant across multi-state nexus.
For business owners
Sales tax is not your money. Treat it like withholding from someone else’s payroll – collected from the customer, owed to the state. The single most common mistake we see is a business owner pulling cash from the operating account that includes the sales-tax portion. When the filing comes due, the cash is gone.
The fix: separate sales-tax collections into a second account each week. Or, better, have your point-of-sale software route them automatically. For NYC restaurants and retail clients, this is the first conversation we have during onboarding.
Selling across state lines?
Multi-state nexus, exempt items, resale certificates, the back-tax letter from Texas – we untangle this for business clients.