How to Calculate the NY Sales Tax Rate

By Ren Orin , last updated January 22, 2012

Whether you live in New York or you plan on buying something from New York and having it shipped, it’s important to have a good way to estimate exactly how much you’ll pay for your purchase. On top of whatever the price tag says, you’ll have to account for the sales tax of any item. Sales tax, as the name implies, is a tax collected by retailers and providers of particular services whenever they make a sale. Calculating it is usually pretty simple. Continue reading to learn about sales tax calculation in New York.

How Sales Tax Works

The sales tax of any item is based on the price of the item. If you’re having the item shipped to you, you’ll have to add shipping and handling to the price of the item before calculating the tax. There are a few fussy exceptions that involve doing work or taking an item bought in New York outside of the state for a particular period of time. Sometimes you can get away with paying sales tax on a monthly rate that might save you money. If you think that you might qualify for one of these exceptions, talk to a tax consultant.

How Sales Tax Rates Vary

Sales tax rates vary according to jurisdiction in New York. Figure out where you’re buying your good or service and the rate for sales tax in that area. Every area has a different rate, and the state of New York also has a 4% rate that is added to most rates. For the most accurate picture of what you’ll be paying, consider using one of the readily available sales tax calculators online. Depending on what you buy, things can get hairy.

An Example of Breaking down NY Sales Tax Rates

Look at New York City sales tax, for instance. For most goods and services you can expect an 8.875% sales tax. From this, 4% comes from the state of New York and 4.5% comes from the city of New York. Another 0.375% comes from a Metropolitan Commuter Transportation District surcharge. But there are many exceptions to this rule. New York City doesn’t levy sales tax on clothing or shoes that cost less than $110. New York State doesn’t levy tax on clothes or shoes that cost less than $55. So, if your purchase is under $55, you won’t pay any tax. And if it’s more than that, but less than $110, you’ll just have to pay the state sales tax.

Also, in New York City, there’s no state tax on hair salons and health clubs, but there is a city tax. You end up paying 4.5% on the service. If you buy some product or anything from the gift shop, you’ll be subject to the entire 8.875% tax.

And if you’re going to park, garage or store motor vehicles in Manhattan, be ready for a huge sales tax. The city charges a 10.375% tax plus an additional 8% surtax on this service. If you live in Manhattan and your car is registered there, you’ll be exempt from the surcharge, but you’ll still have to pay the 10.375% sales tax.

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