New York City Sales Tax

Rules, Exclusions, and Tips for Shoppers

Shopping in NYC
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Shoppers in New York City should know that most listed prices don't include sales tax, which might be because purchases made in New York City are subject to both New York City (4.5%) and New York State (4%) sales tax, as well as the Metropolitan Commuter Transportation surcharge (0.375%). Combined, most purchases are subject to an 8.875% sales tax.

Another reason for not listing these sales tax costs is that so many items in New York City are excluded from the sales tax including clothing and shoes under $110, unprepared foods, prescription drugs, diapers, and even some specialty services.

If you're planning a shopping trip to New York City, you should keep this in mind when trying to budget your expensive—if you manage to buy all of your individual clothing articles at prices below the threshold, for instance, you can avoid paying sales tax altogether on a brand new wardrobe!

Items Excluded From Sales Tax in NYC

While there are a lot of items that do include sales tax, which can make your purchase cost almost 10 percent more, there are a lot of essential items that buyers don't have to pay a sales tax on.

The biggest and best thing that's excluded from this tax are items of clothing or shoes that do not exceed $110 in cost. However, if an individual item that you purchase costs $110 or more, it will be taxed for the full amount (not just amounts that exceed $110) while other items in your shopping cart that don't exceed this limit will not be individually taxed, even during the same transaction.

Other big-ticket items that avoid sales tax in New York City are groceries and food items that are not prepared as well as prescription drugs, diapers, prosthetic aids and devices, hearing aids, and eyeglasses. Exclusion for these items largely came from progressive legislation in the New York City tax code that wanted to lessen the costs associated with self-care of residents of the metropolitan area.

Additionally, laundry, dry cleaning, and shoe repair services are excluded from the necessity of a sales tax.

Tips for Planning Your Budget With Sales Tax in Mind

Keep in mind that some items that are worn on the body are not considered clothing under NYC's sales tax legislation. These non-clothing articles include sportswear like ice or roller skates, costumes for Halloween or theater, safety gear like goggles or riding jackets, jewelry and watches, and fashion eyewear, all of which are subject to sales tax regardless of price.

If you're in the middle of a shopping trip and just can't live without that $120 dress or pair of heels, chances are you're not going to have the time to stop and think about what the additional sales tax will cost. That's why it's best to just assume the sales tax is 10 percent and calculate the additional cost quickly by dividing the price by 10 and adding the result to the total cost. When taxes are included in posted pricing, you'll usually see a sign indicating that it's the case.

Since restaurant meals are taxed at 8.875 percent, the total sales tax for a dining service, you can double the tax for your tip and you'll be tipping 17.75 percent. Anything over 15 percent of the total bill is a great tip for a waiter or waitress that did a good job serving your table, so by simply doubling the tax amount and rounding up can save you time and energy while still paying for quality service fairly.