New York City Sales Tax Guide for Businesses in 2025

No matter where you live or where your online business is based — if you have customers in New York City, you must follow city and local sales tax rules in addition to New York State’s rules. That’s what this guide is for! This guide includes everything you need to know about digital tax laws in New York City, whether your customers live in any of the five boroughs: Manhattan, Brooklyn, Queens, The Bronx, or Staten Island.

New York City Tax Jurisdiction Breakdown for 2025

New York State Sales Tax: 4%

New York County (Manhattan), Kings County (Brooklyn), Queens County (Queens), Bronx County (The Bronx) and Richmond County (Staten Island) Sales Tax: 0%

New York City Sales Tax: 4.5%

Metropolitan Commuter Transportation District surcharge of 0.375%

What is the sales tax rate in New York City, New York?

The minimum combined 2025 sales tax rate for New York City, New York is 8.875%. This is the total of state, county and city sales tax rates. The New York State sales tax rate is currently 4%. The counties’ sales tax rate is 0%, the New York City sales tax rate is 4.5%, and the Metropolitan Commuter Transportation District surcharge is 0.375%.

These rates go for standard taxable products. But other rates might apply to your business.

If you’re selling “vice” products like tobacco or alcohol, you might have an increased rate. If you’re selling essential items, such as medicine or clothing, or educational materials, you might have an exempt or reduced rate. More on that next!

What products are exempt from New York City sales tax rate?

• Clothing and Footwear items under $110
• Groceries (Ready-to-eat products and prepared meals are taxable)
• Pharmaceutical drugs
• Newspapers and periodicals
• Most textbooks
• Certain commercial vehicles used for business purposes
• Farm and agricultural equipment
• Some packaging materials and containers used in manufacturing or shipping

What digital products are taxed in New York City?

First, let’s confirm what you’re trying to sell in New York City. Are you selling digital products?

A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website.

You’re probably consuming and using digital products all day long, whether or not you realize it. Here are some common ones on the market today:

• E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, “Audio, visual, or audio-visual products.”
• Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall in the audio category.
• Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
• Websites, site hosting services, and internet service providers.
• Online ads and affiliate marketing. Income from these services can be considered taxable under digital tax policies.

Some US states can have more specific definitions or exceptions. In New York City, digital products delivered to a customer electronically, digitally or by streaming are usually not subject to sales tax.

Examples of other exemptions include:

• Internet access service
• Custom computer software
• Services performed on computer software or related to website design and development
• Subscription services where the service itself (like cloud storage or SaaS tools) is not considered a taxable software sale
• Electronic periodicals and news services
• Educational materials provided by schools or government entities

How does New York City sales tax compare to the rest of New York State?

New York City's combined sales tax rate of 8.875% is the highest possible rate in New York State, where rates can vary from 4% to 8.875%. This reflects the city’s approach to addressing local issues and funding city services through the sales tax system.

Learn more about sales tax rules state-wide in this Business Guide to Sales Tax in New York .

What creates sales tax nexus in New York City?

Since New York City is located in New York State, it follows the same state-level sales tax nexus rules. Forms of New York state sales tax nexus include:

• Economic nexus: When a business sells goods worth $500,000 or more in tangible personal property and engages in 100 or more separate sales in the state during the previous four quarters. More on that below!
• Physical location: This could be an office or a warehouse holding your inventory.
• Employee location: If you have an employee or any other type of representation based in a particular state or city, your business must register for sales tax there.
• Affiliate nexus: If you rely on in-state businesses to promote and refer your business, and you receive a substantial amount of income through these affiliates, then you have sales tax nexus.
• Trade Shows: You may be liable for collecting and remitting New York use tax on orders taken or sales made during New York conventions or trade shows, even if only in the state for trade show activity for one day.

New York City economic nexus as a remote seller

If your business is fully located outside of New York State, then economic nexus is your main concern. Here’s how it works. The economic threshold amount refers to your total sales in the whole state, during the previous four quarters.

Basically, if your annual sales in New York State remain below $500,000, then you don’t need to worry about sales tax at all. Phew!

But once your sales do surpass $500,000 and you’ve made 100 separate sales transactions, then you must register for sales tax and comply with all of the New York State rules around tax rate and collection, invoices, and filing returns.

Who needs a seller’s permit in New York City?

Any business with sales tax nexus, according to the rules above, must apply for a seller’s permit in New York State right away.

The seller’s permit comes with a sales tax registration number, which establishes you in the New York State tax system as a legal business. This number tracks your business through the system: the taxes you pay, the tax credits you receive, plus the tax you charge from customers.

How to get a seller’s permit in New York City

So, it turns out you do need to register for tax in New York City. Don’t worry! Just follow these instructions on how to register for sales tax in New York and that will cover you across the state.

How to calculate New York City sales tax?

Once you’re registered for taxes, you’re expected to apply sales tax to every taxable sale to a New York City resident. That means 8.875% for most products.

If your customer is a fellow business, and they’ve provided a valid sales tax exemption certificate, then adding and collecting tax isn’t necessary.

How to collect sales tax in New York City

Tax-compliant receipts in New York City

In order to comply with tax laws, you should include the following information on your receipts or invoices to customers in New York City:

• Your business’ name and address
• Your business’ sales tax registration number
• Invoice date
• Invoice sequencing number
• Buyer’s name and address
• Buyer’s sales tax registration number, if they have one.
• sales tax (amount and rate) applied to each item
• Final amount after tax is added

The easiest solution for the sales tax receipt would be to use a sales tax software that automatically generates and sends all invoices (as soon as the sale is complete), and also stores them in the cloud for you.

Quaderno provides automatic tax invoicing for every transaction. The app sends tax-compliant receipts, invoices, and credit notes automatically, on the spot. You can also set up recurring invoicing. In fact, Quaderno helps automate many other parts of tax compliance, from adding the correct tax rate calculations to your sales to providing instant reports for filing returns. Give it a try for free.

How to file and pay sales tax in New York City

Charging and collecting tax is only the first half of staying compliant. The second half is filing returns and paying whatever you might owe to the government.

How frequently you must file sales tax returns in New York depends on the amount of your taxable sales (and purchases subject to use tax), or the amount of tax due. Even if your business did not make any taxable sales or purchases during the reporting period, you must file your sales and use tax return by the due date.

There are also some differences in how you remit the sales tax that you’ve collected:

• Part-Quarterly Filers (monthly): If your sales are more than $300,000 during the previous quarter.
• Quarterly: If your sales are less than $300,000 during the previous quarter.
• Annually: If you owe $3,000 or less in tax during an annual filing period.
• PrompTax is an electronic filing and payment program mandatory for certain large businesses usually with annual sales and use tax liabilities over $500,000.

New York sales tax returns are due 20 days after the end of the period to which they relate. So that means the April tax return is due by May 20th. If the due date falls on a weekend or holiday, then your sales tax filing is generally due the next business day.

You can usually file and pay online! Check out more instructions on how to file sales tax in New York.