Many states impose sales taxes. Yet many consumers remain unaware that local rates can drastically increase the overall tax bill.
New York City charges 4.5% sales tax plus a 0.375% Metropolitan Commuter Transportation District surcharge to reach an 8.875% total sales and use tax rate.
New York State
New York state sales taxes stand at 4% plus local taxes that can reach as much as 8.875%, with New York City also adding the Metropolitan Commuter Transportation District surcharge of 0.375% which adds another 1.875% to total sales tax rate.
New York state taxes a variety of services, such as beautician and barber services, hair restoration, manicures and pedicures, massage therapy, tanning and tanning beds. Furthermore, sales taxes apply for telecommunicating services, credit reporting and certain utilities.
New York law mandates that businesses meeting nexus criteria register for sales and use tax permits if they meet nexus requirements, which is usually defined as economic activity but may include threshold transactions or physical presence (like warehouse or office). Out-of-state sellers with economic nexus to New York must file taxes monthly, quarterly, or annually as their deadlines for filing are stringent; penalties for failure to file may also be severe.
New York City
New York state currently imposes a sales tax rate of 4%; however, local rates can differ widely depending on where you reside. There are 641 sales tax jurisdictions (cities, counties, towns and special districts) across the state which collect an average local tax of 4.254% in addition to this statewide rate.
New York tax laws cover most tangible products sold at grocery stores (with some exceptions for prepared and/or heated foods), clothing and footwear purchases under $110 per item and family planning supplies; they also tax services such as lawn mowing, interior/exterior painting of buildings/structures and snow removal.
Online retailers with physical or economic nexus in New York must register for a sales tax permit if they pass certain thresholds for total revenue or transactions; marketplace sales count towards this threshold. 1StopVAT’s New York guide contains comprehensive details regarding registration requirements and rate areas.
Renting a Car
Sales taxes typically take the form of a percentage of total costs. For example, if an item costs $1,000 and its sales tax rate is five percent, it will cost the consumer $105. This rate is known as tax-inclusive rate because its cost includes both purchase price and taxes paid.
Businesses selling taxable goods or services must abide by sales tax laws in each state where they operate as well as local sales and use taxes. An easy way to determine how much sales tax must be collected is multiplying the cost of each taxable good or service sold times the state sales tax rate.
Customers renting cars should also be mindful of possible additional fees like parking charges and tolls when renting. When possible, use corporate or AAA codes and rent at off-peak hours to reduce additional fees. Also be sure to inspect the vehicle thoroughly for damage before driving away from the lot.