New York Sales Tax Exemptions / Tax Free Items New York: Sales Tax Handbook

New York:

What purchases are exempt from the New York sales tax?

While the New York sales tax of 4.00% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in New York.

Sales Tax Exemptions in New York

In New York, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.

Several examples of exemptions to the state sales tax are over the counter prescription medications, certain types of food and groceries, some types of medical devices, family planning products, some types of machinery and chemicals which are used in development and research, and certain types of shoes and clothes that are less than 110 dollars. An item of clothing or footwear that costs $110 or more is subject to the full state tax rate. Sales tax is calculated per item, so even if you buy two or more items that add up to $110 or more, you only pay tax on the items that individually cost $110 or more.

Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for New York:


Clothing

  4.%

Groceries

  EXEMPT

Prepared Food

  4.%

Prescription Drugs

  EXEMPT

OTC Drugs

  EXEMPT

These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.

Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":


Is candy taxable in New York? Candy is NOT considered a grocery in New York
Is soda taxable in New York? Soda is NOT considered a grocery in New York

Are services, shipping, installation, etc taxable in New York?

The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the New York sales tax see the New York sales taxability FAQ page.


Other tax-exempt items in New York

This table lists a number of additional categories of goods and services that are exempt from New York's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in New York.

Category Exemption Status
Clothing
General Clothing EXEMPT *
Food and Meals
Grocery Food EXEMPT *
Manufacturing and Machinery
Machinery EXEMPT
Raw Materials EXEMPT
Utilities & Fuel EXEMPT
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines EXEMPT
Newspapers and Magazines
Newspapers EXEMPT *
Periodicals EXEMPT *
Occasional Sales
General Occasional Sales EXEMPT *
Optional Maintenance Contracts
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts EXEMPT
Software and Digital Products
Custom Software - Delivered on Tangible Media EXEMPT
Custom Software - Downloaded EXEMPT
Digital Products EXEMPT *
Trade-Ins
General Trade-Ins EXEMPT

* See notes in category taxability page for details



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Source: http://www.salestaxhandbook.com/new-york/sales-tax-exemptions