New York: Sales Tax Handbook
What purchases are taxable in New York?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the New York sales tax.
Contents1.) Taxability of Goods and Services
- General New York taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in New York?
In the state of New York, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. Some examples of items that exempt from New York sales tax are over the counter prescription medications, certain types of food and groceries, some medical devices, family planning products, some types of machinery and chemicals that are used in development and research, and certain types of shoes and clothes that are priced under one hundred and ten dollars.
This means that an individual in the state of New York who sells school supplies and books would be required to charge sales tax, but an individual who owns a store which sells clothing is not required to charge sales tax on all of its products.
Are services subject to sales tax in New York?
In the state of New York, some types of services are considered to be taxable. Services which provide maintenance or repairing real, tangible property, it is usually considered to be taxable. Some examples of these types of services are(but not limited to) lawn care, landscaping, snow removal services, swimming pool maintenance, plumbing repairs, and house painting.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in New York?
In the state of New York, the laws regarding tax on shipping and handling costs are relatively simple. Essentially, if the item being shipped is taxable, and if you charge for the shipping as part of the order, then the shipping charge is considered to be taxable. If the item is not taxable, then the shipping is not seen as being taxable either. If the items being shipped are promotional materials, and the shipping charge is separately stated on the invoice, then no tax is applied to the shipping costs.Top
Are drop shipments subject to sales tax in New York?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In New York, drop shipments are generally subject to state sales taxes.
Section 2: Taxability of Various Items in New York
This table shows the taxability of various goods and services in New York. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||TAXABLE *|
|General Clothing||EXEMPT *|
|Food and Meals|
|Grocery Food||EXEMPT *|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT|
|Medical Goods and Services|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Motor Vehicles||TAXABLE *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||TAXABLE|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||EXEMPT|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Janitorial Services||TAXABLE *|
|Transportation Services||TAXABLE *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||TAXABLE *|
|Digital Products||EXEMPT *|
|Vending Machine Sales|
* See notes in category taxability page for details
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