New York sales tax: rates, nexus AND-test & DTF filing
New York is the only major state that still uses an AND test for economic nexus — $500,000 sales AND 100+ transactions in the preceding four sales tax quarters. It also taxes SaaS, runs on a March–Feb sales-tax year (not calendar), and has city-specific handling for apparel under $110. Five surface-area quirks every NY seller has to get right.
The New York numbers at a glance
| Field | Value |
|---|---|
| State rate | 4.00% |
| Combined rate range | 7.00% – 8.875% (NYC + LI + Westchester at 8.875%) |
| Economic nexus threshold | $500,000 sales AND 100+ transactions (rolling 4-quarter) |
| Sales tax year | March 1 – February 28/29 (not calendar) |
| SaaS taxable? | Yes — fully taxable per TB-ST-128 |
| Clothing under $110 | State-exempt (4.00%); NYC still charges 4.875% |
| Filing frequency | Annual / quarterly / part-quarterly (monthly + prepayment) |
The NY AND-test on economic nexus
Every other major state uses an OR test: $X sales OR Y transactions triggers nexus. New York requires BOTH:
- $500,000 in cumulative NY sales, AND
- more than 100 sales transactions
- in the immediately preceding four sales tax quarters (the rolling 4-quarter NY-fiscal-year lookback).
Practically: a luxury seller with 50 transactions totalling $2M does NOT have NY nexus on the AND test. A volume seller with 200 transactions totalling $400k also does NOT. Both have to cross both thresholds. HelloBooks tracks both counters on the rolling lookback and only alerts when both will cross.
The March 1 – February 28/29 sales tax year
New York's sales tax periods do not align with calendar quarters:
- Q1 — March 1 to May 31 (return due June 20)
- Q2 — June 1 to August 31 (return due September 20)
- Q3 — September 1 to November 30 (return due December 20)
- Q4 — December 1 to February 28/29 (return due March 20)
Annual filers file once on March 20 for the prior fiscal year. Part-quarterly filers (very high-volume, > $300,000 in NY tax per quarter) file monthly returns and a prepayment voucher. Calendar-year mindset is the biggest single cause of NY late filings — HelloBooks's calendar uses NY's fiscal year so reminders fire at the right times.
The clothing-under-$110 quirk
NY Tax Law § 1115 exempts clothing and footwear sold for under $110 per item from the 4.00% state sales tax. Most counties match and exempt their local portion. New York City does not.NYC continues to charge its 4.50% city sales tax plus the 0.375% MCTD on clothing under $110.
Net effect for an NYC sale of a $90 shirt:
- State 4.00% — exempt → $0
- NYC 4.50% — applies → $4.05
- MCTD 0.375% — applies → $0.34
- Total: $4.39 on a $90 shirt (effective 4.875%)
Apparel sellers fielding NY orders must apply the right state-vs-city math per ship-to ZIP. HelloBooks handles this when the item is tagged as clothing in the master.
NY LLC publication requirement (not sales tax, but worth knowing)
Separate from sales tax: New York LLCs and foreign LLCs registered in NY must publish notice of formation in two newspapers — one daily, one weekly — for six consecutive weeks in the county of the LLC's principal office, then file a Certificate of Publication ($50 fee). Window is 120 days from formation. Skip it and the LLC's authority to sue or maintain actions in NY state court is suspended (Tax Law § 1115). Notice costs in Manhattan alone can run $1,500–$2,000 (the Wall Street Journal publishing rate). One of the more expensive state setup oddities.
How HelloBooks does this
HelloBooks handles every NY-specific quirk — the AND-test, the March–Feb fiscal sales tax year, SaaS taxability, and the NYC clothing carve-out.
- 1
Register with NY DTF
Apply for a New York State Certificate of Authority on the Department of Taxation and Finance portal — free. You'll get a Sales Tax Vendor ID and a filing schedule (annual / quarterly / part-quarterly) based on expected liability. Enter the ID and schedule into HelloBooks.
- 2
Track NY sales on the March–Feb sales tax year
HelloBooks tracks NY sales on the state's fiscal sales tax year (March 1 – Feb 28/29), not the calendar year. The dashboard shows nexus progress against the $500k-and-100-transactions AND test on a rolling four-quarter basis.
- 3
Tag SaaS, clothing, and digital products correctly
SaaS is taxable in NY (unlike most states) — mark items appropriately. Clothing under $110 is state-exempt but NOT NYC-exempt — HelloBooks applies the right rate per ship-to ZIP when the item is tagged as clothing. Digital products follow item-by-item rules; HelloBooks ships a current NY taxability matrix.
- 4
Apply the right rate per buyer ZIP
NY combined rates vary: 8.875% in NYC and Westchester / Long Island, ~8.00% upstate, with some counties at 7.00%. On Pro and above, HelloBooks computes the right combined rate per ship-to ZIP through Avalara AvaTax, kept current with NY DTF Publication 718. On the Free Plan you apply manual per-state rates.
- 5
File the quarterly (or part-quarterly) return on the 20th
HelloBooks builds the return draft on the NY fiscal quarter end-date (March, June, September, December reports due the 20th of the following month). Part-quarterly filers get monthly returns with prepayment vouchers automatically. Review, file directly on the NY DTF portal, mark paid in HelloBooks.
Frequently asked questions
What is the New York sales tax economic nexus threshold?
$500,000 in cumulative NY sales AND more than 100 sales transactions in the state — both must be true within the immediately preceding four sales tax quarters (Mar–Feb cycle, not calendar year). New York is the only major state still using an AND test rather than OR. The four-quarter lookback rolls — not a fixed calendar year.
What is the New York sales tax rate?
New York state sales tax is 4.00%. Counties and cities add their own — combined rates typically run 7.00%–8.875% depending on the location. New York City: 8.875% (4.00% state + 4.50% city + 0.375% MCTD). Westchester / Long Island also at 8.875%. Most upstate counties are 8.00%.
Does New York tax SaaS and digital products?
SaaS — yes, fully taxable. New York treats remote-access SaaS as a taxable 'transfer of pre-written software' under Tax Bulletin TB-ST-128. Digital products — selectively: digital downloads of music, video, ebooks are taxable; cloud storage and information services have specific rules. New York is one of the most aggressive states on tech taxability.
How does New York marketplace facilitator work?
New York Marketplace Provider Act (effective June 1, 2019) requires marketplace facilitators with $500,000 in cumulative NY sales OR 100+ transactions to collect and remit. Amazon, Etsy, eBay, Walmart, Shopify Markets in NY are facilitators. Your direct-channel sales still require registration; marketplace gross sales count toward your nexus AND-test but the marketplace remits.
What is the New York sales tax filing schedule?
New York uses a non-calendar sales tax year — quarterly periods run March 1 – May 31, June 1 – August 31, September 1 – November 30, and December 1 – February 28/29. Annual filers (low-volume): one return due March 20 for the prior year. Quarterly filers: due the 20th of the month after each period ends. Part-quarterly filers (high-volume — > $300,000 quarterly tax): file monthly with prepayment quarterly. Calendar-year reset is the most common SMB-tripping detail.
What is the New York LLC publication requirement?
Separate from sales tax but relevant to NY LLCs: within 120 days of formation or registering as a foreign LLC in NY, you must publish notice of formation in two newspapers (one daily, one weekly) for six consecutive weeks in the county of your principal office, then file a Certificate of Publication with the Department of State plus a $50 filing fee. The notice fees alone can run $400–$2,000 (Manhattan most expensive). LLCs that skip publication lose authority to sue or maintain actions in NY courts.
What is New York's clothing exemption?
Clothing and footwear sold for under $110 per item are exempt from the 4.00% state sales tax (Tax Law § 1115). Most NY counties also exempt clothing under $110, but New York City does NOT exempt the 4.50% city portion plus the 0.375% MCTD — so in NYC, sub-$110 clothing still has 4.875% sales tax. Worth knowing if you're a New York apparel seller.
What are the most common New York sales tax mistakes?
(1) Using a calendar-year mindset — NY's sales tax year runs March 1 – Feb 28/29. (2) Missing the AND-test on economic nexus (not just $500k). (3) Treating SaaS as exempt when New York fully taxes it. (4) Forgetting NYC's special handling on clothing under $110. (5) For NY LLCs — missing the publication requirement and losing court access. (6) Filing on a calendar quarter instead of the NY fiscal quarter end-date.
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