"Start spreading the news, I am leaving today, I want to be a part of it, New York, New York...1"; of course those words were made famous in song by Frank Sinatra2 and today most people associate the song with both Sinatra and the City.
While it may seem natural to associate the City of New York (aka: New York, New York) with the State of New York, there is far more to the State of New York that New York City. In fact New York is the 27th most extensive by land area, and fourth most populous state in the United States. Almost 20-million people live in New York's 54,555 square miles, producing a population density of 416 people for every square mile of the state. The New York City Metropolitan Area is one of the most populous in the US, New York has always seemed to be the center of immigration into the U.S., in part due to the infamous Ellis Island that paved the way for so many European immigrants during our Nation's early growing history. The Statue of Liberty welcome those immigrants into New York's harbor.
New York City also tends to be the center of our country's 'financial markets' including the New York Stock Exchange, but also many of the 'central banking' and investment decisions made in our country are made within the confines of the New York financial district commonly referred to as 'Wall Street.' Similarly, while not a formal U.S. institution, the United Nations is Headquartered in New York City thus making New York a hub of international diplomacy and 'worldly' considerations.
Many of our country's greatest landmarks are found in New York including the Empire State Building (once the tallest building in the world), Times Square, Central Park, Grand Central Station, (all within New York City) and Niagara Falls, one of the great wonders of the world if I say so myself, just the sound of the rushing water is deafening.
In addition New York, and NYC is considered to be the 'cultural center' of our country, the arts, theater, and much of commercial television are still based in New York. Similarly the hub of the fashion industry within the U.S. and its' closely associated 'modeling' industry are also considered New York based enterprises.
But New York City isn't the only city in New York, in fact there are several other large and equally as important cities including Albany, the State's Capitol city, and 6th largest city in the state. Others include Buffalo, Rochester, Syracuse, Yonkers and Syracuse. Each of these cities has its own unique qualities, history and economic base.
We could probably write hours of history and true-to-fact tales of New York, but here are a few facts to get us ready to move on to our discussion of New York Sales Taxes.
New York Factoids:
- New York City was the original capital city of the United States (1785 to 1790). George Washington was sworn into office as president on the Federal Hall balcony in 1789.
- Dairies are a major industry in New York. The state has more than 18,000 cattle farms.
- There are more than 722 miles of subway track in New York City.
- The village of Chittenago, home to Wizard of Oz author L. Frank Baum, has yellow brick inlaid sidewalks.
- The New York Post is the oldest running newspaper in the U.S.
- The first railroad in the U.S. ran between Albany and Schenectady.
- “Uncle Sam” was a meatpacker from Troy, NY named Sam Wilson.
- Adirondack Park is the largest park in the lower 48 states with an expanse of 6.1 million acres. It is larger than Yellowstone, Yosemite, Grand Canyon, Glacier and Olympic Parks combined.
About Sales Tax and this Series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We have been publishing a "Sales Tax Tuesday" article every week this year.
Sales tax provides critical revenue for states as well as many counties and cities. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts:
- New York’s state sales tax rate is 4%.
- Depending on local municipalities, the tax rate can be as high at 8.875%.
- Before legally making any taxable sales in New York, a vendor must apply for and receive a Certificate of Authority from the New York State Tax Department.
- New York is considered one of the “big four” for sales tax, along with California, Florida and Texas. These four are the most populous U.S. states and have the highest sales tax revenue collections.
- New York is a destination sourcing state. This means that sales tax is based on the location of the buyer, not the seller.
- New York is NOT a Streamlined Sales Tax (SST) member state.
- New York was the first state to extend the definition of sales tax nexus to include web retailers. Amazon.com filed a lawsuit in New York in 2008 objecting to the law, but didn’t prevail. This decision, along with the failure of the federal government to enact Marketplace Fairness Act legislation, has led many states to follow suit and extend the definition of sales tax nexus to remote sellers.
- New York exempts clothing purchases under $110 from sales tax. The exemption only applies to clothing and shoes worn by humans (not pets) and excludes costumes, formal wear, athletic equipment and protective gear, and anything heavily embellished (stones, pearls, metal, etc.) that would make repair difficult. Additionally, while purchases of clothing under $110 are exempt from state sales tax, local jurisdictions may still tax these sales. Certain cities may also apply a MCTD (metro commuter transportation district) tax to these sales.
Did You Know?
Any way you slice it… New York is famous for its bagels — and its weird tax rules around those bagels. If you want your bagels sliced, toasted, or with a shmear — you'll pay extra (in sales tax). It’s now taxed as a “prepared food.” Get it whole to go and you’ll be exempt from paying tax.
That’s how the cookie crumbles. Buy a regular Twix candy (package of two) and it’s taxable as candy. But it in a bigger size (package of six) and it’s now classified as a cookie and is tax-exempt.
Manual sales and use tax management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via AvaTax allows businesses to be fully sales tax compliant without sacrificing productivity.
1 - New York, New York is the the theme song from Martin Scorsese's 1977 film New York New York, composed by Jon Kander with lyrics by Fred Ebb. The song was not written for Frank Sinatra, as many people think.
2 - Frank Sinatra first sang the song New York, New York in a 1979 performance and then recorded it on his album titled, Trilogy: Past Present Future in 1980 under the Reprise label.