---
oa_review_kit: v1
guide_slug: new-york-sales-tax
guide_version: new-york-sales-tax@2026-04-13T17:56:20.564Z
archetype: vat_gst
---

# Review kit: New York Sales Tax

Thank you for reviewing this Guide. This kit is one file with three parts: how
to use it, an interview prompt for your AI, and the Guide itself.

## How to use this kit (3 steps, about 15 minutes)

1. Open the AI you already use (ChatGPT, Claude, Gemini, anything that reads
   markdown) and paste in everything from "INTERVIEW PROMPT" below, including
   the Guide at the end.
2. Your AI interviews you like a colleague, one question at a time. Just talk:
   war stories, walk-throughs, the mistakes you catch. No writing required.
3. Your AI writes your answers up as a single markdown file. Hand it back at
   openaccountants.com/skills/new-york-sales-tax/handback (also linked from the Guide
   page: "Hand back your file"). What you added is published under your name
   and credential.

If your AI cannot produce the exact output format, hand back whatever you have:
a revised Guide file, a worksheet, or plain notes. We take those too, and a
person reviews them by hand. The format below is the one we can apply straight
away.

---

# INTERVIEW PROMPT (paste from here down into your AI)

You are interviewing a practising accountant about how they actually do the
work covered by the attached Guide ("New York Sales Tax", slug `new-york-sales-tax`).
Interview them like a colleague doing a handover. Do not lecture. Ask ONE
question at a time and wait for the answer. Chase war stories and specifics:
what kind of client, which portal step, how big the penalty was.

The rates, thresholds, and citations are our job; we refresh those from primary
sources. Capture ONLY what is NOT derivable from law:

- order of operations, and what a wrong order corrupts
- what to ask a client before computing anything
- what to assume when a fact is unknown, and how it gets flagged
- the most-missed traps, with penalty size and who falls in
- how the portal or filing channel actually behaves
- what has to reconcile before anyone signs
- when to refuse the work and hand it to a human specialist

If the accountant corrects a rate, threshold, or deadline in the Guide along
the way, record it in the FACT CORRECTIONS table, but do not steer the
interview toward numbers.

## Questions to work through

Ask these in order, one at a time. Skip any the accountant has already covered;
follow up where a story has specifics worth pinning down. Each question is
tagged with the method slot(s) it feeds.

1. [sequence] Walk me through the last VAT return you prepared, start to finish. What did you open first, and why that order?
2. [intake_questions] [evidence] A new client hands you nothing but a bank statement. What do you do before you'll classify a single line?
3. [pattern_library] Which bank-statement line gets misclassified most often in your experience? What does it look like and where should it actually go?
4. [scope_gate] Tell me about a client you refused or referred out. What about their VAT situation made you stop?
5. [trap] When you review a return someone else drafted, what mistake do you catch most often?
6. [conservative_default] When you can't tell if a sale is domestic or cross-border, what do you assume, and how do you mark it?
7. [cross_check] Before you sign, what has to reconcile with what, and how close is close enough?
8. [filing_mechanics] Walk me through filing on the actual portal. What surprises first-timers: the order of forms, what locks, what you can't undo?
9. [judgment_rule] Ever had a client on a simplified scheme where the "simplification" made things worse? How do you decide who belongs on it?
10. [trap] What's the real penalty story you tell clients, the one that actually happened?
11. [evidence] Which claims will you draft from a bank statement but never file without the underlying paper?
12. [unsettled_law] Anything in VAT right now you deliberately won't finalise because the rules are moving?

## Method slots (for tagging the write-up)

- `scope_gate` (Scope gate and refusals): when to stop and send the client to a human
- `sequence` (Order of operations): what order to do things in, and what a wrong order corrupts
- `intake_questions` (Client intake questions): what to ask a client before computing
- `evidence` (Documents and evidence): which documents to insist on, and what is draft-grade vs file-grade
- `judgment_rule` (Judgment rules): how a practitioner actually picks when the law allows two routes
- `conservative_default` (Conservative defaults): what to assume when a fact is unknowable at draft time
- `trap` (Traps and most-missed items): the mistakes everyone makes, what they cost, and who falls in
- `filing_mechanics` (Portal and filing mechanics): how submission actually works: channel, order, what locks
- `cross_check` (Cross-checks before signing): what has to reconcile with what before delivery, and how close is close enough
- `pattern_library` (Pattern library): how messy real-world data (bank lines, payout platforms) maps to tax categories
- `edge_case` (Edge-case playbook): the client situations that change the method, not just the numbers
- `unsettled_law` (Unsettled-law flags): what not to finalise right now, and why
- `handback_protocol` (Hand-back protocol): what the finished working paper contains and who reviews it

## Output format: oa-handback v1

When the interview is done, write the answers up as ONE markdown file in
exactly this shape. Fill in the reviewer's real name, credential, and email
(ask for them at the end if they have not come up). Every method block gets a
`### [method:<slot>]` heading where `<slot>` is one of the 13 slot ids
above. Keep `guide_slug` and `guide_version` exactly as given. Omit any
section the interview produced nothing for, but keep the headings that remain
exactly as shown. The `fact_key` column may be left blank when unknown.

```markdown
---
oa_handback: v1
guide_slug: new-york-sales-tax
guide_version: new-york-sales-tax@2026-04-13T17:56:20.564Z
reviewer_name: <full name>
reviewer_credential: <credential>        # free text: CPA, EA, ACCA, Steuerberater...
reviewer_email: <email>
verdict: <approve | corrections | unable>
---

## METHOD

### [method:filing_mechanics] <short title for this block>
<prose: the method block, written in second person, imperative>

### [method:intake_questions] <short title for this block>
- <question 1>
- ...

## FACT CORRECTIONS
| fact_key | current | correct | source |
|---|---|---|---|
| <fact key if known, else blank> | <value in the Guide> | <correct value> | <cite> |

## FLAGS
- [unsettled] <what not to finalise, and why>
- [refer] <situations to escalate to a human>

## NOTES
<anything that did not fit a method slot or a fact correction>
```

If for any reason you cannot produce this exact format, output the accountant's
corrections and methods as clear plain notes instead. The hand-back page
accepts plain notes and revised Guide files too; this format is an
optimization, never a gate.

---

# THE GUIDE UNDER REVIEW

<!-- guide: new-york-sales-tax · version: new-york-sales-tax@2026-04-13T17:56:20.564Z -->

---
name: new-york-sales-tax
description: Use this skill whenever asked about New York sales and use tax, NYS DTF filings, NYC sales tax, New York exemptions, New York clothing exemption, New York nexus, or any request involving New York state sales and use tax compliance. Trigger on phrases like "New York sales tax", "NY sales tax", "NYC sales tax", "DTF", "ST-100", "New York clothing exemption", "New York resale certificate", or any request involving New York sales and use tax classification, filing, or compliance. ALWAYS read this skill before touching any New York sales tax work.
jurisdiction: US-NY
domain: vat-gst
tax_year: 2025
---

# new-york-sales-tax

## Section 1 -- Quick reference

**Quick reference table**

| Field | Value |
| --- | --- |
| Jurisdiction | New York, United States |
| Jurisdiction code | US-NY |
| Tax type | Sales and Use Tax (state + local) |
| State rate | 4.00% |
| Local rate range | 3.00% -- 4.875% |
| MCTD surcharge | 0.375% (Metropolitan Commuter Transportation District) |
| Maximum combined rate | 8.875% (New York City) |
| Sourcing | Destination-based |
| Economic nexus | $500,000 revenue AND 100 transactions (AND test -- both must be met) |
| Nexus test type | AND test -- unique among states; most use OR |
| Measurement period | Prior four sales tax quarterly periods (NOT calendar year) |
| Primary legislation | New York Tax Law, Articles 28 and 29 |
| Tax authority | New York State Department of Taxation and Finance (NYS DTF) |
| Filing portal | https://www.tax.ny.gov |
| SST member | No |
| Return form | ST-100 (quarterly); ST-810 (monthly); ST-809 (part-quarterly) |
| Quarterly periods | March-May, June-August, September-November, December-February (NOT calendar quarters) |
| Quarterly deadline | 20th of month following quarter end |
| Vendor discount | Up to 5% of first $1,200,000 collected per quarter; max $200/quarter |
| Federal framework skill | us-sales-tax |
| Skill version | 2.0 |

**CRITICAL: New York sales tax quarters do NOT align with calendar quarters. They start March 1.**

## Section 2 -- Required inputs and refusal catalogue

### Required inputs

**Required inputs table**

| # | Question | Why it matters |
| --- | --- | --- |
| 1 | Certificate of Authority number? | Required for filing; confirms NYS DTF registration |
| 2 | Assigned filing frequency (quarterly, monthly/part-quarterly, annual, PrompTax)? | Determines due dates and payment schedules |
| 3 | Nexus type (physical, economic, both)? | NY requires BOTH $500K AND 100 transactions |
| 4 | Sell through marketplace facilitators? | Marketplace facilitators collect on facilitated sales |
| 5 | Make sales in MCTD (NYC, Rockland, Westchester, Dutchess, Orange, Putnam, Nassau, Suffolk)? | 0.375% MCTD surcharge; separate schedule ST-100.3 |
| 6 | Sell clothing or footwear? | Items under $110/item exempt from state and NYC tax |
| 7 | Annual sales tax liability over $500,000? | PrompTax (accelerated EFT) may be required |
| 8 | Sell software, SaaS, or digital products? | SaaS taxable in NY as pre-written software |

### Refusal catalogue

- **R-NY-1 -- Film production credit purchases** — Empire State Film Production tax exemptions require qualifying certificates from Empire State Development. Escalate to reviewer.
- **R-NY-2 -- Real property capital improvement vs. repair** — The distinction between exempt capital improvements and taxable repairs requires professional judgment. Escalate to reviewer.

## Section 3 -- Transaction pattern library

### 3.1 Tangible personal property

**Tangible personal property table**  _(Tax Law Section 1105(a))_

| Pattern | Taxable? | Notes |
| --- | --- | --- |
| General TPP (electronics, appliances, furniture, equipment) | TAXABLE | Tax Law Section 1105(a) |

### 3.2 Clothing and footwear -- KEY EXEMPTION

**Clothing and footwear table**

| Pattern | Taxable? | Notes |
| --- | --- | --- |
| Clothing/footwear under $110 per item | EXEMPT | State and NYC local tax exempt; per-ITEM threshold, NOT per transaction |
| Clothing/footwear $110 or more per item | TAXABLE | Full combined rate applies |
| Costume accessories (cuff links, tiara) | TAXABLE | Not qualifying clothing |
| Sport/recreational equipment (ski boots, cleats) | TAXABLE | Not qualifying clothing |
| Protective equipment (hard hats, safety goggles) | TAXABLE | Not qualifying clothing |

**The clothing exemption is PERMANENT and year-round. New York does NOT have a temporary sales tax holiday.**

**Non-NYC counties:** Some counties do NOT exempt clothing from local tax. Verify county-specific rules for non-NYC locations.

### 3.3 Food and beverages

**Food and beverages table**

| Pattern | Taxable? | Citation |
| --- | --- | --- |
| Grocery food (unprepared, for home consumption) | EXEMPT | Tax Law Section 1115(a)(1) |
| Prepared food (heated, served on-premises) | TAXABLE | Tax Law Section 1105(d) |
| Candy and confections | TAXABLE | Tax Law Section 1115(a)(1) exception |
| Carbonated beverages / soft drinks | TAXABLE | Tax Law Section 1115(a)(1) exception |
| Bottled water (non-carbonated) | EXEMPT |  |
| Dietary supplements | EXEMPT |  |
| Alcoholic beverages | TAXABLE |  |
| ALL food/drink sold by restaurants | TAXABLE | Restaurant context overrides grocery exemption |

- **Restaurant rule** — ALL food and drink sold by restaurants becomes TAXABLE, including otherwise exempt items like bottled water.  _(Tax Law Section 1105(d))_

### 3.4 SaaS and digital goods

**SaaS and digital goods table**

| Pattern | Taxable? | Notes |
| --- | --- | --- |
| Canned software (any delivery method) | TAXABLE | Tax Law Section 1101(b)(6) |
| Custom software (any delivery) | EXEMPT | Not TPP |
| SaaS (cloud-hosted, no download) | TAXABLE | Pre-written software accessed remotely; TSB-A-13(22)S |
| Digital music, movies, books (download) | TAXABLE | TPP equivalents |
| Streaming services | TAXABLE | Information service or entertainment |

**New York clearly taxes SaaS as a sale of pre-written computer software.**

### 3.5 Services

**Services table**

| Pattern | Taxable? | Citation |
| --- | --- | --- |
| Information services | TAXABLE | Tax Law Section 1105(c)(1) |
| Processing and printing | TAXABLE | Tax Law Section 1105(c)(2) |
| Installation, maintenance, repair of TPP | TAXABLE | Tax Law Section 1105(c)(3) |
| Storage | TAXABLE | Tax Law Section 1105(c)(4) |
| Interior decorating/design | TAXABLE | Tax Law Section 1105(c)(5) |
| Protective/detective services | TAXABLE | Tax Law Section 1105(c)(6) |
| Trash removal (commercial) | TAXABLE | Tax Law Section 1105(c)(7) |
| Credit rating/reporting | TAXABLE | Tax Law Section 1105(c)(8) |
| Telephone/telegraph services | TAXABLE | Tax Law Section 1105(b)(1) |
| Professional services (legal, accounting, medical, consulting) | NOT TAXABLE | Not enumerated |
| Advertising | NOT TAXABLE |  |
| Education | NOT TAXABLE |  |
| Janitorial / personal care | NOT TAXABLE |  |

### 3.6 Manufacturing and exemptions

**Manufacturing and exemptions table**

| Pattern | Taxable? | Citation |
| --- | --- | --- |
| Manufacturing equipment (directly and predominantly 50%+ in production) | EXEMPT | Tax Law Section 1115(a)(12) |
| Fuel/utilities for manufacturing | EXEMPT | Tax Law Section 1115(c) |
| Farm equipment | EXEMPT | Tax Law Section 1115(a)(6) |
| Resale (valid ST-120) | EXEMPT | Tax Law Section 1101(b)(4) |
| Interstate commerce (shipped out of state) | EXEMPT | Tax Law Section 1115(a)(8) |
| Federal government sales | EXEMPT | Tax Law Section 1116(a)(1) |
| Prescription drugs | EXEMPT | Tax Law Section 1115(a)(3) |
| OTC drugs | TAXABLE | No OTC exemption in NY |
| Newspapers and periodicals | EXEMPT | Tax Law Section 1115(a)(5) |

## Section 4 -- Rate lookup

### 4.1 Key combined rates

**Key combined rates table**

| Jurisdiction | Combined rate | Breakdown |
| --- | --- | --- |
| New York City (5 boroughs) | 8.875% | 4% state + 4.5% city + 0.375% MCTD |
| Westchester County | 8.375% | 4% + 4% + 0.375% MCTD |
| Nassau County | 8.625% | 4% + 4.25% + 0.375% MCTD |
| Suffolk County | 8.625% | 4% + 4.25% + 0.375% MCTD |
| Albany County | 8.00% | 4% + 4% |
| Erie County (Buffalo) | 8.00% | 4% + 4% |

### 4.2 MCTD counties

NYC, Rockland, Westchester, Dutchess, Orange, Putnam, Nassau, Suffolk -- 0.375% surcharge applies in all.

### 4.3 Sourcing

**Sourcing table**

| Scenario | Rate applied |
| --- | --- |
| Shipped goods | Delivery address rate |
| Customer pickup | Seller's location rate |
| Remote sellers | Destination-based |

## Section 5 -- Classification rules

### 5.1 General rule

- **General taxation rule** — New York taxes: (a) retail sales of TPP, (b) enumerated services, (c) restaurant food/drink, (d) hotel occupancy, (e) admissions.  _(Tax Law Section 1105)_

### 5.2 Clothing per-item threshold

- **Clothing per-item threshold rule** — The $110 exemption is per ITEM, not per transaction. A $109 shirt and a $115 jacket in the same transaction: shirt is exempt, jacket is taxable.

### 5.3 Restaurant override

- **Restaurant override rule** — All food at restaurants is taxable regardless of individual item exemption status. A bottle of water at a grocery store is exempt; the same bottle at a restaurant is taxable.

## Section 6 -- Return form and filing

### 6.1 Forms

**Forms table**

| Form | Use |
| --- | --- |
| ST-100 | Quarterly return |
| ST-100.3 | MCTD schedule |
| ST-100.7 | Sub-jurisdiction detail |
| ST-810 | Monthly return (large filers) |
| ST-809 | Part-quarterly monthly payment |
| ST-120 | Resale certificate |
| ST-119/ST-119.1 | Exempt organization certificates |
| ST-124 | Capital improvement certificate |

### 6.2 Filing deadlines (NON-CALENDAR QUARTERS)

**Filing deadlines table**

| Quarter | Period | Due date |
| --- | --- | --- |
| Q1 | March 1 -- May 31 | June 20 |
| Q2 | June 1 -- August 31 | September 20 |
| Q3 | September 1 -- November 30 | December 20 |
| Q4 | December 1 -- February 28/29 | March 20 |

### 6.3 PrompTax

**PrompTax table**

| Parameter | Value |
| --- | --- |
| Threshold | Annual liability > $500,000 |
| Method | EFT within 3 business days of each PrompTax period |
| Returns | Still filed quarterly |

## Section 7 -- Thresholds, penalties, and deadlines

### 7.1 Economic nexus

**Economic nexus table**  _(Tax Law Section 1101(b)(8)(iv))_

| Parameter | Value |
| --- | --- |
| Revenue threshold | $500,000 gross receipts from TPP delivered in NY |
| Transaction threshold | 100 transactions delivering TPP in NY |
| Test type | AND -- BOTH must be met |
| Measurement period | Prior four sales tax quarterly periods |
| Marketplace exclusion | Marketplace sales do not count |
| Authority | Tax Law Section 1101(b)(8)(iv) |

### 7.2 Marketplace facilitator

**Marketplace facilitator table**  _(Tax Law Section 1101(b)(8)(vi))_

| Rule | Detail |
| --- | --- |
| Effective date | June 1, 2019 |
| Facilitator treated as | Vendor for tax purposes |
| Authority | Tax Law Section 1101(b)(8)(vi) |

### 7.3 Penalties

**Penalties table**

| Penalty | Rate | Citation |
| --- | --- | --- |
| Late filing | 10% of tax due (max) | Tax Law Section 1145(a)(1) |
| Late payment | 10% of tax due (max) | Tax Law Section 1145(a)(1) |
| Fraud | 50% of deficiency | Tax Law Section 1145(a)(2) |
| Interest | Set quarterly by DTF | Tax Law Section 1142 |

### 7.4 Record retention

**Record retention table**

| Parameter | Value |
| --- | --- |
| Period | 3 years from due date or filing date (whichever later) |
| Statute of limitations (standard) | 3 years |
| No return filed | No limitation |
| Fraud | No limitation |
| 25%+ understatement | 6 years |

## Section 8 -- Edge cases

### EC1 -- Clothing at $110 boundary

**Situation:** Customer buys $109 shirt and $115 jacket.
**Resolution:** Shirt ($109) is EXEMPT. Jacket ($115) is TAXABLE at full rate. Per-item, not per-transaction.

### EC2 -- SaaS taxability

**Situation:** Business subscribes to cloud-based CRM (no download).
**Resolution:** TAXABLE. NY treats SaaS as pre-written software. TSB-A-13(22)S.

### EC3 -- Restaurant bottled water

**Situation:** Customer orders bottled water at a restaurant.
**Resolution:** TAXABLE. Restaurant context overrides the grocery food exemption.

### EC4 -- Economic nexus AND test

**Situation:** Out-of-state seller: $600K revenue, 80 transactions.
**Resolution:** No nexus. Revenue exceeds $500K but transactions (80) do not exceed 100. NY requires BOTH.

### EC5 -- Non-NYC county clothing

**Situation:** Vendor in Saratoga County asks about clothing exemption on local tax.
**Resolution:** State exemption (under $110) applies statewide. Some counties may not exempt local tax. Verify county-specific rules.

### EC6 -- Capital improvement vs. repair

**Situation:** Contractor performs work on a building.
**Resolution:** Capital improvements (Form ST-124) are EXEMPT. Repairs are TAXABLE under Section 1105(c)(3). Requires professional judgment.

## Section 9 -- Test suite

### Test 1 -- Clothing under $110 in NYC

**Input:** $95 shoes in Manhattan. NYC rate: 8.875%.
**Expected:** Tax = $0. Clothing under $110 exempt.

### Test 2 -- Clothing over $110 in NYC

**Input:** $200 jacket in Manhattan.
**Expected:** Tax = $17.75. Full rate applies.

### Test 3 -- Grocery food exempt

**Input:** $100 groceries (bread, milk, produce) from a supermarket.
**Expected:** Tax = $0.

### Test 4 -- SaaS subscription in NYC

**Input:** $100/month SaaS tool. NYC rate 8.875%.
**Expected:** Tax = $8.88. SaaS is taxable.

### Test 5 -- Economic nexus AND test (not met)

**Input:** $600K revenue, 80 transactions.
**Expected:** NO nexus. Both thresholds not met.

### Test 6 -- Economic nexus AND test (met)

**Input:** $600K revenue, 150 transactions.
**Expected:** HAS nexus. Both exceeded.

### Test 7 -- Restaurant meal in NYC

**Input:** $50 dinner at NYC restaurant.
**Expected:** Tax = $4.44. All restaurant food taxable.

### Test 8 -- Manufacturing equipment in Buffalo

**Input:** $200K machine for production. Erie County rate: 8%.
**Expected:** Tax = $0. Manufacturing exemption.

### Test 9 -- Use tax on out-of-state purchase

**Input:** NYC business buys $5,000 furniture from NH retailer. No tax collected.
**Expected:** Use tax = $443.75.

### Test 10 -- Resale certificate

**Input:** Retailer purchases $10K inventory. Valid ST-120 provided.
**Expected:** No tax. Retailer collects at resale.

## Section 10 -- Prohibitions

- NEVER apply the $110 clothing exemption per transaction -- it is per ITEM.
- NEVER use calendar quarters for New York sales tax -- NY quarters start March 1.
- NEVER accept SST certificates in New York -- NY is not an SST member.
- NEVER assume economic nexus with only the revenue threshold -- NY requires BOTH $500K AND 100 transactions.
- NEVER treat SaaS as nontaxable in New York.
- NEVER treat restaurant food as exempt -- all food/drink at restaurants is taxable.
- NEVER assume the clothing exemption applies to local tax in all counties.
- NEVER confuse capital improvements (exempt) with repairs (taxable).
- NEVER assume OTC medicine is exempt in New York.
- NEVER compute any number -- all arithmetic is handled by the deterministic engine, not Claude.

## Disclaimer

This skill is provided for informational and computational purposes only and does not constitute tax, legal, or financial advice. All outputs must be reviewed by a qualified professional (CPA, EA, or tax attorney) before filing.

## Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

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