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New York Small Business Tax Guide
New York sales tax in the Tax Department's words and federal tax points from IRS pages, as an educational overview rather than tax advice.
Disclaimer: This page is educational content only. Tax laws change, and your situation may differ. It is not legal, tax, or financial advice. Consult a qualified professional licensed in New York before making filing or planning decisions.
Tax landscape for small businesses
This page draws its New York figures from the New York State Department of Taxation and Finance (the Tax Department) and its federal figures from IRS pages. New York income tax rates aren't quoted here, because the Tax Department publishes them as separate yearly tables; get the table for your year from the department.
The Tax Department's bulletin on sales tax rates (New York, page last reviewed or updated April 6, 2026) says "The combined rate equals the state rate (currently 4%) plus any local tax rate imposed by a city, county, or school district (plus the MCTD rate, if applicable)." It adds: "An additional ⅜% (0.375%) sales tax applies to taxable sales within the MCTD."
Which rate you collect depends on where the sale ends up. The department's rate lookup page (New York, updated September 24, 2019) says "New York's retail sales tax is a destination tax." and "The point of delivery or the point at which possession is transferred by the seller to the purchaser determines the rate of tax to be collected."
Before your first sale, its registration page (New York, updated July 25, 2025) says "Every person who sells taxable tangible personal property or taxable services (even if you make sales from your home, are a temporary vendor, or only sell once a year) must register with the Tax Department through New York Business Express before beginning business."
Worked example, with sample figures: a $1,500.00 taxable sale carries $60.00 of state tax at "the state rate (currently 4%)" in the Tax Department's bulletin (New York, page last reviewed or updated April 6, 2026), 1,500.00 × 0.04, for $1,560.00 before any local tax. The same bulletin adds "any local tax rate imposed by a city, county, or school district", so look up the combined rate for the delivery address before you invoice.
Tax overview
Each row lists a tax area and its notes. Confirm current figures with your state's tax agency or the IRS.
| Tax type | Rate or basis | Notes |
|---|---|---|
| Sales tax, state rate | "the state rate (currently 4%)" | Tax Department sales tax rate bulletin (New York, page last reviewed or updated April 6, 2026): "The combined rate equals the state rate (currently 4%) plus any local tax rate imposed by a city, county, or school district (plus the MCTD rate, if applicable)." |
| MCTD sales tax | "⅜% (0.375%)" | Same bulletin (New York, page last reviewed or updated April 6, 2026): "An additional ⅜% (0.375%) sales tax applies to taxable sales within the MCTD." "New York City and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester are in this district." |
| Sales tax registration | "before beginning business" | Tax Department registration page (New York, updated July 25, 2025): "Every person who sells taxable tangible personal property or taxable services (even if you make sales from your home, are a temporary vendor, or only sell once a year) must register with the Tax Department through New York Business Express before beginning business." |
| Federal self-employment tax | "15.3%" | The IRS self-employment tax page (In the US (federal), last reviewed or updated October 30, 2026): "The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance)." |
Filing requirements
This list isn't a complete checklist for your business.
Register to collect sales tax
The Tax Department's registration page (New York, updated July 25, 2025) says "Every person who sells taxable tangible personal property or taxable services (even if you make sales from your home, are a temporary vendor, or only sell once a year) must register with the Tax Department through New York Business Express before beginning business."
Charge the rate where the sale is delivered
The Tax Department's rate lookup page (New York, updated September 24, 2019) says "The point of delivery or the point at which possession is transferred by the seller to the purchaser determines the rate of tax to be collected."
Sellers with no New York location
The Tax Department's page for businesses with no physical presence in the state (New York, last reviewed or updated July 29, 2026) says "A person is presumed to be regularly or systematically soliciting business in the state if, for the immediately preceding four sales tax quarters: the cumulative total of the person's gross receipts from sales of tangible personal property delivered into the state exceeded $500,000, and such person made more than 100 sales of tangible personal property delivered in the state." Such a business, it says, "must register as a New York State vendor."
Taking an exemption certificate
The Tax Department's bulletin on exemption certificates (New York, last reviewed or updated October 16, 2026) says "A properly completed exemption certificate accepted in good faith protects the seller from liability for the sales tax not collected from the purchaser." On timing: "A purchaser must give the seller the properly completed certificate within 90 days of the time the sale is made, but preferably at the time of the sale."
Federal estimated tax
The IRS estimated taxes page (In the US (federal), last reviewed or updated September 25, 2026) says "Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed." It adds: "For estimated tax purposes, the year is divided into four payment periods."
Deductions and write-offs
Confirm with your state how it treats each item.
- Employer-equivalent SE tax: the IRS self-employment tax page (In the US (federal), last reviewed or updated October 30, 2026) says "You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income."
- Your records system: the IRS recordkeeping page (In the US (federal), last reviewed or updated May 1, 2026) says "You may choose any recordkeeping system suited to your business that clearly shows your income and expenses."
Practical tips
- Find the rate for each address. The Tax Department's rate page (New York, updated September 24, 2019) points to its "Jurisdiction/Rate Lookup By Address" tool.
- Know the MCTD area. The rate bulletin (New York, page last reviewed or updated April 6, 2026) says "New York City and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester are in this district."
- Store the combined rate once. Billed's invoice software page says "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates."
- File purchases by type. Billed's expense tracking page says "Give every expense a category so your spending is already sorted when you file taxes or hand the year to your accountant."
Frequently asked questions
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At a glance
| Topic | What the Tax Department or the IRS says |
|---|---|
| State sales tax | "the state rate (currently 4%)" (rate bulletin, New York, page last reviewed or updated April 6, 2026) |
| MCTD | "An additional ⅜% (0.375%) sales tax applies to taxable sales within the MCTD." (rate bulletin, New York, page last reviewed or updated April 6, 2026) |
| Where tax is set | "New York's retail sales tax is a destination tax." (rate lookup page, New York, updated September 24, 2019) |
| Self-employment tax | "The self-employment tax rate is 15.3%." (IRS, In the US (federal), last reviewed or updated October 30, 2026) |
When this isn't for you
Covers New York State sales tax basics and federal points for small sellers. New York City and Yonkers income taxes, payroll, the corporate franchise tax and audits are left out; ask the Tax Department or a tax professional.