New York Consumer Tax Laws
Tax laws and codes can seem daunting and complex. But it's helpful if you think of state taxation as two basic types of consumer tax laws: those for state revenue, and those aiming to discourage certain behaviors.
New York consumer tax laws include both types -- including sales tax that affects everyone in the state and relatively excessive cigarette taxes. Liquor and gasoline taxes also are relatively high, in an attempt to limit their consumption as well as raise revenue.
New York's consumer tax laws are listed in short form within the table below, while a more in-depth look follows. See State Tax Laws for more general information, and check with your local municipality for county and city taxes.
|Sales Tax||Purchases above $110 subject to 4% State Sales Tax, 4.5% New York City sales tax|
|Cigarette Tax||$4.35/pack of 20 cigarettes State, plus additional $1.50 in New York City for a total of $5.85 per pack|
|Gasoline Tax per Gallon||68.2¢ (including federal tax rate of 18.4¢|
|Liquor Tax||Beer 14¢/gal. state, plus NYC 12¢; Still and sparkling wine 30¢/gal. (natural); Spirits <24% $1.70 per liter state, plus 26¢; Spirits >24% 67¢ per liter|
|Gambling Tax||3% admission tax for horse racing; 4% of pool on regular bets §§406, 229|
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.
Purpose of Consumer Taxes
Some consumer taxes are meant to help pay for local services like the police and fire department. For those services that benefit everybody, the state usually uses a universally applied tax like a sales tax, to gain revenue. Some other taxes come in the form of excise taxes. Excise taxes are directed at a certain product or service. For example, gasoline taxes are generally used to pay for road maintenance and repairs. The idea is that the more gasoline you purchase, the more you drive, and the more damage your car causes to the road. It would be unfair for non-drivers to have to pay to maintain roads that they do not use. Other excise taxes are meant to discourage unwanted behavior. Cigarette taxes are extremely high in New York, because the state wants to severely discourage smoking given its dangers to the smoker and others, and the trash it creates.
New York places a state sales tax of 4% on purchases above $110. On top of that, New York City places a 4.5% tax on all purchases.
Smokers in New York State know that the state has one of the highest taxes on cigarettes throughout the country. The state itself places a $4.35 excise tax on each pack of cigarettes. New York City places a $1.50 tax on each pack of cigarettes, totaling a $5.85 tax per pack of cigarettes.
New York state places a 42.4 cent per gallon tax on gasoline. This is in addition to the federal gasoline tax rate of 18.4 cents per gallon.
New York state places a 14 cent per gallon tax on beer, and NYC places a 12 cent per gallon tax on top of that. Wine has a 30 cent per gallon tax. Hard alcohol with an alcohol content of less than 24% incurs a state tax of $1.70 per liter plus 26 cents in NYC. Hard alcohol with an alcohol content over 24% has an additional tax of 67 cents per liter. Different states have different tax laws, which is why many New Yorkers purchase alcohol at the border before entering the state.
Avoiding Consumer Taxes
If you want to purchase an expensive item, you may try to buy that item in a state that does not collect sales tax. However, when you bring that item into New York, you may have to pay a use tax of 8.875%.
Get a Free Initial Case Assessment
An ounce of prevention is worth a pound of cure, particularly when it comes to taxes. Missteps can result in costly fines or lost opportunities for savings. Contact a qualified local attorney for a free initial case assessment to discuss how they can help you make the right tax decisions or handle tax problems.