Last verified: May 14, 2026
If you live in New York City, every receipt you get is a small civics lesson. The 8.875% sales tax is the headline number, but it is only one of about a dozen taxes, surcharges, and fees that the State of New York and the City of New York are allowed to attach to ordinary purchases. Some are obvious. Many are not. And as of January 2026, a new Mayor and a newly aggressive Department of Consumer and Worker Protection (DCWP) have changed how restaurants, hotels, gyms, and subscription services are allowed to disclose those add-ons at the register.
This is the cost-mechanics version of the answer to “what am I actually paying?” — with the exact rates, the phone numbers to call when a merchant gets it wrong, and the forms to use when you want your money back.
The Headline: NYC’s Combined Sales Tax Is 8.875%
The total combined sales and use tax rate in New York City is 8.875%. The City of New York and the New York State Department of Taxation and Finance both publish this rate as the official number, and it has not changed for ordinary retail purchases. The 8.875% is built from three pieces stacked on top of one another:
- 4.0% — New York State sales and use tax
- 4.5% — New York City local sales and use tax
- 0.375% — Metropolitan Commuter Transportation District (MCTD) surcharge
The MCTD surcharge applies to taxable sales delivered inside the commuter district, which is NYC plus Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties. If a sale is delivered to your home in the city, all three pieces apply. (Source: New York State Department of Taxation and Finance, Tax Bulletin ST-825; NYC Department of Finance, “New York State sales and use tax.”)
What’s Exempt and What Isn’t
The simplest way to think about sales tax in New York is: it applies to most physical goods and a long list of services, with a handful of clearly exempt categories. The exemptions that matter most to everyday New Yorkers:
- Clothing and footwear under $110 per item are exempt from both the NYC and NY State portions of sales tax. The threshold is per item, not per receipt — you can buy ten $90 shirts and pay no sales tax on them. The moment a single item costs $110 or more, the full 8.875% applies to that item.
- Unprepared and packaged food sold by grocery stores is exempt. Dietary foods, health supplements, and most beverages sold by food markets are exempt.
- Diapers are exempt.
- Drugs and medicines for people, including prescription and most over-the-counter medications, are exempt. Medical equipment and supplies for home use are exempt. Prosthetic aids, hearing aids, and eyeglasses are exempt.
- Feminine hygiene products are exempt.
- Newspapers, magazines, and other periodicals are exempt.
- Laundering, dry cleaning, shoe repair, and veterinary medical services are exempt.
Things that are not exempt and routinely catch people off guard: prepared food and beverages (candy, soft drinks, alcohol, sandwiches, heated foods), hotel rooms, parking, gas and electricity for non-residential use, cleaning and maintenance services, gym and health-club memberships, and barber/beautician/manicure/massage services.
Parking in Manhattan: The 18.375% Trap
Parking is the single biggest rate New Yorkers encounter regularly. The state tax, city tax, MCTD surcharge, and a Manhattan-only city surtax all stack:
- 4.0% NY State tax
- 6.0% NYC local parking tax
- 0.375% MCTD surcharge
- = 10.375% combined rate for parking in any borough
- + 8.0% additional Manhattan-only parking surtax
- = 18.375% combined rate for parking in Manhattan
For a deeper look at how parking, personal-service, and car-rental surcharges stack together in the city, see our companion piece on NYC personal-services tax, parking, and car-rental surcharges. That extra 8% Manhattan surtax does not apply if you are a certified exempt Manhattan resident — meaning your car is registered in Manhattan, the car is for personal use, and you have applied for and received the Manhattan Resident Parking Tax Exemption from the NYC Department of Finance. The application and eligibility rules are at nyc.gov/site/finance/benefits/vehicles-manhattan-resident-parking-tax-exemption.page. The exemption is not automatic — you have to apply, you have to be approved, and the certificate has to be presented to the garage. (Source: NY State Tax Bulletin ST-825, “Parking services in New York City”; NYC Department of Finance.)
The Cigarette Tax: $5.35 State + $1.50 City Per Pack of 20
New York has the highest combined cigarette tax in the United States, and the math is more painful than most New Yorkers realize. There are two separate taxes per pack, plus the regular 8.875% sales tax on top of the retail price.
- New York State cigarette excise tax: $5.35 per pack of 20 cigarettes. This was raised from $4.35 effective September 1, 2023, and it has remained at $5.35 since. (Source: NY State Department of Taxation and Finance.)
- New York City cigarette tax: $1.50 per pack of 20 cigarettes — technically 75 cents for each ten cigarettes or fraction thereof, with packs over 20 cigarettes taxed at 38 cents per five additional. (Source: NYC Department of Finance, “Cigarette and other tobacco products tax.”)
- Combined state + city tax: $6.85 per pack before sales tax and before any wholesaler markup. A carton (10 packs) carries $68.50 in combined state and city tax.
If you buy untaxed cigarettes shipped from out of state, you owe the tax yourself and must file NYC’s Cigarette Tax Payment Form and NY State Form CG-15 (Cigarette Use Tax Return) within 24 hours. Failing to do so can lead to fines and criminal prosecution. The NYC 311 page on cigarette tax still shows the older $4.35 state figure as of this writing; the official current state rate is $5.35.
The Vape Tax: An Extra 20% on Top of Sales Tax
New York imposes a 20% supplemental sales tax on retail sales of vapor products — that is, on top of the 8.875% regular sales tax. The 20% is collected by the seller, who must be registered as a vapor products dealer with the state. The combined effective tax on a vape product sold in NYC is therefore 28.875%, not counting any wholesaler markup tied to the state tobacco tax structure. (Source: NY State Department of Taxation and Finance, TSB-M-19(3)S.)
Other Tobacco Products (OTP)
The NYC Department of Finance imposes a city-level Other Tobacco Products tax that is paid by wholesalers and passed through in the price. The published city rates:
- Cigars: $0.80 per individually packed cigar; in a package, $0.80 for the first cigar plus $0.175 for each additional cigar.
- Little cigars: $1.09 per pack.
- Smokeless tobacco: $0.80 per 1.2 oz., plus $0.20 for each additional 0.3 oz. or fraction.
- Snus: $0.80 per 0.32 oz., plus $0.20 for each additional 0.08 oz. or fraction.
- Shisha: $1.70 per 3.5 oz., plus $0.34 for each additional 0.7 oz. or fraction.
- Loose tobacco: $0.25 per 1.5 oz. package, plus $0.05 for each additional 0.3 oz. or fraction.
These are city-only taxes — state tobacco taxes apply separately. (Source: NYC Department of Finance.)
The Paper Bag Fee: 5 Cents Per Bag
If a merchant in New York City hands you a paper carryout bag at checkout, they are required to charge you a five-cent paper bag fee per bag — even if you did not buy any tangible personal property. The five cents is a fee, not a tax, authorized by the New York State Bag Waste Reduction Act. Plastic carryout bags are banned outright at most retailers under the same law. SNAP and WIC recipients are exempt from the paper bag fee. The current list of localities imposing the fee is in NY State Publication 718-B. (Source: NY State Tax Bulletin ST-825, “Paper carryout bag reduction fee.”)
The Hotel Unit Fee: $1.50 Per Night, On Top of Sales Tax and the Hotel Occupancy Tax
If you book a hotel room in New York City, you are paying at least four different things on top of the room rate:
- 4.0% NY State sales tax on the room
- NYC local sales tax on the room
- The NYC hotel room occupancy tax (administered by NYC Department of Finance — separate from sales tax)
- $1.50 per unit per day hotel unit fee, charged on every hotel room in NYC and reported on Schedule N
The $1.50/night hotel unit fee shows up on most NYC hotel folios as a separate line item. It is real, it is legal, and it is not negotiable. (Source: NY State TSB-M-05(2)S, “Fee on Hotel Occupancy in New York City.”)
NYC-Specific Personal-Service Taxes
New York City imposes its own 4.5% local sales tax on a list of personal services that the state does not tax statewide. If you get any of the following in NYC, the city portion of sales tax applies:
- Beauty, barbering, hair restoring
- Manicures, pedicures, electrolysis
- Tanning
- Massage services
- Tattooing and permanent make-up
- Weight-control salons, gymnasiums, Turkish and sauna baths, health and fitness clubs
- Credit-rating and credit-reporting services
If the salon, gym, or barber also sells physical products (shampoo, supplements, retail items), the full 8.875% applies to the product portion. If they only provide the service, only the city’s 4.5% applies — the state 4% does not. This split is one of the most common sources of receipt errors in the city. (Source: NY State Tax Bulletins TB-ST-60, TB-ST-329, TB-ST-554, TB-ST-575, TB-ST-615, TB-ST-855.)
Passenger Car Rentals: An Extra 12% on Top of Sales Tax
Renting a car in New York is expensive on purpose. Two state-level surcharges apply to passenger car rentals, on top of the regular state and local sales tax:
- 6% statewide special tax on short-term rentals (less than one year) of passenger cars rented in NY or rented elsewhere for use in NY.
- 6% special supplemental tax on all passenger car rentals, layered on top of the first 6%.
That is 12% in state-only surcharges before the 8.875% sales tax even starts. A rental car picked up in NYC at a $60/day base rate carries roughly $12.53 per day in stacked taxes and surcharges before airport facility fees and concession recovery charges. (Source: NY State TSB-M-09(1)S, TSB-M-09(6)S, TSB-M-19(1)S.)
The New Rule: Mamdani’s Junk Fee Crackdown (Executive Order 9, January 2026)
On January 5, 2026, Mayor Zohran Mamdani signed Executive Order 9, which directs the NYC Department of Consumer and Worker Protection (DCWP) to crack down on hidden junk fees. The order does three things: it establishes a Citywide Junk Fee Task Force chaired by Deputy Mayor of Economic Justice Julie Su and DCWP Commissioner Sam Levine; it directs DCWP to use its rulemaking authority to target deceptive hidden fees; and it directs DCWP to monitor, investigate, and enforce against violations.
A companion order, Executive Order 10, targets subscription tricks and traps — the practices that turn free trials into permanent charges, hide cancellation behind multiple screens, and bundle subscriptions into one-time purchases.
What this means at the register, today: existing NYC rules on fee disclosure are now actively being enforced again. The two most important rules to know are below. (Source: Office of the Mayor, “Mayor Mamdani Signs Executive Orders to Crack Down on Junk Fees,” January 5, 2026.)
Restaurant Surcharges: The Rule and the Loophole
Under 6 RCNY §5-59, a New York City restaurant cannot add a surcharge or other fee on top of listed food or beverage prices. The classic violations DCWP looks for: a “5% living wage fee,” a “20% administrative charge,” a “15% mandatory gratuity” buried in fine print. None of those are legal on a NYC restaurant check (tax is not a surcharge).
What is legal: a bona fide service charge that is conspicuously disclosed before food is ordered. Conspicuous means on a sandwich board, the menu itself, or a clearly visible sign — not the back of the menu, not in a hidden design element, not after you order. Examples of legal bona fide charges:
- A charge to split a single meal across multiple plates
- A per-person minimum charge
- A mandatory gratuity for parties of eight or more, if disclosed up front
If you see a surcharge that was not disclosed before you ordered, you can report it to DCWP by calling 311 or filing a complaint at nyc.gov/dca. The same enforcement machinery applies to wage-theft and paid-sick-leave complaints — see our walkthrough of how NY State and NYC actually enforce wage theft and paid sick leave violations for the parallel process. (Source: NYC DCWP Inspection Checklist, “Restaurant Surcharges and Mandatory Gratuities,” updated 08/2021; 6 RCNY §5-59.)
Credit Card Surcharges: NYC Rule 6 RCNY §5-24
If a merchant in NYC adds a fee for paying with a credit card, they have to display the higher credit-card price, not the lower cash price with a surcharge surprise at the register. They cannot put a sign on the wall that says “3% surcharge on credit cards” and then ring you up at the higher rate — the displayed price has to be the credit-card price, and the cash discount has to be shown alongside it if there is one. (Source: NYC DCWP General Retail Inspection Checklist, updated 04/2026; 6 RCNY §5-24.)
If a merchant runs a cash-only register or refuses cash entirely, that is also a violation in NYC — NYC Administrative Code §20-840 requires retailers to accept cash payments from consumers, with limited exceptions (they may refuse bills above $20; they may refuse cash for telephone, mail, or internet transactions). A consumer who pays in cash cannot be charged a higher price than a credit-card customer for the same item.
When You’re Overcharged Sales Tax: Form AU-11
If a merchant charges you sales tax on something that should have been exempt (clothing under $110, diapers, medicine, eyeglasses, etc.), or charges you the wrong rate, you can apply for a refund directly from the state. The form is Form AU-11, Application for Credit or Refund of Sales or Use Tax. You download it from tax.ny.gov/bus/ads/au11.htm, attach a copy of the receipt showing the incorrect tax, and mail it to the address printed on the form.
The phone line for the NY State Tax Information Center, which can help with AU-11 questions, is (518) 485-2889, Monday through Friday, 8 AM to 5 PM. If your refund question relates to state income tax instead, see the 2026 guide to NY State tax treatment of unemployment benefits, which covers the 1099-G, withholding mechanics, and how to avoid a surprise tax bill. The NYC Department of Finance also accepts complaints about merchants charging the wrong sales tax — call 311. (Source: NY State Department of Taxation and Finance Form AU-11; NYC311 article KA-01675, “Sales Tax.”)
FAQ
What is the sales tax rate in New York City in 2026?
The combined sales and use tax rate in New York City is 8.875%. That is 4.0% New York State tax, 4.5% New York City local tax, and 0.375% Metropolitan Commuter Transportation District surcharge.
Is clothing taxed in NYC?
Clothing and footwear under $110 per item is exempt from both NYC and NY State sales tax. Items priced at $110 or more are taxed at the full 8.875%.
How much tax is on a pack of cigarettes in NYC?
The combined state and city cigarette tax is $6.85 per pack of 20 cigarettes — $5.35 from New York State and $1.50 from New York City. The 8.875% sales tax also applies on top of the retail price.
What is the parking tax in Manhattan?
Parking in Manhattan is taxed at a combined rate of 18.375%, which is 4% state plus 6% NYC parking tax plus 0.375% MCTD plus an 8% Manhattan-only parking surtax. Certified Manhattan-resident permit holders pay 10.375%.
Is there a tax on vape products in New York?
Yes. New York imposes a 20% supplemental sales tax on vapor products, on top of the regular 8.875% sales tax. The combined effective tax is 28.875%.
Can a NYC restaurant add a service charge to my bill?
Only if it was conspicuously disclosed before you ordered — on the menu, a sandwich board, or a visible sign. Surcharges hidden on the back of the menu or added without disclosure are illegal under 6 RCNY §5-59.
How do I get a refund if I was charged the wrong sales tax?
File Form AU-11 (Application for Credit or Refund of Sales or Use Tax) with the New York State Department of Taxation and Finance. Download it at tax.ny.gov/bus/ads/au11.htm. Call (518) 485-2889 with questions.
Where to Get Help
- NYC 311 — Sales tax, cigarette tax, and consumer complaints. Call 311 or (212) 639-9675 from outside NYC.
- NYC Department of Consumer and Worker Protection — File a complaint about restaurant surcharges, hidden fees, or refused cash payments at nyc.gov/dca or call 311.
- NY State Department of Taxation and Finance, Business Tax Assistance — (518) 457-5342, Monday through Friday, 8 AM to 5 PM.
- NY State Tax Information Center — (518) 485-2889 for Form AU-11 and refund questions.
- NYC Department of Finance — For Manhattan Resident Parking Tax Exemption applications, cigarette and tobacco tax forms, and hotel occupancy tax.
Sales tax rates and rules change. The 8.87
