Many of our clients do business in both New York and New Jersey, and the two states handle sales tax quite differently. Here is an overview to help you ask the right questions.
New York: state rate plus local rates
New York's statewide sales tax rate is 4%, and counties and cities add their own local rates on top. In New York City the combined rate is 8.875%, which includes the state rate, the city rate and the Metropolitan Commuter Transportation District surcharge. Rates elsewhere vary by county, so the rate you charge depends on where the sale is delivered.
New Jersey: one statewide rate (mostly)
New Jersey's sales tax rate is 6.625% statewide, with limited exceptions such as certain Urban Enterprise Zones. That makes rates simpler, but the rules about which products and services are taxable still matter.
Registering before you sell
In both states, businesses that make taxable sales need to register with the state tax department before they start collecting tax. In New York you'll receive a Certificate of Authority; in New Jersey you'll register through the state's business registration process.
Filing frequency
Each state assigns a filing schedule based on how much tax you collect. Many small businesses file quarterly, while larger sellers file more often. Missing a return, even one with zero sales, can lead to penalties.
Common mistakes we see
- Charging the wrong local rate for deliveries in New York.
- Assuming services are never taxable. Some services are taxable in one state but not the other.
- Forgetting to file "zero" returns during slow periods.
- Mixing sales tax collected with regular revenue, then coming up short at filing time.
Sales tax filing is included in our Monthly Gardening plan. We track what you collect, keep it separate in your books, and file on time.
This article is general information, not tax, legal or financial advice. Rules and rates change; confirm the details for your situation with the appropriate agency or a qualified professional.