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Jul 21, 2009

New York City Increases Sales Tax on August 1, 2009

by J. Robert Burgoyne — last modified Jul 22, 2009 12:00 PM
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NYC is increasing the sales and use tax rate from 8.375% to 8.875% on August 1, 2009. Read below for an explanation and links to more information.

 

ny-sales-tax-increase-2009-07-22.jpgTrue Blade received a postcard from the State of New York Department of Taxation and Finance, announcing an increase in the NYC sales and use tax to 8.875%.

That's an increase of almost 6% from the prior rate of 8.375%.

The 8.375% rate is the sum of 3 different taxes:

Tax Name
Tax Rate
NY State Tax
4.000%
Metropolitan Commuter
Transportation District (MCTD*) Tax**
0.375%
New York City Local Tax
4.500%

Total Sales and Use Tax in NYC:

8.875%


According to the postcard, sales of clothing and footwear costing less than $110 are fully exempt from taxes. It's impressive in an anti-societal way that in 2009 the clothing manufacturers and resellers have sufficiently strong political connections to keep this exemption. There is no similar sales tax exemption for computer services such as Internet domain registrations or email service from a commercial vendor.

For more information go to www.nystax.gov and look for Important Notice N-09-12.

Click here for a larger version of the postcard scan.


* The MCTD consists of the five boroughs of New York City and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.

** Earlier this year we received notice of a new, related tax, the:

Metropolitan Commuter Transportation Mobility Tax

This tax is an additional 0.34% of payroll expense for employers to pay for employees employed within the MCTD, once payroll expense exceeds $2,500 in any calendar quarter, effective March 1, 2009. It also applies to self-employment earnings of $10,000 or more for the tax year.

From the notice: "The Metropolitan Commuter Transportation Mobility Tax is a new tax imposed on certain employers and self-employed individuals engaging in business within the Metropolitan Commuter Transportation District (MCTD)".

New York City and State are a seriously large bureaucracy that finds ever new ways to tax, without any consideration for responsible fiscal planning. Thinking people should reflect on how this can be gradually turned around, one step at a time, so that the system stops working against our collective interests.