Under $110 per item
Clothing and footwear priced under $110 per item are exempt from NY state and NYC local sales tax.
The clothing exemption at a glance
One item at a time
Two $90 shirts are both tax-free. A single $150 jacket is taxed at the full 8.875%.
NYC in, some counties out
NYC fully participates. Not every county elects the exemption — different rules apply outside the five boroughs.
An easy-to-miss NYC rule
Small carve-out with meaningful savings for families
If you have furnished stores in NYC now or in the past, you might have observed a certain category of items in which the clothing is exempted from tax. It’s interesting to note that even people who have lived in the city for a long time have no clue that certain clothing items are tax free.
01The rule
The clothing tax exemption rule
The availability of clothing and footwear below $110 dollars is exempt from sales tax — a policy by the New York State Government. In NYC too, the policy is in place and no state and local government tax is levied.
Presumably, the idea is to encourage people to buy necessities of life which are essential, particularly for the people who have a large family and need to spend a lion’s share of their budget on clothing.
02Why $110?
The $110 threshold — per item, not per receipt
Two × $90 shirts
$0 tax
Two shirts at $90 each — both tax-free. Threshold is per item, so multiple items below $110 each clear the exemption independently.
One × $150 jacket
8.875%
One jacket at $150 — taxed at the full NYC rate of 8.875% on the whole price. The threshold does not apply piecewise; cross $110 and the entire item is taxed.
03Policy reasoning
Why the exemption exists
The exemption was created to ease the burden of the cost of living for lower and middle-income households. It was also aimed at streamlining the purchasing process for clothing for these demographics.
The purchase of clothing is necessary for living and taxing it at high city rates would severely burden residents.
04Beyond NYC
Does it apply everywhere in NY?
NYC fully in
Not every county in New York opts for this exemption. While NYC fully participates, some counties charge local tax on clothing even at less than $110. If you are shopping outside the five boroughs, bear in mind the local tax rules.
05Bottom line
A friendly policy for essentials
The clothing exemption in NYC is a friendly policy aimed at reducing the burden of spending on necessities. The next time you are shopping in the city, bear in mind the exemption rule — you could save some money.
Understand NYC sales tax rules better
Our dedicated team stands ready for expert assistance on exemptions and compliance for your business or personal taxes. Call (212) 641-0673 or send the contact form.
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On staying on top of NY sales tax rules
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NYC sales tax questions
Ask us about NYC exemptions and compliance
If you’re a retailer needing to apply the exemption correctly, or a shopper wondering what qualifies, we’ll walk you through it. Call (212) 641-0673 or send the contact form. No charge for the conversation.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years advising New York businesses and individuals. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.