Rates

• The New York State Department of Taxation and Finance defines the use tax as a "tax imposed on taxable items or services used in New York when the sales tax has not been paid." Purchases made over the Internet may be subject to use tax. New York state use and sales taxes are 4 percent at the time of publication, in addition to local rates charged by various jurisdictions, including a county, municipality or school district where any transaction takes place.
  
  

Taxable Items

• Sales and use taxes must be charged for tangible personal property; utilities, including electric, gas, telephone and steam; and beverages and food sold in restaurants, bars or by caterers. Hotels must charge sales tax on room occupancy, and admission to various entertainment entities must also charge tax. Other selected services also fall under the sales and use tax umbrella. Depending on the district, footwear and clothing may or may not be taxed. New York City does impose a tax on these items.
  
  

Exemptions

• Exemptions for New York state sales and use tax include property rentals, property improvements and property resales; medical care; food sold by grocery stores and supermarkets for home consumption and nonprescription and prescription medication. With the exception of New York City, most personal services are exempt, and professional services are exempt throughout the state. Sales made to nonprofit 501(c) organizations and state or federal agencies are exempt.
  
  Many items involved in manufacturing or business are tax-exempt, including machinery, tools, equipment and supplies used in manufacturing; fuels and utilities used in manufacturing; and tangible personal property and utility sales used in research and development.
  
  

Identifying the Jurisdiction

• The state retail sales tax is a "destination tax." This means that the delivery point or the area in which the item transfers possession from vendor to buyer determines the particular tax rate for collection purposes. Any sales delivered outside of the state are tax-exempt.