New York State Sales Tax headaches for a clothing retailer
October 11, 2012 1:05 PM Subscribe
How do you handle the labyrinth of New York State sales tax? I'm launching an online business that sells goods (some clothes, some non-clothes). We're located in New York State. We need to collect tax in New York State... gorey details inside.
posted by Muffy to Work & Money (8 answers total)
New York State does not charge sales tax on clothing under $110.
Certain municipalities do - usually around 4%, but it varies by county, there's a list of about 50 counties that you can get from the NYS taxation website.
Non clothing items are taxable at the rate of the municipality, plus the NYS rate.
If we're selling (for example on eBay) we can set the tax on a per-state basis, but not a per-county basis. Our own online store, the web developers tell us, is also on a per-state basis. eBay is even worse because we can't change the tax rate on a per-item basis.
So how do people do this? We cannot over-charge people for tax, that wouldn't be correct (or legal). Do we simply eat the tax in New York State and pay it out of revenue? What do people do in this situation? We expect a significant portion of our customers to be located in New York (since we have a bricks & mortar store here) and would prefer not to reduce our profits on so many of our customers.
We have consulted with an accountant, they simply made us aware of the issues and how we solve this problem is up to us.