State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

New York State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

New York

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The Bottom Line
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Least Tax-Friendly

New York's state income taxes are only average for middle-class taxpayers. However, New York City and Yonkers tack on their own income taxes, and there's a commuter tax for people working in and around New York City. Things start to get bad when you look at sales taxes. The state sales tax rate is only 4%. But local taxes can add as much as 4.875% more. At 8.52%, New York's average combined state and local sales tax rate is the 10th-highest in the country, according to the Tax Foundation. And then things go from bad to worse when property taxes are added to the mix. The average property tax on a $300,000 home in New York is about $5,076, which is tied for the seventh-highest property tax amount in the country for a home worth that much. But in some high-cost parts of the state, such as Westchester County, homeowners pay more than twice that amount, which means they're pinched even more by the $10,000 cap on the federal deduction for state and local taxes.

Income Tax Range

Low: 4% (on up to $8,500 of taxable income for single filers and up to $17,150 for married couples filing jointly)

High: 8.82% (on taxable income over $1,070,550 for single filers and over $2,155,350 for married couples filing jointly)

For 2021, the top rate is 10.9% on taxable income over $25 million (regardless of filing status).

New York City and Yonkers impose their own income tax. A commuter tax is also imposed on residents of New York City, as well as on residents of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester Counties.

Sales Tax

4% state levy. Localities can add as much as 4.875%, and the average combined rate is 8.52%, according to the Tax Foundation. In the New York City metro area, there is an additional 0.375% sales tax to support transit.

Groceries: Exempt
Clothing: Exempt if under $110
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In New York, the median property tax rate is $1,692 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 46.19¢ per gallon (varies by county).
Diesel: 44.64¢ per gallon (varies by county).

Sin Taxes

Cigarettes and little cigars: $4.35 per pack (in New York City, an extra $1.50 per pack)
Snuff: $2 per container one ounce or less, $2 per ounce for larger containers
Cigars and other tobacco products: 75% of the wholesale price
Vapor products: 20% of retail price

Beer: $0.14 per gallon (New York City charges an additional $0.12 per gallon)
Wine: $0.30 per gallon
Liquor: $6.44 per gallon for liquor containing more than 24% alcohol by volume (New York City charges an additional $1 per gallon); $2.54 per gallon for liquor containing more than 2% but less than 24% alcohol by volume

Marijuana: Beginning April 1, 2022, distributors taxed at rate of five-tenths of one cent per milligram of THC for cannabis flower, eight-tenths of one cent per milligram of THC for concentrated cannabis, and three cents per milligram of THC for cannabis edible products; 9% state tax on retail sales; 4% local tax on retail sales may also apply

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

For 2021, estates exceeding $5.93 million are subject to New York's estate tax (the exemption threshold is adjusted each year for inflation). Taxable gifts made by the decedent as a New York resident within three years prior to death are included as part of the estate. Tax rates range from 3.06% to 16%.

The New York estate tax is a "cliff tax." That means if the value of the estate is more than 105% of the current exemption, the exemption won't be available and the entire estate will be subject to state estate tax.