New York Tax Rates

This post provides an overview of the primary taxes levied at the state level in New York. The state is known for having a high total tax burden, primarily due to high individual income taxes, especially for high earners, and substantial property taxes. New York City and Yonkers also impose additional local income taxes, which adds to the complexity. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

New York utilizes a highly progressive state individual income tax system with nine tax brackets, and residents in certain cities must pay local income taxes on top of this.

  • State Rates: State rates range from a low of 4.00% to a top marginal rate of 10.90% (for taxable income over $25 million). New York has some of the highest top marginal rates in the nation.
    • For single filers, the 6.85% rate begins at taxable income over $215,400, and the 9.65% rate begins over $1,077,550 (2024 tax year brackets).
  • Local Income Taxes:
    • New York City (NYC): Residents pay an additional local income tax with rates ranging from 3.078% to 3.876%.
    • Yonkers: Residents and non-residents who work in Yonkers also pay a local income tax.
  • Retirement Income: Social Security benefits are not taxable in New York. The state also offers a subtraction for up to $20,000 of private and public pension/annuity income for taxpayers aged 59 1/2 or older.

Sales and Use Tax

New York has a low state sales tax rate but a high combined rate due to significant local taxes.

  • State Rate: The general state sales tax rate is 4.00% on the retail sale of tangible personal property and certain services.
  • Local Taxes: Local jurisdictions (counties and cities) impose substantial additional local sales taxes, which can be as high as 4.875% in New York City.
  • Combined Rate: The state’s average combined state and local sales tax rate is about 8.54%, and the rate in New York City is 8.875% (4.0% state + 4.875% city/MCTD).
  • Exemptions: Key exemptions include groceries (unprepared food for home consumption) and prescription drugs. Most clothing and footwear sold for less than $110 per item are also exempt statewide, although some localities have different thresholds.
  • Use Tax: A state use tax of 4.00% plus the applicable local rate applies to taxable items purchased outside of New York but used, stored, or consumed in the state if New York sales tax was not collected.

Property Tax (Ad Valorem Tax)

Property taxes in New York are collected exclusively at the local level by municipalities, counties, and school districts, and they are among the highest in the nation by virtually every metric.

  • Tax Levy: Property taxes are primarily levied by school districts, which account for the largest share of the tax bill.
  • Tax Cap: The state imposes a property tax cap limiting the annual increase in the tax levy of local governments and school districts to the lesser of 2% or the rate of inflation, which provides some protection to homeowners.
  • STAR Program: The state offers the School Tax Relief (STAR) program, which provides a property tax exemption or credit to eligible homeowners on their primary residence.
  • Effective Rate: The average effective property tax rate on owner-occupied housing is high, contributing to the state’s overall high tax burden.

Corporate Business Tax (CBT)

New York imposes a corporate income tax, officially called the Corporate Franchise Tax, on a corporation’s net income.

  • Tax Rates (2025): The corporate income tax rate structure is tiered:
    • 6.5% for businesses with a business income base of $5 million or less.
    • 7.25% for businesses with a business income base exceeding $5 million. (This higher rate was extended through the 2026 tax year).
  • Minimum Tax: Corporations must pay the greater of the income tax or a Fixed Dollar Minimum Tax, which ranges from $25 to $200,000 based on the corporation’s New York gross receipts.
  • Manufacturers: Qualified New York manufacturers benefit from a 0.0% corporate income tax rate.
  • Apportionment: For multi-state corporations, New York uses a single sales factor apportionment method to determine the amount of income subject to the tax.
  • MCTMT (Metropolitan Commuter Transportation Mobility Tax): An additional payroll-based tax is imposed on certain employers operating within the Metropolitan Commuter Transportation District (MCTD), which includes New York City and surrounding counties.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.