Taxes in New York: Features and Advantages

Main Taxes in New York

Income Tax

New York applies a progressive income tax scale with rates from 4% to 10.9%. In addition, residents of New York City pay a city tax ranging from 3.078% to 3.876%.

There is no standard deduction, and nearly all income is taxable. Individuals pay a double tax — at both the state and city levels.

Sales Tax

The base sales tax rate in New York State is 4%, but with local taxes it can reach 8.875% in New York City.

Most goods and services, hotels, and short-term rentals are subject to tax.

If you purchase goods outside NY but use them in New York, you are required to pay Use Tax if the seller did not collect Sales Tax.

Property Tax

The average property tax rate is 1.54% of housing value.

Estate Tax

Applies if the estate value exceeds $6,940,000. Rates range from 3.06% to 16%.

Business Taxes

C corporations registered or operating in New York pay corporate tax.

Rates depend on income size:

• Less than $5 million — 6.5%
• Over $5 million — 7.25% (temporary until 2027)

S corporations pay a fixed fee from $25 to $4,500 depending on income. For small companies, the rate may be reduced to 0%.

Financial corporations (banks, holdings, credit unions) pay a higher rate of 9%.

All companies doing business in NY must file an Annual Franchise Tax and a Biennial Statement (every 2 years).

Excise Taxes

New York levies excise taxes on goods such as alcohol, tobacco, and fuel.

Advantages of New York’s Tax System

• Progressive income tax scale — lower and middle-income residents pay less tax.
• Transparent business conditions: moderate corporate tax rates and business incentives.
• No personal property tax on individuals.

Taxes in New York Compared to Other States

• Among the highest income tax rates: up to 10.9% at the state level plus up to 3.876% in NYC.
• Moderate corporate tax rates for corporations, with reduced rates for companies earning under $5 million.
• No personal property tax (cars, planes, boats, etc.).
• Estate tax applies if value exceeds $6.94 million (this tax is absent in most states).