In most cases, no. If you are a New York seller shipping tangible goods to a customer in another state, you do not charge New York sales tax on that sale. New York uses destination-based sourcing, so the transaction is taxed where the buyer receives the product, not where you or your inventory sit. The answer changes when an out-of-state buyer takes possession inside New York, when the sale involves certain services or software, or when your sales volume into the buyer’s state has crossed that state’s own collection threshold.
Destination Sourcing Is the Rule
New York’s sales tax follows the delivery address. When you ship tangible personal property to an out-of-state address, the sale is sourced to that state and New York has no claim on it.1New York State Department of Taxation and Finance. Find Sales Tax Rates A Brooklyn seller shipping to Florida, Texas, or Oregon collects no New York tax on those orders. Where you are located in New York, where the goods are stored, and where you process the order do not matter. The only relevant fact is where the customer receives the item.
The same principle governs in-state sales in reverse: a shipment to a New York address is taxed at the combined state and local rate for the specific jurisdiction where the buyer takes delivery. New York’s base state rate is 4%, and localities add their own on top.2New York State Department of Taxation and Finance. Sales Tax Rate Publications New York City’s combined rate is 8.875%.3NYC.gov. Sales Tax
When You Do Charge NY Tax to an Out-of-State Buyer
The clean exception to destination sourcing is in-person pickup. If your out-of-state customer takes possession at your New York location, the sale is sourced to that location and New York tax applies at the local rate. A Connecticut resident who walks into your Albany shop and buys something pays Albany’s combined rate. Residence does not control; possession does.
Services have their own sourcing logic. A repair performed on equipment sitting in New York is sourced to New York even when the equipment’s owner is based elsewhere. A service performed for an out-of-state client, where the benefit is delivered outside New York, is generally sourced to that other state. What state a service is sourced to usually turns on where the work is physically performed or where the benefit is delivered, depending on the type of service.
Software is another place sellers get caught. New York treats prewritten computer software as taxable tangible personal property no matter how it is delivered, including software accessed remotely through a browser.4New York State Department of Taxation and Finance. Computer Software The state’s position is that the buyer has constructive possession when they can access and use the software. For a SaaS product, the buyer’s location still controls sourcing under the destination rule, but the transaction is taxable in a way many sellers do not expect. Custom software written for a single customer is generally exempt. Other digital goods, such as streaming video, downloaded music, and e-books, are not currently subject to New York sales tax.
Out-of-State Resellers Picking Up in New York
When an out-of-state business buys goods from you for resale and picks them up in New York, the sale can still be exempt. The buyer has to give you a properly completed Form ST-120, New York’s resale certificate. Out-of-state purchasers without a New York Certificate of Authority complete Part 2 of the form and provide their home-state sales tax registration number instead.5New York State Department of Taxation and Finance. Form ST-120 Resale Certificate
A resale certificate issued by another state is not valid in New York. If a New Jersey buyer hands you a New Jersey certificate, that does not protect the sale. They have to complete New York’s form.6New York State Department of Taxation and Finance. Exemption Certificates for Sales Tax Collect the completed certificate within 90 days of the sale, and keep it linked to the invoice it covers. Sales without a valid certificate on file are presumed taxable in an audit.
If You Sell Through a Marketplace
Selling through Amazon, eBay, Etsy, or a similar platform usually shifts the collection duty. A marketplace provider that facilitates sales of tangible personal property must register and collect New York sales tax on behalf of its sellers once the platform, across all sellers combined, exceeds $500,000 in gross receipts and 100 sales delivered into New York during the preceding four quarters.7New York State Department of Taxation and Finance. Sales Tax Collection Requirement for Marketplace Providers When the platform collects, you are relieved of liability for that tax as long as the marketplace has given you a completed Form ST-150 and any failure to collect was not caused by wrong information from you. The relief does not apply between affiliated companies.
Marketplace facilitator rules cover only tangible personal property. They do not cover taxable services, restaurant food, hotel occupancy, or admissions. And if you sell directly through your own site alongside your marketplace sales, the direct sales are still your responsibility.
You May Still Owe Tax in the Buyer’s State
Not charging New York tax on an out-of-state shipment does not mean the sale escapes tax entirely. Every state with a sales tax now has an economic nexus rule, based on the U.S. Supreme Court’s 2018 decision in South Dakota v. Wayfair, which allows a state to require collection from remote sellers that exceed a set volume of sales into the state. Most states set the threshold at $100,000 in sales or 200 transactions; a few set it higher. If your sales into a given state cross its line, you have to register there, collect that state’s tax at the buyer’s local rate, and remit it.
New York’s own remote-seller threshold is on the higher end: more than $500,000 in gross receipts from tangible personal property delivered into New York and more than 100 separate sales into the state during the preceding four sales tax quarters, with both conditions required.8New York State Department of Taxation and Finance. Registration Requirement for Businesses with No Physical Presence in New York State That figure controls when out-of-state sellers have to collect New York tax on shipments into New York. It does not affect whether you collect New York tax on shipments going the other way; those shipments are sourced to the destination state and follow that state’s rules.
Physical presence in another state also creates nexus there. If you keep inventory in a fulfillment warehouse in another state, have employees working there, or attend trade shows there with any regularity, you may already have a collection obligation regardless of sales volume.
Use Tax on the Buyer’s Side
When a seller does not collect sales tax on a taxable purchase, most states expect the buyer to self-report and pay use tax at an equivalent rate. New York imposes use tax on taxable items and services used within the state when sales tax was not collected at the point of sale.9New York State Department of Taxation and Finance. Use Tax for Businesses The same logic runs in the other direction: if you are shipping from New York to a customer in another state and no tax is collected on the sale, that customer’s home state likely expects use tax from them. Consumer compliance is famously low, but state auditors pursue business-to-business use tax obligations more aggressively.
The practical picture for a New York seller shipping across state lines is simpler than it looks. If the goods leave New York and arrive at the customer’s out-of-state address, you do not charge New York tax. If the customer picks up in New York, you do. If the item is a taxable service or prewritten software, check where the sourcing rule places the transaction before deciding. And keep an eye on your sales volume into each destination state, because at some point a state you have been shipping into becomes a state you have to register in.