A Guide to Several Taxes Imposed by New York City
An Overview of the Major Taxes Affecting NYC
New York City is one of the few cities in the country that has its own income tax. The city also has one of the highest cigarette taxes in the nation, and residents have to pay a state tax for a tobacco fix as well. The high taxes don't stop there. Overall, New York State stands out for having some of the highest property taxes in the nation.
The New York City Property Tax
The New York City Department of Finance values residential and commercial properties. A tentative value assessment is sent out to property owners each January. The final assessment is sent out in May if there aren't any changes.
New York City assessments are based on percentages of market value and those percentages can vary based on the type of property. If you don't agree with your assessment, you have a right to appeal it.
Property tax rates are set each year by the mayor and city council and they can also vary depending on the type of property.
These tax rates are applied to property values to help determine each homeowner's annual tax liability. Property tax bills are sent out each year in June, and payments are due either in two semi-annual or four quarterly payments.
New York City offers several exemptions and property tax reductions, including exemptions for senior citizens, veterans, and the disabled. The New York State STAR exemption for owner-occupied housing is also available, as well as property tax abatements or reductions for certain individuals.
New York City Income Tax
New York City has a separate city income tax that residents must pay in addition to the state income tax. The city income tax rates vary from year to year. The tax rate you'll pay depends on your income level and filing status and it's based on your New York State taxable income. There are no city-specific deductions, but some tax credits specifically offset New York City income tax.
If you work for the city but live elsewhere, you must still pay an amount equal to the tax you would have owed if you lived there if you began employment after January 4, 1973.
Other New York City Taxes
In addition to the state sales tax and the Metropolitan Commuter Transportation District (MCTD) surcharge, New York City charges a sales tax. But food, prescription drugs, and non-prescription drugs are exempt, as are inexpensive clothing and footwear.
There's also a state and local tax on hotel rooms for inexpensive to moderately-priced rooms. This tax rate includes New York City and New York State sales taxes, as well as the hotel occupancy tax. Rooms renting for less expensive prices are subject to the same tax rates but at lower nightly dollar amount fees.
Medallion owners or their agents pay a tax for any cab ride that either ends in New York City or starts in the city and ends in Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, or Westchester counties. This tax, known as the taxicab ride tax, is generally passed on to customers.
New York Department of Taxation and Finance. "Cigarette and Tobacco Products Tax." Accessed Feb. 6, 2020.
The Tax Foundation. "Taxes In New York." Accessed Feb. 6, 2020.
New York Department of Taxation and Finance. "Fair Assessments—A Guide for Property Owners." Accessed Feb. 6, 2020.
NYC.gov. "Property Taxes: NYC Residential." Page 13. Accessed Feb. 6, 2020.
New York Department of Taxation and Finance. "Assessor Manual, Volume 4, Exemption Administration, Part 1: Subject Index." Accessed Feb. 6, 2020.
NYC Department of Finance. "Personal Income Tax & Non-resident NYC Employee Payments." Accessed Feb. 6, 2020.
NYC Department of Finance. "New York State Sales and Use Tax." Accessed Feb. 6, 2020.
New York Department of Taxation and Finance. "Metropolitan Commuter Transportation Mobility Tax." Accessed Feb. 6, 2020
New York Department of Taxation and Finance. "Hotel and Motel Occupancy." Accessed Feb. 6, 2020.
New York Department of Taxation and Finance. "Information on the Taxicab and Hail Vehicle Trip Tax." Accessed Feb. 6, 2020.