New York Clothing and Footwear Sales Tax Exemption Explained

New York’s clothing and footwear exemption is an item-by-item sales tax rule, not a blanket exemption for an entire purchase. Qualifying clothing and footwear sold for less than $110 per item or pair are exempt from New York State’s 4% sales and use tax. The threshold applies separately to each item or pair, regardless of the total amount purchased.

Local treatment is more complicated. A county or city may continue to impose local sales tax unless it has elected to participate in the exemption. Sellers therefore need to classify the merchandise, calculate the selling price correctly, identify the applicable locality, and configure their records and checkout systems accordingly.

How the $110 Clothing Exemption Works

The exemption applies separately to each eligible item or pair. For example, several qualifying items may be purchased together and remain exempt from the state tax if each one is sold for less than $110. The combined transaction total does not determine whether the individual items qualify.

An item sold for exactly $110 does not satisfy the “less than $110” threshold. Clothing or footwear costing $110 or more is not eligible for this exemption.

The state exemption and the local exemption must be considered separately. An item can be exempt from New York State’s 4% tax but remain subject to a county or city tax. Within the Metropolitan Commuter Transportation District, the ⅜% MCTD tax is exempt only in participating MCTD localities. This means the same qualifying product at the same price may receive different local tax treatment depending on where the sale is sourced.

Publication 718-C identifies Chautauqua, Columbia, Delaware, Dutchess, Greene, Hamilton, Monroe, Putnam, and Tioga Counties; Chenango County outside Norwich; and New York City as jurisdictions providing the full state and local exemption for eligible items under $110. Local elections can change, so sellers should verify the current publication before relying on a locality list or configuring a local rate. For more context on how state and local taxes interact, see New York Sales Tax Rate by County: How Local Rates Combine.

Which Products Qualify

Eligible goods generally include clothing and footwear worn by humans. The exemption also covers most fabric, thread, yarn, buttons, snaps, hooks, zippers, and similar components used to make or repair exempt clothing, provided the qualifying item is sold for less than $110.

The fact that a product is worn on the body does not automatically make it exempt. The excluded categories include:

• Clothing or footwear costing $110 or more;
• Costumes;
• Rented formal wear;
• Athletic equipment;
• Protective devices;
• Many accessories; and
• Clothing made for pets or dolls.

Product descriptions alone may not be enough to classify borderline merchandise. A retailer should consider what the item is, how it is ordinarily used, and whether it is apparel, an accessory, athletic equipment, or a protective device. This is especially important for businesses selling mixed catalogs such as apparel, jewelry, sporting goods, work gear, costumes, and pet products.

Bundles containing taxable merchandise

Bundling can change the result. When exempt clothing and taxable merchandise are sold together for one price, the entire price is taxable unless the clothing price is separately stated. A seller offering a shirt with a taxable accessory, for example, should avoid relying on an internal estimate that the customer cannot see. Separately stating the prices preserves the ability to apply the proper treatment to each component.

How Price Adjustments Affect the Threshold

The amount used for the $110 test is not always the merchandise’s shelf price. Alterations, delivery charges, and coupons require separate attention.

Alterations and delivery

An alteration performed by the vendor generally counts toward the $110 threshold unless a reasonable alteration charge is separately stated. Suppose a qualifying garment is priced below the threshold but the vendor adds an alteration charge without separately stating it. The combined amount can affect whether the sale remains under the threshold. Clearly separating a reasonable alteration charge on the customer’s receipt avoids treating that charge as part of the threshold amount.

Reasonable, separately stated delivery charges do not count toward the $110 threshold. Sellers should therefore retain a clear breakdown between the merchandise price and the delivery charge rather than presenting an unexplained combined amount.

Manufacturer and store coupons

Coupon treatment depends on the type of discount. A manufacturer coupon does not reduce the selling price for purposes of the $110 test. An unreimbursed store coupon does reduce the selling price for that test.

This distinction can determine whether an item qualifies. A point-of-sale system should not treat every coupon as an identical reduction. Records should identify whether the seller expects reimbursement from a manufacturer or whether the seller bears the discount itself.

Registration and Setup for Clothing Sellers

A person selling taxable tangible personal property or taxable services in New York must register with the New York State Department of Taxation and Finance before beginning business. Registration through New York Business Express requires an NY.gov Business account. A clothing seller may have taxable sales because it sells products that do not qualify, items priced at $110 or more, taxable bundles, or eligible clothing subject to tax in a particular locality.

The registration question depends on the seller’s actual activities. The clothing exemption should not be treated as proof that an apparel business has no registration responsibilities. Review the complete inventory and the jurisdictions in which sales occur. A business selling both exempt and taxable merchandise should account for the taxable portion when evaluating its obligations.

For a broader walkthrough, consult the New York Sales Tax Registration Process Explained. Businesses can also review New York Seller’s Permit Requirements Explained for an explanation of vendor requirements.

A practical setup sequence

1. Review the catalog. Separate human clothing and footwear from costumes, accessories, protective devices, athletic equipment, pet clothing, doll clothing, and other taxable products.
2. Identify variable-price products. Flag products that may fall below or reach $110 because of size, options, discounts, alterations, or other charges.
3. Separate bundled products. Give qualifying clothing and taxable merchandise separately stated prices when they are sold in the same offer.
4. Map local treatment. Configure sales according to the applicable county or city rather than assuming the state exemption eliminates every local tax.
5. Configure discounts and charges. Distinguish manufacturer coupons from unreimbursed store coupons, and separately state reasonable alteration and delivery charges where appropriate.
6. Address registration before taxable sales begin. If the business will sell taxable tangible personal property or taxable services, complete the required registration through New York Business Express before beginning business.
7. Test receipts and reports. Confirm that receipts show item prices, taxable and exempt treatment, discounts, alterations, delivery charges, and locality information clearly enough to support return preparation.

Reporting Sales and Avoiding Practical Mistakes

Registered vendors that make eligible clothing and footwear sales must report those sales by locality on Schedule H when filing quarterly or annual sales tax returns. Reporting includes sales that are fully exempt from state and local tax as well as sales that remain subject to local tax. Exempt sales should therefore remain visible in the accounting records rather than being omitted because no tax was collected.

Common errors often result from applying one broad “tax-free clothing” setting to the entire catalog. A more reliable approach is to maintain product-level classifications and locality-specific tax settings. Sellers should pay particular attention to these issues:

• Using the order total instead of each item’s price. The threshold is tested separately for each qualifying item or pair.
• Treating $110 as exempt. The qualifying selling price must be less than $110.
• Assuming state exemption means no local tax. Local exemption depends on the county or city election, and MCTD treatment also depends on participation.
• Classifying accessories as clothing. Many accessories are excluded even when worn by a person.
• Combining exempt and taxable products under one price. An undivided bundle price makes the entire bundled sale taxable.
• Applying every coupon to the threshold. Manufacturer coupons and unreimbursed store coupons receive different treatment.
• Failing to separate related charges. How alteration and delivery charges are stated can affect the threshold calculation.
• Leaving exempt transactions out of sales reports. Eligible sales must still be tracked by locality for Schedule H reporting.

As a next step, create a product classification list, verify current local treatment, and test several realistic transactions before accepting sales. Include an item below the threshold, an item at $110, a mixed bundle, each type of coupon, an alteration, a delivery charge, and sales involving different localities. After registration, maintain records in a format that supports the filing frequency assigned to the business; the New York Sales Tax Filing Frequency guide explains that part of the compliance process.