I recently decided to start a clothing line (via etsy.com) out of my apartment in Manhattan and I am a little confused with the sales tax rules. I don't completely understand when to apply sales tax and when not to and the specific rates to use since my customers are located in several different states/cities. Please advise.

ANSWER

The BIDaWIZ Team's Answer:

Since your business location is in New York City there are 2 types of sales tax that are applicable to you. One is New York sales tax obtained from the Department of Revenue and the second is New York City sales tax.

Generally, when the purchaser of your product is a New York resident, you must withhold & remit the New York state sales tax. In addition, if the purchaser is also a New York City resident, then you may have to withhold & remit New York City sales tax to the municipality. However, there is no longer sales tax on clothing and footwear costing under $110 sold in New York or New York City. Furthermore, please note that items sold over the internet are generally exempt from sales tax, unless the customer lives in New York and/or New York City. Thus, sales over the internet to Non-Residents are exempt from sales tax.

References: New York Tax Law 1115(a)(30-a)
State: New York
Sales tax category: Internet Tax
Product/Service: Clothing