Taxes State Taxes A Guide to New York City Taxes By Tonya Moreno, CPA Updated on January 4, 2023 Reviewed by Margaret James Reviewed by Margaret James Twitter Peggy James is an expert in accounting, corporate finance, and personal finance. She is a certified public accountant who owns her own accounting firm, where she serves small businesses, nonprofits, solopreneurs, freelancers, and individuals. learn about our financial review board Fact checked by Mrinalini Krishna In This Article View All In This Article New York City Property Tax New York City Income Tax Other New York City Taxes Frequently Asked Questions (FAQs) Photo: The Balance / Bailey Mariner New York City residents often find themselves paying the same tax twice, once to the city and again to the state. This is one of just a few cities in the country that has its own income tax. The city also has one of the highest cigarette taxes in the nation. Residents have to pay a state tax for tobacco products 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, so you'll most likely feel the bite if you buy a home here. Key Takeaways New York City is one of the few cities in America that imposes its own income tax in addition to the state income tax.Property tax rates are set annually by the mayor and city council. Property assessments can be appealed.The city has its own city income tax that residents must pay in addition to the state income tax.New York City charges its own sales tax as well. But certain purchases are exempt, including food and prescription and non-prescription drugs.Taxicab rides are taxed in the city as well. Technically, it's paid by owners. But the expense is generally passed on to riders. 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 on May 1 each year for most communities. A final assessment is then sent out if there aren't any changes. New York City assessments are based on percentages of market value. The percentages can vary based on the type of property. Note You have a right to appeal if you don't agree with your assessment. Property tax rates are set each year by the mayor and by the city council. They can vary depending on the type of property. They're applied to property values to help determine each homeowner's annual tax liability. Property taxes are due either in two semi-annual payments for homes with assessed values of more than $250,000 or four quarterly payments for homes with assessed values of $250,000 or less. 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. Note The 2021-2022 New York State budget also gives homeowners a break in the form of a tax credit for any portion of real property taxes that exceeds 6% of their qualified adjusted gross incomes (QAGIs) if their QAGI is less than $250,000. 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. It's based on your New York State taxable income. There are no city-specific deductions. But some tax credits specifically offset the New York City income tax. Note If you work for the city but don't live there, you must still pay an amount equal to the tax you would have owed if you had lived there. This rule applies to anyone who began employment after Jan. 4, 1973. Other New York City Taxes New York City charges a sales tax in addition to the state sales tax and the Metropolitan Commuter Transportation District (MCTD) surcharge. But food, prescription drugs, and non-prescription drugs are exempt, as well as 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 a hotel occupancy tax. Rooms renting for less expensive prices are subject to the same tax rates, but at lesser nightly dollar amount fees. Medallion owners or their agents pay a tax for any cab ride that 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 consumers. Medallion owners are those who are duly licensed with a medallion by the Taxi Limousine Commission of New York City. Frequently Asked Questions (FAQs) Who pays taxes in New York City? New York City levies personal income tax on people, trusts and estates if their income is earned in the city. The city also imposes a number of taxes on businesses and corporations that operate within its limits. Such taxes, for example, include the generic business corporation tax or industry-specific taxicab license transfer tax. If you own real estate in the city, you'd be required to pay property taxes. How do you pay New York City real estate taxes? If you own property in New York City, you're required to pay property based on the assessed value of that property. If the property is assessed for less than $250,000, you're required to pay your property taxes quarterly. If the property is assessed for more than $250,000, the property tax payment is twice a year. Property tax bills are posted on the NYC Department of Finance website a month before they are due, and can be paid electronically. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Tax Foundation. "Taxes In New York." New York State Department of Taxation and Finance. "Fair Assessments: A Guide for Property Owners." NYC Department of Finance. "Tax Bills and Payments." NYC Department of Finance. "Property Tax Benefits for Homeowners." New York State. "Governor Cuomo Signs FY 2022 Budget and Announces Continuation of Middle-Class Tax Cuts to Help New Yorkers Recover From Economic Hardship During the COVID-19 Pandemic." NYC Department of Finance. "Personal Income Tax & Non-resident NYC Employee Payments." NYC 311. "Sales Tax." NYC Department of Finance. "Business & Excise Tax Highlights." New York State Department of Taxation and Finance. "Information on the Taxicab and Hail Vehicle Trip Tax." NYC.gov. "New York City Payroll Tax."