Okay I need people to be real with me: does anyone actually pay the NYC/NYS use tax on out-of-state online purchases? I’m talking about the orders where the seller doesn’t collect New York sales tax at checkout—usually smaller independent stores, some direct-to-consumer brands, or anything shipped from a no-sales-tax state. I just went down a rabbit hole and technically New York residents are supposed to report that on the personal income tax return. There’s a use tax line on the IT-201! I feel like everyone ignores it, but is there any actual enforcement for regular people? Also, how does the NYC local portion work? Does the return split state and city automatically, or do we have to know the rates? I need specifics!

Wait, this is actually a thing? I genuinely thought if the site doesn’t charge tax, you just luck out. I moved here last year and bought a camera from a place in Oregon, no tax. So am I on the hook now? I use FreeTaxUSA and never even saw a use tax screen until someone mentioned it. Do I need to keep every receipt from every little online order? That feels impossible.

Yep, real on paper. There’s a use tax line on the IT-201 and the state has had it forever. In practice, the state isn’t knocking down your door over a random hoodie. But if you get audited for something else, they can add use tax for big purchases. I’ve been filing a number on that line for years, usually just my bigger no-tax orders. City rate is part of the combined rate but I’m pretty sure it gets computed based on the county/residency info you enter. Not separate forms unless you’re doing something fancy.

They folded it into the income tax return, so it’s easy to skip. The safe-harbor table is okay for small fry, but for a camera or laptop or whatever, I’d enter the actual amount. Also remember a lot of marketplaces now collect NY tax anyway—Amazon, eBay, Etsy—so it’s less of a thing than it used to be. But direct sites from no-tax states still get you.

YES! The rate thing is what trips people up. NYC’s combined rate is 8.875%—4% NYS + 4.5% city + 0.375% MCTD for the MTA. Use tax is supposed to mirror that same combined rate. But on the income tax return, I think you just enter the total purchase amount and the software/state uses your county or locality to calculate the right tax. Not separate NYS vs city payments. Have you tried the Optional Use Tax Table? NY has one for people who don’t have receipts, based on income, but I’ve heard NYC residents might need to be careful because the local part isn’t fully covered by the table. RedhookRookie, that Oregon camera is technically taxable. What did FreeTaxUSA show when you searched for use tax?

Thanks, this is super helpful. I went back into FreeTaxUSA and typed "use tax" in the search box. There was a screen for actual purchases and another option for a table. It asked for my county and something about a locality rate. It looked like it came up with the rate automatically, but I’m in Kings County so I guess it’s including NYC? I’ll probably just enter the camera and stop losing sleep. Would I include shipping, or just the item price? And does anyone keep a spreadsheet for this?

Just enter the big item and move on. The table is okay if you don’t have records and you’re in range, but when you know the exact amount, actual is cleaner. Shipping is taxable in NY when the item itself is taxable, even if it’s separately listed—another little gotcha. Credit card statements work if you don’t have the invoice. You’re not getting audited just for a camera if you make a good-faith effort.

I’d avoid the optional table if you have a big out-of-state purchase. The table is meant for people with no receipts, but if you’re in NYC the local tax is non-trivial. You don’t want to underpay over a few hundred bucks. As for shipping, Gowanus_G is right—if the item is taxable, the delivery charge generally is too. I keep a simple folder in email for "no tax collected" confirmations. It’s boring but took one evening to set up.

EastHarlem_E, that email folder is exactly the move! I do the same thing, plus a note in my phone for direct bank transfers or PayPal if I didn’t get an email receipt. The thing people forget: marketplace facilitators collect in a lot of cases now, but if you buy from a shop’s own website and they’re not registered in NY, no tax gets charged—and you’re still on the hook. I want to know if anyone here has actually had their use tax amount checked during an audit. Not the big boat story, but a regular online order. Do they really go line-by-line through email receipts? Or is it just an estimate?

Has anyone actually called the NYS tax dept about this? I called once about a wrong refund and they were surprisingly easy to talk to after the hold. Might be overkill for one camera, but now I’m curious if they expect us to self-report every single no-tax Etsy order from before they started collecting. Also yes, shipping getting taxed feels rude but I get the logic.

Never called about use tax specifically. I did call once about an IT-201 question and the hold music made me want to throw my phone out the window. If you call, tell us what they say. My guess is they’ll tell you to report actual if known, use the table if not, and remember your local rate. They’re not trying to chase a hundred little orders. They want the big-ticket stuff and people who lie on the form.

The only person I know who got flagged for use tax bought a boat in Connecticut and registered it here. The state found it through the registration, not by auditing his Amazon history. For everyday online stuff, enforcement is basically nonexistent unless you’re already being audited for something bigger. But if you are audited, they’ll look for out-of-state purchases. I’d rather enter a reasonable number and keep the receipts.

This has been super useful. For RedhookRookie: yes, technically you owe use tax on that camera; enter the actual amount, include shipping if the item is taxable, and keep the receipt. For small stuff, the table exists but it’s not a free pass for big-ticket items. And yes, NYC’s combined rate is what they’re after, including the city and MCTD pieces. I still think it’s wild how many people don’t know this line exists. I’m going to message FreeTaxUSA support and ask how they handle the local use tax for NYC residents. If they give me a real answer, I’ll come back and drop it here.