Configuring New York’s apparel tax exemption under $110 in Shopify. Clothing/footwear under $110 are exempt from the 4% NY state tax; in seven counties, these items are also county-tax exempt (e.g., Albany County: only county tax; Hamilton County: no state or county tax). Initial setups were charging both state and county taxes incorrectly.
Working approach reported:
Use Shopify Taxes with precise Product Category (e.g., Apparel & Accessories > Clothing > Activewear).
Avoid Product Type; having one broke exemptions for some users.
Remove product-level tax exemptions (they indiscriminately remove all taxes for that state).
Create a hidden collection (e.g., “tax:collection”) with manual product inclusion to aid classification.
Set prices at $109 (instead of $110) to ensure exemption threshold.
Ensure POS stays online to sync tax settings; optionally set location-specific tax rules (e.g., Manhattan).
Outcomes: Under $110, Manhattan buyers pay 0% tax; other NY counties charge 0% state and ~3–4% county tax.
Outstanding issues: County rate accuracy may lag (Monroe County noted as outdated on 5/22/2023). Manual collection maintenance can be cumbersome. Discussion largely resolved with a practical configuration, but data accuracy remains an ongoing concern.
I’m trying to set up the tax information in my store but I’m having a hard time finding information on it. The only info I was able to find was from 5 years ago so I’m hoping Shopify has a better solution now.
In NY, any clothing or footwear sold for less than $110 is exempt from the state tax of 4%. So for any order from a customer in NY (where we’re based) they should only be charged the county tax as long as the item is under $110. On top of that, there are 7 counties where that item would also be exempt from the county tax. For example, if someone in Albany County purchases a t-shirt for $19.99, they should only be charged the 4% Albany County tax rate, but if they live in Hamilton County, they shouldn’t be charged either tax.
Right now, if that same customer purchases the same t-shirt, they get charged the Albany County tax or Hamilton County tax, as well as an additional 4% NYS tax. No matter what they’re getting charged both tax rates. I need to figure out a way to exempt these products from that 4% state tax, and set up those exclusions for the 7 other counties. Any ideas?
2+ years later, I’m having the same issue with no seeming solution. Have you been able to come up with a workable way to charge customers the correct amount for tax in NY?
If you are using Shopify Taxes to calculate the tax rates for your products it is important that you correctly assign the item to a Product Category. In this case, we specifically assigned it to Apparel & Accessories → clothing → activewear → try get as specific as possible.
We made the price of some items $109 (down from $110).
We removed all product exemptions as you can’t discern from STATE tax exemptions and Country tax exemptions. Exemptions on the state taxes remove ALL possible taxes from that state
Create a collection Tax:Clothing that is hidden from the front end. This supposedly helps Shopify to classify the products correctly.
After these edits, it started working perfectly. For items under $110 if a customer bought something using a shipping and billing address in Manhattan, they would pay 0% tax. For customers in other NY counties, they would pay 0% state tax but 3-4% to the county.
Also keep in mind, that if you’re using a POS, it needs to be regularly connected to the internet to sync with Shopify and your stores settings (tax included). If your store is in Manhattan, you can also create tax rules to not charge taxes at that particular POS’s location.
Hope this helps! I had countless call with Shopify to help get to the bottom of it, but I think I’ve finally got there.
Hi - I was able to do this following the already mentioned steps (below) with the REMOVAL OF PRODUCT TYPE. If I had a Product Type in my product, it would break all exemptions.
(side note: As of 5/22/2023, the Monroe County, NY sales tax has not been updated in their rules. I’ll see if I can figure out how to submit an issue).
Product Category correctly attributed to the product. In my case, Clothing Accessories.
Nothing in Product Type
Collection made, manually, with manually added clothing products, called “tax:collection”. I deselected all of my sales channels so that this collection isn’t visible to an end user.
I’m seeing issues with county tax rates online from other users, so be aware of that. Also, seems as though the “manual” addition of the products is important, which will likely be cumbersome for anyone selling a large amount of apparel.