NYS SALES TAX-CLOTHING AND FOOTWEAR

Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?”  In this blog we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog’s industry is Clothing and Footwear.

Clothing and footwear that is sold for less than $110 per item or pair and items used to make or repair this clothing are exempt from the NYS 4% sales and use taxes.

Examples of exempt purchases are:

• Aerobic clothing
• Athletic uniforms
• Blouses
• Coats
• Dresses
• Shirts
• Shoes
• Sleepwear

The sales tax exemption also applies to most fabric, buttons, zippers and items that are used to repair clothing.  However, if items are made from pearls, jewels or metal, even if sold for less than $110, is still subject to NYS 4% sales tax.

This is just a brief overview of the sales tax laws regarding the sale of clothing and footwear.  Feel free to give our office a call for more information.

By Renee Greenspan

Itemized Deductions & Your Home

The new tax law known as the Tax Cuts and Jobs Act will impact some taxpayers who itemized deductions relating to home ownership.

First, you may have heard that there is a change to mortgage interest deduction allowed for 2018 returns.  If you have a pre-existing mortgage (acquired before December 15, 2017), then you can still deduct mortgage interest on a mortgage associated with acquisition indebtedness of up to $1 million.  If you entered into a mortgage after the December 15, 2017 date, you can only deduct mortgage interest on up to $750,000 of home acquisition indebtedness.

It is also worth noting changes to deductibility of home equity loan interest for 2018.  Prior to the TCJA, homeowners could deduct home equity interest regardless of what the funds were used for.  TCJA changed that and now only home equity interest on funds used to acquire, build or substantially improve your home is deductible

. 

Lastly, taxpayers who have been able to deduct private mortgage insurance premiums in the past, may not be able to do so in 2018.  The provision for that deduction expired at the end of 2017, and has not yet been extended.  However, there may still be hope, as the 2017 provision was not extended until AFTER the start of 2017 tax filings in February 2018.

Honorine M. Campisi, CPA

NYS SALES TAX-FOOD AND BEVERAGES SOLD FROM VENDING MACHINES

Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?”  In this blog we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog focuses on Food and Beverages sold from Vending Machines.

An item that is generally taxable when sold in a food store is also taxable when sold in a vending machine.  In addition, an item that is exempt from sales tax when sold in a food store is also exempt when sold in a vending machine.  There are some exceptions to the general rule however.

The exceptions to the general rule regarding sales tax on food and beverages sold in vending machines are as follows:

• ·       Hot beverages that are sold from a vending machine are always exempt from sales tax.
• ·       Certain items that are taxable when sold by food stores are exempt when they are sold from        a vending machine for $1.50 or less.

Taxable food and beverage items when sold from a vending machine are as follows:

·        

•        Sandwiches
• ·         Bottled water
• ·         Any food that is heated by or kept warm in the vending machine

Any unheated foods and unheated beverages are exempt from sales tax when sold from vending machines.

The certain items that are taxable when sold by food stores, but are exempt when sold for $1.50 or less from a vending machine are:

• ·         Candy and confectionery
• ·         Soda

If sold for more than $1.50, the above items are taxable.

If taxable food or beverages are sold, sales tax must be collected.  In order to do this, the amount of the sales tax should be included in the selling price of the item and the sales tax rate in the local taxing jurisdiction where the machines are located should be used.

This is just a brief overview of the sales tax laws regarding the sale of food and beverages sold from vending machines.  Feel free to give our office a call for more information.

By Renee Greenspan