Credit card processing and merchant services in New York City, NY
New York City businesses collect 8.875% sales tax, must take cash under both city and state law, and must post full card prices if they surcharge.
Sales tax in New York City is 8.875%. That's the city's 4.5% local rate, the 4% state rate, and the 0.375% Metropolitan Commuter Transportation District surcharge. The rate is the same citywide, so a business with several locations in the city uses one rate for all of them.
Cash rules here come in two layers. The city moved first: Local Law 34 of 2020, in effect since November 19, 2020, bars food stores and retail establishments from refusing cash or charging cash customers more. The state's own version, General Business Law Sec. 396-ii, followed in March 2026. Both let you refuse bills over $20 and exempt a store with a qualifying fee-free cash-to-prepaid-card machine. A customer who orders ahead and pays at your counter can pay cash.
If you surcharge, the state's price-posting law applies in the city as it does everywhere else in New York. The total card price has to be posted before checkout, and the surcharge can't exceed what the card company charges you. A menu line that just says "3% surcharge on cards" falls short of the Department of State's guidance; a posted card price meets it.
New York City had an estimated 8,584,629 residents on July 1, 2025 (Census Bureau QuickFacts). The SBA Office of Advocacy counts 2.6 million small businesses in the New York-Newark-Jersey City metro area, more than any other metro. Before you set a surcharge, find out what the card companies actually charge you: send a statement for a free statement review. We price on interchange-plus and work with city businesses remotely, and the New York page covers statewide rules.
Rules that matter in New York City
New York City's cashless ban
Local Law 34 of 2020, in effect since November 19, 2020, prohibits food stores and retail establishments from refusing cash for in-person sales and from charging cash customers a higher price. Under the city law, a New York City store can turn away bills over $20, and it can decline cash for phone, mail or internet orders unless the customer pays on the premises. The city exempts a store that has a fee-free device for converting cash to a prepaid card, as long as the minimum deposit is $1 or less. In New York City, penalties go up to $1,000 for a first violation and $1,500 for each violation after that.
Source: NYC Department of Consumer and Worker Protection, Prohibition of cashless establishments
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Common questions
What sales tax rate do I charge in New York City?
8.875% on most taxable sales: the 4.5% city rate, the 4% state rate, and the 0.375% Metropolitan Commuter Transportation District surcharge. The same combined rate applies across the city.
Can a New York City business be cashless?
Not if it's a food store or retail establishment. Local Law 34 of 2020 has required those businesses to accept cash since November 19, 2020, and the state law that took effect in March 2026 says the same. You can refuse bills over $20, and a qualifying fee-free cash-to-prepaid-card machine exempts a store.
Can I add a credit card surcharge at my NYC restaurant?
Yes, if you follow General Business Law Sec. 518. Post the total card price, surcharge included, before the customer orders or checks out, and keep the surcharge at or below what the card company charges you. A percentage notice on the menu alone doesn't comply under the Department of State's guidance.
Does the cash rule apply to online and phone orders?
Not if the customer pays remotely. Both the city and state rules let you refuse cash for phone, mail or internet orders unless payment happens on your premises. A customer who orders ahead and pays at pickup can pay cash.
Disclaimer: general information, not professional advice
This page is general educational information, not legal, tax, accounting or financial advice. Rules and rates vary by place and change, so confirm them with the official source and a qualified professional before you act. Full terms are in our Terms of Service.
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