Selling Apparel Online: Clothing Sales Tax Exemptions in New York ($110), Massachusetts ($175), New Jersey, Pennsylvania and Minnesota

A handful of states exempt clothing from sales tax, fully or partly. New York's 4% state tax doesn't apply to clothing and footwear under $110 an item, and local tax depends on whether the county or city opted in. Massachusetts exempts the first $175 of each item and taxes only the excess. New Jersey, Pennsylvania and Minnesota generally exempt clothing but still tax jewelry, bags, fur and sport or protective gear. On marketplaces like SHEIN and Amazon, the platform collects sales tax and applies these exemptions for you. On your own store, wholesale and in-person sales, you apply them yourself, and getting the category wrong is your problem either way.

Why apparel sellers need a separate look at sales tax

Most states tax clothing like anything else, but a few exempt everyday clothing, each in its own way: some cap the exemption by item price, others have no cap but carve out accessories, fur, formal wear or sports gear. Apparel, shoe and accessory orders are often mixed, so one order can hold an exempt dress and a taxable pair of earrings.

On marketplaces, the platform collects and remits as a marketplace facilitator and its tax engine applies the exemptions. SHEIN's U.S. tax policy, for example, says it calculates, collects and remits sales tax for sellers in every state with a marketplace facilitator law. But the platform calculates from the category you assign, so a wrong category means wrong tax. Your own Shopify store, wholesale to retailers, trade shows and in-person sales are outside the platform's job.

New York: under $110 per item is exempt from state tax; local tax varies

New York's Tax Bulletin ST-122 says clothing and footwear selling for less than $110 per item or pair are exempt from the 4% state sales and use tax, and from the 3/8% Metropolitan Commuter Transportation District tax in localities that opted in. Local sales tax is exempt only where the county or city has chosen to provide the exemption; localities can change their election only effective March 1, and Publication 718-C lists who does.

Three points. First, $110 is per item, not per order: a $120 coat is fully taxable. Second, the exemption excludes jewelry, watches and similar accessories, costumes and rented formal wear, and equipment such as hard hats, protective pads and skates. Third, for your own store's New York orders, check the delivery locality's election for local tax.

Massachusetts: the first $175 of each item is exempt

Massachusetts law (M.G.L. c. 64H §6(k)) exempts clothing and footwear up to $175 per item; above that, only the excess is taxed. A $200 coat is taxed at 6.25% on $25. Clothing and footwear designed for athletic or protective use and not normally worn otherwise don't qualify.

New Jersey: clothing exempt, accessories and fur taxable

New Jersey's statute (N.J.S.A. 54:32B-8.4) exempts clothing and footwear but not fur clothing, clothing accessories or equipment, sport or recreational equipment, or protective equipment. The Division of Taxation's bulletin S&U-4 (rev. 07/22) lists taxable accessories including hair accessories, handbags, handkerchiefs, jewelry, umbrellas, wallets, watches and wigs, and treats sport-specific footwear such as ski boots, bowling shoes and cleats as taxable. Protective equipment is exempt only when needed for the user's daily work.

Fur clothing also carries a separate 6% fur clothing retail gross receipts tax, filed quarterly by retailers.

Pennsylvania: everyday clothing exempt; formal wear, fur and sportswear taxable

The Pennsylvania Department of Revenue's retailer guide REV-717 (02-26) says clothing is generally nontaxable except formal day or evening apparel, articles made of real, imitation or synthetic fur, and sporting goods and sports clothing. The department's tax expenditure report also treats accessories and ornamental wear as taxable. The state rate is 6%, plus 1% in Allegheny County and 2% in Philadelphia.

So your own store's Pennsylvania orders for everyday dresses, T-shirts, underwear and work clothes carry no tax, while evening gowns, wedding dresses, swimsuits (listed as taxable in REV-717's table), bags and jewelry do.

Minnesota: clothing exempt, with exceptions

The Minnesota Department of Revenue's Fact Sheet 105 explains that clothing is generally exempt with no price cap, but fur clothing (garments required to be labeled as fur products where the fur is worth more than three times the next most valuable component), accessories, sports and recreational equipment and protective equipment are taxable.

Selling clothing on your own store or wholesale: how to get it right

Step one, categorize finely: set up separate product categories for clothing, footwear, accessories, sports gear and fur rather than lumping everything under apparel. If you use Stripe Tax, Shopify's tax settings or other software, assign each product the right tax code.

Step two, check nexus first: you collect only in states where you have sales tax nexus and are registered. Most states' economic nexus threshold is $100,000 a year (some add a transaction count), while New York uses $500,000 and more than 100 sales. Some states count exempt and marketplace sales toward the threshold, so selling only exempt clothing doesn't mean you can skip registration. Inventory in a state's warehouse generally creates nexus regardless of thresholds.

Step three, report exempt sales on the return: registered states usually want total sales on the return, with exempt sales deducted separately, not just the taxable portion.

Step four, don't pay twice on marketplace orders: orders where SHEIN, Amazon, Etsy or another marketplace collected the tax need nothing more from you; if you paid anyway, claim the refund from the state.

Bookkeeping and income tax

Sales tax a marketplace collects isn't your revenue. Sales tax you collect yourself is a liability that's cleared when you remit it, not an expense. The gross on a 1099-K may include marketplace-collected sales tax, so back it out when you reconcile.

For more on selling through SHEIN, including marketplace sales tax collection, the 1099-K, entity choice and tariffs, see our SHEIN U.S. guide; North Carolina rules are in this guide, and Stripe Tax for your own store in this one. If you're unsure, book a free 15-minute call or add WeChat YCLUSA.