Do hair salons charge sales tax on services in New York?
Hair salons on Long Island do not charge sales tax on services like haircuts, coloring, or styling. This surprises many salon owners because the rules differ depending on where you’re located in New York State.
Under New York State Tax Bulletin TB-ST-60, beautician, barber, and hair styling services are exempt from sales tax everywhere in the state except New York City. If your salon is in Nassau County, Suffolk County, or anywhere else on Long Island, you don’t collect sales tax on the services you provide. The same haircut performed at a salon in Manhattan or Brooklyn would be taxable.
Retail product sales are different. If you sell shampoo, conditioner, styling products, or any other tangible goods, those sales are subject to New York sales tax regardless of location. This applies whether customers buy products during a service appointment or just stop in to pick something up.
This means salon bookkeeping needs to track service revenue and product revenue separately. Your point-of-sale system should be configured to apply tax only to retail items and not to service transactions. When those categories are mixed together, your sales tax filings become inaccurate and you risk either overpaying or underpaying.
Some salon owners mistakenly charge sales tax on services because they assume everything is taxable or because their POS system was set up incorrectly. If you’ve been collecting sales tax on services you shouldn’t have, you’ve been overcharging customers and may have created a liability with the state.
A Long Island bookkeeping service familiar with local tax rules can help you set up proper tracking from the start or clean up records that have service and product sales mixed together. Getting this right makes quarterly filings straightforward and keeps you prepared if the state ever asks questions.
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