New York State’s Sales Tax-free Week Begins Today

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

ALBANY – New York State’s 10th sales tax-free week begins today for most clothing sales and the state hopes it equals a big back-to-school shopping season.


The week-long sales-tax exemption on clothing purchases up to $110 lasts through Monday, September 6.


Some, however, are beginning to say Albany can’t even get a tax break right, and that the political rewards may dwarf the actual savings for consumers, while giving retailers headaches along with a boost in sales.


This year, for example, retailers didn’t know until late June if there would be another week without a 4.25% state sales tax.


Although that’s a couple weeks earlier than some years, the Legislature’s late agreement – months after it was due on the state budget deadline of April 1 – gave retailers little time to prepare, according to the Retail Council of New York State.


“It’s a little frustrating for merchants and it’s frustrating for customers who want to take advantage of it,” said Rebecca Marion of the business group. She said retailers need more time and consistency to prepare workers and computers for the tax change, and to plan and promote their own discounts.


It came in plenty of time, however, for campaigning lawmakers.


“It’s just very populist,” said an analyst with the conservative-leaning Manhattan Institute and a strong proponent of tax cuts, E.J. McMahon. But “the actual effect probably isn’t very large, except for the little boost the retailers feel.”


He said state Department of Taxation and Finance records show no significant boost in the state’s economy.


Consumers will avoid paying about $75 million in state and local taxes, but officials argue its good for retailers and consumers.


“It feels good and it’s a modestly good thing,” Mr. McMahon said.


New York’s on-again, off-again relationship with the tax break began with seven temporary exemptions that swung from clothing to clothing and shoes and from items costing less than $110 to those cheaper than $500. Ultimately, there was a permanent exemption but that was suspended after less than two years.


Adding to consumers’ confusion, local counties since 1997 debated whether to also drop the local sales tax and most eventually did, if only to avoid a competitive disadvantage with neighboring counties.


This summer, the Legislature brought back the temporary sales-tax-free weeks. Fifty-six counties and 17 cities have agreed to drop their local sales tax of up to 4.5%, at least for this week.


Although there is still no study detailing the measure’s commercial benefit, its political value is clear.


“This upcoming sales tax-free week provides working families with another opportunity to increase their purchasing power as they shop for back-to-school items,” said Governor Pataki in announcing the tax break. He said he proposed four tax-free weeks while the Legislature, with whom he’s been at odds, only allowed two.


Democrats who control the Assembly, however, are quick to note the sales-tax free weeks were their idea, and they passed bills that for years were ignored by the Republican governor and Senate.


“The speaker believes in the tax-free week because it helps working families making back-to-school purchases,” said the spokesman for Assembly Speaker Sheldon Silver, Bryan Franke. “It helps consumers and retailers and it’s a boost to the state’s economy because it encourages shoppers to stay in the community instead of traveling to other states.”


The next sales-tax-free week will be January 31 through February 6.


The New York Sun

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