Lawmakers: Make Tax Break on Clothing Permanent

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The New York Sun

A weeklong tax break on shoe and clothing purchases starts today, but some local officials say that’s not enough – that all clothing purchases of less than $110 should always be free of state sales tax.


A member of the City Council, David Weprin, and the New York City comptroller, William Thompson Jr., joined several other lawmakers and officials yesterday at a news conference outside City Hall to urge Governor Pataki not to reverse himself and make permanent a 4% state sales tax on clothing and footwear purchases under $110, which the governor previously said he would allow to expire in March. Mr. Pataki, in his proposed budget unveiled January 17, said he would eliminate the sales tax exemption.


“I’m very disappointed in the governor. For somebody who talks about the business taxes and the need to reduce taxes, he’s taking another direction,” Mr. Thompson said.


Mr. Weprin, the chairman of the council’s finance committee, said he opposed the sales tax for two reasons. It puts New York at a competitive disadvantage to neighboring states, he said, and it “disproportionately affects the middle class and poor New Yorkers” because it takes up a larger proportion of their income. “Not that taxes in general are good, but the sales tax is probably one of the worst.”


“We’d love to be able to say to people in New Jersey, ‘Come on over and shop,'” Mr. Weprin said, citing an estimate from local Chambers of Commerce that New York State loses $700 million annually to New Jersey as a result of its clothing sales tax.


An Assembly member, Jeffrey Dinowitz, said shoppers who travel to New Jersey to buy their clothes tax-free do other shopping there as well, generating losses not only for New York clothes stores, but for gas stations, restaurants, and other stores.


“The economic activity that would be generated” in New York by eliminating the tax on clothing “will result in more income in the end” from other taxes, Mr. Weprin said.


“This is about broken promises,” Mr. Thompson added, referring to the fact that, as recently as last July, Mr. Pataki had said he would allow the tax to sunset as planned.


“We are looking to do it. We will do it. It’s just a question of making sure we do things prudently and in accordance with having the state in a sound financial condition,” the Daily News quoted him as saying.


The city and state in 1999 voted to eliminate sales tax on clothing and shoe purchases worth less than $110 dollars. In 2003, the exemptions were temporarily lifted, in part to pay for recovery costs from the World Trade Center attacks. At Mayor Bloomberg’s request, the governor last July signed legislation eliminating the city’s 4% share of the tax. New York State still takes 4% of purchases, and the MTA 0.375%.


Mr. Bloomberg and the speaker of the Assembly, Sheldon Silver, along with other New York lawmakers have called for the governor not to make the state sales tax permanent.


A statement the governor’s office released yesterday said, “This proposal will keep current law in place, which provides New Yorkers with two event style tax-free weeks each year and expands the tax-free limit for consumers to $250 per item. These tax-free weeks provide retailers and small businesses with event style weeks to promote and help them attract more customers to their stores during traditionally slow times of the year.”


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