Brooklyn's Progress
February/March 2006

By Leticia Theodore

The New York State portion of sales tax on clothing and footwear is scheduled to sunset at the end of March, but Governor George Pataki has indicated he will not allow that to happen. The Brooklyn Chamber of Commerce will join those who are demanding the Governor reverse his position.

“The current sales-tax free weeks are a mystery to consumers and retailers alike. And, a partial city-only reduction is also confusing,” said Brooklyn Chamber President Kenneth Adams. “We need the permanent elimination statewide of sales tax on clothing and footwear under $110. It’s good for retailers and good for consumers.”

It is estimated New York City loses about $700 million in sales each year to New Jersey where there is no sales tax. The Governor’s budget proposal for fiscal year 2006-2007 includes $3.2 billion in tax cuts (see full budget address at www.state.ny.us/governor/2006_budget/).

“With all the tax cuts the governor has proposed in his FY2007 Executive Budget, it is a wonder he failed to eliminate the tax that affects the average New Yorker and local businesses most, the state sales tax on clothing purchases,” said New York City Council Finance Committee Chairman David Weprin.  “In the FY2006 budget the City Council did its part to help low- and middle income New Yorkers by altogether eliminating the city sales tax on clothing purchases under $110.  It is now time for the state to do its part to help New Yorkers provide for their families.”

Last year the Governor repealed the city’s portion of the sales tax, 4 percent, on clothing and footwear costing $110 or less. The state’s portion of the tax, 4.375 percent, has been retained. The Governor says instead he will allow two tax-free weeks each year on clothing purchases under $250.  For 2006, the first tax-free week at the current $110 limit took place Jan. 30 through Feb. 5.  The second is scheduled for the summer.

According to the Retail Council of New York State, some business owners support the Governor’s plan because tax-free weeks become promotional events that can help boost sales during traditionally slow shopping seasons.  However, the Brooklyn Chamber will add the elimination of the tax to its 2006 legislative agenda. Brooklyn Chamber Members will press legislators to support the repeal of the tax during the annual Lobbying Trip scheduled to take place in March.