NEW YORK — Anything that puts more disposable money into consumers’ pockets is OK with retailers and manufacturers.
That’s why fashion industry executives here praised Mayor Rudolph W. Giuliani’s proposed tax cuts Thursday as a way to stimulate new business here and to keep shoppers from going elsewhere. The focus is on a 4 percent reduction in the sales tax on apparel selling under $100. The new rate of 4.25 percent would take effect in 1996.
The Mayor’s office said the precise definition of affected items beyond obvious clothing is yet to be determined. The state legislature must approve any local tax provisions. Currently, the city and state each collect 4 percent, and there is a 0.25 percent Metropolitan Transit Authority tax in the city.
Giuliani also proposed cuts in hotel occupancy taxes, which executives hope will attract visitors and new business.
“I can’t tell how much it will increase business, but psychologically it will make people feel better about buying,” said Michael Gould, chairman and chief executive of Bloomingdale’s.
“People won’t have to go out of state to avoid sales tax on clothing,” said a spokesman for Abraham & Straus. “It will keep business in the city, where it belongs.”
“We feel that any time we can lower the cost to the consumer it’s a win for the consumer and a win for us,” said a Macy’s spokeswoman.
Even for higher-end retailers that will not feel much benefit of a tax cut on items under $100, other proposed cuts should stimulate sales. “Cutting the hotel taxes will bring in more tourists, which will help us,” said Barry Goldsmith, managing director of Burberrys in the U.S., even though Burberrys doesn’t sell much merchandise under $100.
Susan Falk, president of Henri Bendel, also thought it would be a boon to the entire city, but said she wished Giuliani would be competitive with New Jersey and have no tax on clothes at all.
Manufacturers also cheered the proposals.
Ted Goldsmith, chairman of Bromley Corp., which makes the licensed Anne Klein, J.G. Hook and Evan-Picone coats, said, “So much business is lost to Secaucus [N.J.] right now that when the tax is cut in the city, it will be a significant boost to the stores.”
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Norman Katz, president of I. Appel Corp., noted, “Of course it will help sales. It’s my opinion that a lot of apparel sales that went to New Jersey will come back to New York.”