ALBANY, New York — Gov. George E. Pataki, in his 2005 budget, has proposed delaying the state’s elimination of the sales tax on apparel and footwear, as well as changes in the state’s sales tax exemption weeks.
Pataki said in his budget address on Tuesday that he still favors a sales-tax phaseout, as passed by the legislature last year, but it is impossible to do it this year because of the “financial realities of the state.” Pataki proposed a $105.5 billion budget that seeks to close a projected $4.15 billion deficit.
“Last year, we proposed $500, and the legislature came in at $110,” he said of the exemption threshold. “Hopefully, this year they’ll accept the $250.”
Republican Joseph L. Bruno, the Senate majority leader, said: “We have it in law, the expiration of the sales tax. That’s what we voted for, those reductions, and we’ll see how it all plays out.”
Democrat Sheldon Silver, assembly speaker, said, “It’s another example of how the governor is imposing $460 million in a new tax on working men and women. He is going to drive business to border states, none of which have a sales tax on clothing. If you’re from Staten Island, the governor is doing the best thing he can to promote the Woodbridge Mall (in Middlesex County, N.J.). If you’re from downstate, Manhattan or the Bronx, he’s promoting the Paramus mall (in Bergen County, N.J.). If you’re from Binghamton, he’s promoting business in Scranton, Pa. That’s what he is doing here.”
The one-week exemptions would still fall in midwinter and late summer as before, but exemptions on clothing and footwear would be increased to $250 from $110 and Energy Star appliances would also be included. Pataki said the delay in eliminating the sales tax would save the state an estimated $455.9 million in 2005.
Ted Potrikus, executive vice president for the Retail Council of New York State, said the governor proposed bringing the state’s share of sales tax down from 4.25 percent to an even 4 percent. The Retail Council is backing that proposal, as well as leaving the two tax-free weeks instead of completely phasing out the state portion of sales tax.
Related Articles
You May Also Like
“When you do it 52 weeks a year, the counties can’t afford to participate, and it’s really not tax-free shopping,” Potrikus said. “Retailers have seen a dramatic increase in customer interest when you squeeze this into a couple of one-week periods rather than making it full time.”
Under the law passed last year, meant to counter lost consumer spending to neighboring states, counties would have the option of imposing the state tax or not.