ALBANY, N.Y. — Retail shoppers in New York City can say goodbye to the 4 percent city sales tax on clothing and footwear costing less than $110 beginning Sept. 1.
Gov. George E. Pataki signed the measure Monday, which will save taxpayers an estimated $184 million in the next year. Pataki called it a “tremendous boost to New York City retailers.” The state’s 4 percent sales tax on apparel and footwear will stay in effect, as will the 0.25 percent Metropolitan Transportation Authority tax.
Mayor Michael Bloomberg said the savings will be “greatly appreciated by hardworking New Yorkers” who “deserve a break on this regressive tax.”
Assembly Speaker Sheldon Silver (D., Manhattan), who sponsored the legislation, said the move will benefit consumers and retailers.
“New York City retailers will benefit because, as a result of the elimination of the city’s sales tax, the city will be a more competitive location for consumers to shop,” said Silver, citing laws in neighboring New Jersey, which exempts all clothing purchases from sales taxation, and Connecticut, which exempts clothing purchases under $50.
The city’s proposal came in response to a 2003 statewide repeal of sales tax exemptions on clothing purchases. State Senate sponsor Frank Padavan (R., Queens), said, “Alleviating the tax burden on everyday necessities provides our working families much needed relief while strengthening the power of their dollar.”
Padavan said the new law will “increase the draw of tourism with an increased purchasing power and provide our residents the needed tax relief they deserve.”