Those who are planning to shop for back-to-school clothing might want to consider buying their holiday togs at the same time.
As a result of a provision adopted with the passage of the state budget, shoppers will have the benefit of a state sales tax exemption on clothing items costing less than $110 only through Sept. 30. As of Oct. 1, that tax break is suspended till next spring. And even when it resumes, it will be only half the bargain of previous years, until it is scheduled to resume in full in 2012.
“This is going to be one of those things in the state budget that has a really direct impact on citizens, on businesses and on taxpayers,” said Ted Potrikus, executive vice president of the Retail Council of New York State. “The good news is that it will allow families to do their back-to-school shopping and still save some money.”
Under the state budget finalized August 4, shoppers will lose the state”™s tax exemption on each item of clothing that costs less than $110 as of Oct. 1, through March 31. Then it will resume, but only up to $55, for one year. The exemption on the full $110 returns as of April 1, 2012.
“This is going to ping pong back and forth,” said Potrikus. “That is very frustrating to retailers, because we don”™t know how to promote it.”
He said the clothing sales tax exemption has been around in various forms since 1996, when it debuted as a one-week-only exemption on state sales tax for each item up to $500. “That really got people juiced up,” said Potrikus. He said with a one week time frame, many counties also suspended their sales tax on clothing, thus providing a real incentive for shoppers and a real event for retailers to publicize.
How consumers will react to the current suspension of the state sales tax on clothing is difficult to predict, he said, since consumers have been paying the county sales tax on clothing, which totals about 4 percent, throughout the Hudson Valley. “So maybe it”™s one of those things where people just shrug,” said Potrikus. “I go back and forth on whether people will get upset or just live with it.”
