ALBANY — Gov. David A. Paterson on Tuesday proposed an additional 5 percent sales tax on luxury goods, such as jewelry and furs costing more than $20,000, as one of scores of tax and fee boosts intended to close a widening gap in New York’s budget.
Responding to the recession and the collapse of revenues from Wall Street, a key driver of the economy, Paterson is seeking to eliminate the sales tax exemption on clothing and footwear priced less than $110, but he would replace it with two one-week exemption periods on clothing and footwear purchases of less than $500. Municipalities would have the option of joining the state in offering the exemption. Restructuring the exemptions would generate $462 million in the 2009-10 fiscal year and $660 million the following year.
Paterson’s $121.1 billion budget plan would impose higher taxes on everything from personal services such as beauty, barber, manicure/pedicure and massage to beer and wine. It seeks to close a $15.4 billion budget gap over the next two fiscal years.
The luxury goods tax would raise $12 million in 2009-10 and $15 million in 2010-11.
The austere spending plan also mandates widespread service cuts and is expected to trigger a battle in the state legislature, which faces an April 1 deadline to approve it.
“Adjusting our state budget to reflect this new fiscal environment will be an extraordinary challenge,” Paterson said in prepared remarks.
Paterson proposed closing a loophole that allows certain vendors, such as private label credit card lenders (including department stores), to reclaim sales tax revenues from debts that are not repaid, but prohibits other vendors or lenders to access these revenues. The proposal would limit the credit refund to the vendor only.
The governor wants to remove the discrepancy in sales tax between manufacturers’ coupons and store-issued coupons.
Ted Potrikus, legislative liaison for the Retail Council of New York State, said he would have to review the proposals with their members before commenting.
In addition, Paterson wants to limit itemized deductions for high-income taxpayers. This would restrict the ability of taxpayers with incomes of more than $1 million to reduce their liability by claiming itemized deductions. At present, taxpayers with incomes in excess of $525,000 are allowed to claim 50 percent of the value of itemized deductions. Charitable deductions would be excluded from this proposal and may still be claimed as itemized deductions for the purposes of state income taxes.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion