GOODMAN: APPAREL TAX COULD END BY DEC. 1
Byline: Don Kaplan
NEW YORK — Roy Goodman, chairman of the New York State Senate Committee on Investigation and Taxation, is optimistic that a permanent sales tax repeal on apparel could be in place in time for the next Christmas shopping period.
Last month, New York Mayor Rudolph W. Giuliani challenged the state legislature to enact a law by Dec. 1 that would abolish the state and city tax on most apparel purchases under $500.
“Hopefully it would go into effect before the major holiday shopping season,” Goodman said last week. “Dec. 1 is not an outrageous date at all.”
According to Goodman, a Republican whose district is in Manhattan, there is a strong possibility that the permanent tax ban will be taken up by the state legislature sometime before June, prior to its summer recess.
Retailers and many state politicians have been applauding the proposal since a week-long tax amnesty test in January nearly tripled overall sales results for what is usually one of slowest times of the year. Last week, many retailers cited the tax abatement as helping to boost January sales figures.
Now, with public support from Gov. George E. Pataki, Giuliani and much of the Democrat-controlled state assembly, the greatest hurdle the proposal faces is a skeptical, Republican-controlled state senate that continues to question where the lost tax revenues would come from to balance the budget.
The state’s clothing sales tax is 4 percent. New York City has an additional 4 percent tax and a .25 percent Metropolitan Transportation Authority tax on apparel.
Giuliani has said the lost revenues would be more than balanced by an enhanced economic environment that would garner tax revenues from still-taxable products and services and additional corporate business taxes.
“The problem here,” said Goodman, “is that we have to wait for additional statistics to see the extent to which this could be a drain on the state budget, which is in delicate balance right now.”