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Sales tax break
BY JOE MAHONEY
DAILY NEWS ALBANY BUREAU CHIEF
Thursday, August 26th, 2004
Shopaholics and Republicans unite: Next week is your lucky week.
Starting Tuesday, the city and state are lifting the sales tax on clothes, shoes, accessories and other must-haves for back-to-school or back-room deals.
The semiannual tax-free shopping week, which lasts through Sept. 6, removes the 8.65% tax on items that cost less than $110.
The move will save shoppers an estimated $75 million statewide.
"If a retailer were to take off 8% for a sale, customers would just laugh," said Craig Shearman of the National Retail Federation. "But if they can save 7% or 8% by not paying taxes, that has a very strong psychological effect, and that's because Americans have hated to pay taxes back to the Boston Tea Party."
The move is meant to give merchants a boost by luring customers in for back-to-school shopping.
But not everyone is thrilled with the timing.
Storeowners near Madison Square Garden, where the Republican National Convention starts Monday, have complained that traffic and crowds will keep customers away during tax-free week.
City and state officials have turned a deaf ear to the merchants' call for another tax-free week just for them.
Gov. Pataki plugged the tax-free week yesterday, even though he persuaded the Legislature this year not to permanently drop the sales tax on clothing. The governor wants four tax-amnesty weeks a year.
The next tax-free week in New York runs from Jan. 31 to Feb. 6. After that, it's anyone's guess as to whether lawmakers and Pataki will agree on more temporary breaks.
A dozen states have begun tax-free weeks on clothing since New York started its program in 1997.
But Albany's indecisiveness on the program is giving retailers headaches.
"It would really drive up sales if we had a consistent program we could plan for," said Rebecca Marion, spokeswoman for the Retail Council of New York State. "The way it is now, nobody really knows until it's very late in the game."
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