NORWICH – The City will not be collecting a local government tax on clothing and shoes that cost less than $110 per item as shoppers get a year-long break from the New York State sales tax on clothing and shoes costing the same amount.
As of April 1, clothing and footwear costing less than $110 is exempt from the 4 percent state sales tax, offering a bit of financial relief for local shoppers. This limit was raised from $55 during the last fiscal year. The exemption does not pertain to jewelry, metals, or athletic and protective equipment, such as helmets.
Still, local governments can implement their own sales taxes on clothing items – something that Chenango County and the City of Norwich have chosen not to follow through with.
“It’s a decision we made just to make it more business friendly overall,” said city Director of Finance Bill Roberts. He explained that it’s a policy the city has had in place for several years before the state recently altered its sales tax exemption.
“It’s not just beneficial to retailers in the area, but also to individual consumers,” Roberts added.
Other than Norwich, New York City is the only city in the state that is not implementing a local government sales tax on clothing items and shoes that cost less than $110 and while most local governments will continue to apply their own sales taxes, eight other counties, in addition to Chenango, have also opted not to. Nearby, Broome and Otsego counties will continue to charge 4 percent for their local sales tax on clothing.
“From their perspective, they may think they need the revenue,” Roberts said. He noted that while the City of Norwich may be losing out on some tax revenue, the amount has very little, if any impact on the overall budget. Moreover, it’s nearly impossible for the city to predict what would be gained in sales tax because it’s impossible to know how many consumers would spend more than $110 on one clothing item, he said.