NORWICH — Starting March 1, 2022, the City of Norwich will begin charging sales tax on clothing purchases under $110.

This clothing tax, which the city was exempt from since approximately May of 2006 according to City of Norwich Director of Finance Dee DuFour, will be 1.5 percent of the item total, or 1.5 cents per dollar.

"In the city it'll be 1.5 [percent]. That'll be the difference because it still will be exempt in the state, and exempt in the county, so the city's portion is 1.5 percent," said DuFour.

During their monthly meeting on Tuesday, October 19, the City of Norwich common council voted to eliminate the sales tax exemption. This means articles of clothing, shoes, and some accessories sold within the city, or purchased online and shipped to the city, will be charged a sales tax, according to Alderman Robert Jeffrey.

"So believe it or not, the City of Norwich is one of the few municipalities in New York State that had the exemption. So we were one of the few municipalities that did not have tax on clothing under $110," said Jeffrey. "Jewelry is totally separate, so that's already been taxed. But if it's anything like shoes, obviously clothes, any accessories potentially, so like hats, scarves, slides, you know, flip flops, those would all be included under this."

The change will also effect online sales. Jeffrey explained that New York State would monitor the amount of tax charged to consumers within the city, and disperse those funds to the city on a monthly basis.

"Let's say you want a really nice iron online; there's already sales tax associated with this. So it all goes to New York State. New York State distributes to us," he said. "So that's how we would receive it. They would disseminate to New York State, New York State takes their, whatever share if they have any at all. But in the case of clothing, they don't. So then they would distribute it to us."

"It's no different than what would go on right now for non-clothing related sales online," he added.

Eliminating the sales tax exemption would generate more revenue for the city. While it is unclear exactly how much the city stands to gain, Jeffrey said the inclusion of tax on online sales could lead to considerable earnings.

"We’ve never kept track of that in the past, we don’t have tax receipts from it, obviously. But with a large push to more online sales, we could expect a considerable windfall," he said.

Alderman Matthew Caldwell said the increased revenue could also help offset annual property tax increases.

"I don't think consumers should be real concerned with it, a spike in prices. A lot of this is probably not even noticeable. But we are hopeful that even a small extra revenue generation will help us keep our budgets balanced without having large property tax increases every year," said Caldwell. "We just think it's another small, reasonable way to keep things moving forward here in the city."

Jeffrey echoed his sentiments, and explained that the feedback he's already heard from residents has been positive.

"I received feedback from several different people," said Jeffrey. "They like the idea, because it's no different than if people went to Binghamton. Binghamton's gonna charge you sales tax. If you go to Syracuse or Utica, you're gonna be assessed sales tax. And the more and more digital our society is going, this is a good opportunity for the City of Norwich to create revenue that's not on property tax. People are supportive if we can keep their property tax low. They're supportive of other ways that we can be creative to generate revenue."

Additionally, Jeffrey said the council's decision to charge the 1.5 percent sales tax can always be changed in the future.

"Obviously if it doesn't work out or the public doesn't like it, we can take it back. But at this point we want to make sure that we're trying everything we can to lessen the load on the property, you know, the people who live here," he explained. "We want to make sure we're lessening the blow to property owners in the City of Norwich."