Bernadette O'Leary (212) 312-3523(EDC)
MAYOR GIULIANI ANNOUNCES SUCCESS OF TAX FREE SHOPPING WEEK
City Experiences Forty-Eight Percent Surge In Apparel Sales
-- New Yorkers Demonstrate Support For Permanent Tax Elimination
Sooner And On More Costly Purchases --
Mayor Rudolph W. Giuliani today announced that New York City's second sales tax exemption week in 1997 was a great success -- generating an average retail sales increase of approximately 48 percent among stores surveyed throughout the City.
"Once again New Yorkers are sending a message to Albany -- eliminate the sales tax now," said Mayor Giuliani. "Last week, New York City stores experienced an increase of approximately 48 percent in sales over sales during the same time last year. New Yorkers are saying the elimination should cover not just clothing purchases less than $100, but footwear and clothing purchases less than $500. Eliminating the sales tax on purchases of $500 or less will save New York City families more money, increase economic activity by $1.2 billion, add more than 17,000 jobs to our local economy, and recover the estimated $700 million in retail clothing sales lost annually to New Jersey."
The recent sales tax exemption, which began September 1 and lasted through September 7, was the second effort of its kind to boost retail sales and encourage shoppers to spend in New York City. The first sales tax free week took place in January, with clothing and footwear purchases of less than $500 exempt from sales tax.
The New York City Economic Development Corporation (EDC) surveyed 63 York City retailers with 183 locations throughout the five boroughs to determine the results of the sales tax exemption. Based on preliminary reports, retailers experienced substantial sales increases during the week. In addition, non-apparel retailers throughout the City experienced similar increases in sales.
As part of the State's budget, the State's four percent and the Metropolitan Transit Authority's 0.25 percent sales tax on clothing purchases under $100 will be eliminated in December 1999. Localities, including New York City, will have the option of concurrently eliminating local sales tax. The result in New York City which will eliminate local sales tax of 4 percent will be a savings of 8.25 percent. The elimination is expected to create 11,000 jobs and $760 million in direct and indirect spending in New York City. Another sales tax free week is planned for 1998 but it has not yet been scheduled.
The City's first sales tax free week took place January 18 to January 24 and resulted in a 73.6 percent sales increase at apparel, shoe, and department store sales compared to the same week the previous year. Non-apparel retailers also saw a 12 percent sales increase for the entire month of January 1997 over January 1996, and apparel sales increased 29 percent over January 1996. Retailers in all boroughs and stores of all sizes -- from stores with annual sales under $1 million to stores with annual sales of more than $100 million -- saw increased apparel sales during the temporary elimination of the sales tax. The January elimination covered clothing and footwear purchases less than $500.
- Chris Friedlander, Vice President, Daffy's
"Sales tax free week was the catalyst that was needed to get the Fall shopping season off to a good start. The weather was good, the inventory was in the right shape, but the elimination of sales tax was the motivating factor that pushed sales over the top." - Dennis Parodi, Executive Vice President, Gap, Inc.
"The second sales tax free week in New York was a win-win for everyone. The increased traffic in our stores demonstrated that our customers were excited about the savings, and we're delighted that sales in our New York Gap, GapKids and BabyGap stores were up by more than 49 percent over the same week last year. We wish that every day was tax free, and look forward to 1999, when that will become a reality in New York. What's good for our customers is good for the Gap." - Christine Spong, Manager, Osh Kosh
"Usually 90 percent of our customers are tourists, but that changed completely last week. People who live in New Jersey but work in New York bought in New York last week." - Carl Reggie, Marketing Manager, Staten Island Mall
"Our foot traffic was up 19 percent. Customers were very upbeat." - Carol Konop, Proprietor, The Shirt Store
"Our store experienced a 124 percent increase in sales during the tax free week. This is the best thing that's ever happened to small businesses. I'd like to thank Mayor Giuliani for doing such a great job." - Eunsook Pai, Liana
"Our sales literally doubled this week! They literally doubled!" - Peter Canty, Proprietor, Youngworld
"We hired 100 temporary workers to handle overflow of traffic." - Gabriel Piro, Proprietor, Dornan
"Sales increased so much that we had to hire additional employees. Even with the new workers, a large number of orders from last week have not been processed yet."
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