Release #410-98

Contact: Colleen Roche (212) 788-2958
Curt Ritter (212) 788-2971
Bernadette O'Leary (212) 312-3523 (EDC)

8.25% Sales Tax On Clothes And Shoes Under $500 Will Be Eliminated From September 1st to September 7th

The Mayor commended Bill Modell for promoting the tax-free shopping week and offering customers a nine percent discount on all apparel items for two days prior to the scheduled sales tax-free week.

"New Yorkers have reason to celebrate as we kick off our fourth sales tax-free week this Tuesday, September 1st," said Mayor Giuliani. "There were those who doubted that eliminating the sales tax on clothing and shoes under $500 would be successful, but we proved them wrong. During our three previous sales tax-free shopping weeks retail sales increased by 74 percent in January, 1997; 48 percent in September 1997 -- even when shoes were not included; and 77 percent for apparel and 66 percent for shoe stores this past January. The success of these three tax-free weeks demonstrates that dropping the tax stimulates retail sales and will create jobs.

"Each year the shopping capital of the world loses more than $700 million in retail sales because New York taxes shoes and clothing and New Jersey doesn't," the Mayor continued. "This week New Yorkers can send a strong message to Albany that the sales tax on clothes and shoes should be eliminated completely. I encourage all New Yorkers to save money and send a message -- shop till they drop the tax forever," the Mayor concluded.

"On behalf of our customers and all New Yorkers I want to thank Mayor Giuliani for his leadership in our continued fight against this regressive sales tax," said Bill Modell.

The City's fourth tax-free shopping week is part of the Mayor's ongoing effort to permanently eliminate the sales tax on clothing and shoes. This past summer, Governor George E. Pataki and the legislature agreed to eliminate the sales tax on clothing and shoes costing less than $110 effective December 1, 1999. As part of the State budget, the State's four percent and the Metropolitan Transit Authority's 0.25 percent sales tax on clothing and shoe purchases under $110 will be eliminated effective December 1, 1999. Other localities, including New York City, will concurrently eliminate their local sales tax. The result in New York City will be a savings of 8.25 percent for shoppers.

The permanent elimination of the sales tax on items under $110, excluding shoes, is expected to create 13,200 jobs and $910 million in direct and indirect spending in New York City. If the sales tax were eliminated on clothing and shoes costing less than $500, it is estimated that such an elimination would create 17,400 jobs and $1.2 billion in direct and indirect spending in New York City. If the sales tax were completely eliminated on clothing and shoes, it is estimated that it would create 19,600 jobs and $1.4 billion in direct and indirect spending in New York City.