Retailers Mixed on Tax Comeback

Retailers Mixed on Tax Comeback
Soula in Brooklyn, N.Y., could be hit by the higher sales tax.

NEW YORK — After New York Gov. David Patterson last week moved to reinstate a state sales tax on clothing and footwear priced under $110, retailers were mixed on whether the added costs would impact their business. While some retailers said the tax could knock down consumer spending another notch, others said a few extra dollars should not deter shoppers.

Patterson said last Tuesday that in an effort to close the $15.4 billion defi cit, the tax, eliminated in 2005, could be reinstated, along with 88 other fees, including 39 tax changes. The governor’s budget must still be approved by the New York state Legislature.

“I think this is going to have a tremendous impact,” said Tip Top Shoes owner Danny Wasserman. “It’s just another reason for the consumer to question their purchase.”

Rick Lee, owner and general manager of Soula in Brooklyn, N.Y., said while the added tax wasn’t a big concern, it would have an effect.

“It’s confusing for the consumer. First, [the local government] did the tax-free weeks, then they took the tax away, now its coming back,” said Lee, adding that new laws are often vaguely communicated to the retailer, making it diffi cult for them to answer consumers’ questions.

“As a local retailer, it’s not a good thing for us. Why would someone buy from us if they can go to and not pay any sales tax and have their item shipped?”

Other retailers weren’t as worried last week.

“This isn’t going to have any effect on me,” said Robert Pasinkoff, president of Little Eric Shoes, a children’s boutique on Manhattan’s Upper East Side. “We deal with a very high-end clientele. If they have to pay a few extra dollars, it won’t be an issue.”

Still, Pasinkoff said he could think of various items that should be taxed instead of footwear and clothing.

“This would be a perfect time to tax things that you want people to stop [buying], such as packs of cigarettes and cigars,” he said.

Tom Mendes, owner of Plaza Too stores in New York and Connecticut was also not concerned about the proposed tax.

“It’s really hard to say how it will impact the New York stores, but I don’t think it will be substantial,” he said. “We have an e-commerce presence, so that helps us a lot. The only way I can see it affecting us is if local consumers decide to leave New York to shop. They could easily travel to Paramus, N.J., to avoid the tax.”

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