N.Y. to Renew Sales Tax Exemption on Clothing

A sales tax exemption on clothing purchases under $110 will go back into effect, starting April 1, in New York State.  The exemption was lifted in October 2010. The state levied a full sales tax of 4 percent from October 2010 to March 2011 to raise revenue. The state claims to have made $330 million during that period.  The tax was phased out, starting in March 2011, beginning with an exemption on clothes purchases under $55.  State Division of Budget spokesman Morris Peters said New York State expected to gain $210 million from the $55-and-under exemption.

The restored tax exemption will apply to all clothes and shoes costing less than $110.  Some retailers said the changes over the past two years have confused consumers.  Many feel that the average customer isn’t even aware of the exemption or the changes it has undergone.

The sales tax in New York generally totals 8 percent because most local counties add their own 4 percent tax to purchases.  According to the state Department of Taxation and Finance, only nine counties — including Chenango, Delaware, Tioga and Wayne counties — and New York City also provided the $55 exemption in the past year. All other counties imposed a sales tax of at least 3 percent.  The same nine counties will also keep the local sales tax exemption for purchases up to $110.

Pennsylvania has no sales tax on clothing.