New York Democrats Call for Permanent Sales Tax Holiday

January 30, 2006

Sales tax holidays have exploded in popularity in recent years. They may be politically popular, but as we’ve written before they’re dubious tax policy—they add to retailers’ tax compliance costs, increase uncertainty in tax law, and are non-neutral both across products and over time.

Now, some Democratic lawmakers in New York are catching on to the disadvantages of sales tax holidays, and are pushing for a permanent repeal of that state’s sales tax. From Newsday:

This week’s tax-free shopping shouldn’t be enjoyed just twice a year, according to some elected city officials, who called on Albany yesterday to permanently kill the state portion of the sales tax.

Starting yesterday and through Feb. 5, shoppers across the state will save 4 percent in state sales tax, while some areas, such as New York City and Suffolk County, will charge no sales tax on clothing and shoes costing less than $110.

“We should not have it at all; it’s a regressive tax, it disproportionately affects the middle class and the poor,” said Councilman David Weprin (D-Hollis).

Assembly Speaker Sheldon Silver, a Democrat, has said he’s in favor of removing the state sales tax permanently.

City Comptroller William Thompson Jr., a Democrat who is considered a mayoral candidate in 2009, echoed the call to scrap the tax at yesterday’s news conference at City Hall.

“Let it expire, do the right thing for the people of this city,” Thompson said. “What we need to do is ask the governor not to hold this tax on those who can least afford it.”

City officials complained the state tax forces thousands of people to cross the Hudson River into New Jersey to save money, which in turn hurts the city’s economy.

Read the full story here. For our previous post on New Hampshire’s “365-day tax holiday” click here.

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