The New York State Senate has approved
a sales tax hike for New York City. After a long debate, the lawmakers agreed to raise the sales tax by another one-half of a percent. That will make the sales tax in New York City a whopping 8.875%, one of the highest in the country.
In response to news of the sales tax hike, Mayor Michael Bloomberg said he would lift the city’s hiring freeze. The increase was a key part of the $59.4 billion budget he proposed in May that would help generate $1 billion in new taxes and limit additional spending cuts and layoffs.
The increase applies to the city's portion of the sales tax, which when added to a state tax and transit tax lifts the total rate to 8.875 percent. The city's portion of the sales tax has only gone up once since 1974, and that was a temporary 0.125 percentage-point increase from 2003 to 2005.
The lawmakers kept the current exemption on clothing purchases under $110. Now that the measure has passed the Senate it is looking more likely to become law. New York City is only one of many cash-strapped cities that are so desperate for money that they are looking to raise tax revenue any way they can.
