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New York State Senate Approves NYC Sales Tax Hike
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.
Posted on July 13, 2009
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California Residents Hit With Sales, Personal Income Increases
California residents already pay a high sales tax, but with the state's current budget woes the tax situation is about to get even worse. Los Angeles residents are going to face a whopping 9.75 sales tax on purchases plus a 5% surcharge on personal income tax.
Struggling California retailers face a temporary one cent sales tax increase as part of a deal to close the state's $42 billion budget deficit and break a 14-week legislative deadlock.
The sales tax boost would be combined with a 5 percent surcharge on personal income tax, an increased gasoline levy and higher fees, as well as widespread spending cuts. The taxes would expire in two years, but voters could choose to extend them.
However, corporations that don't have out-of-state facilities would receive a tax break. They would have the option of changing how they calculate their state taxes, choosing to be taxed on sales only, instead of a formula based on size of payroll, sales and California property they own.
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California’s bond rating has fallen to last place nationally, which means the state is unable to easily borrow money to operate. State government workers are being furloughed without pay for two days a month, bridge and road construction has been halted and funds for schools and universities have been cut. The state has suspended tax refunds and payments to vendors. The unemployment rate is 9.3 percent.
The sales tax would rise to 9.75 percent in Los Angeles County, 8.75 percent in San Diego and 9.5 percent in San Francisco, which is considering another half-cent increase to close an estimated $576 million city budget deficit.
That's nearly 10% added to almost all purchases on L.A. County and San Francicso. California is in big trouble financially: the state issued IOUs for state tax refunds, which is pretty shocking.
Posted on February 14, 2009
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National Retail Federation Asks Obama For National Sales Tax Holiday
The National Retail Federation (NRF) has asked President-Elect Barack Obama to consider National Sales Tax Holidays as part of his economic stimulus plan. The NRF wants the tax holidays be held during March, July and October 2009 with each lasting 10 days including two weekends. They want tax-free treatment on all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles but to exclude tobacco and alcohol. The NRF's idea has the federal government reimbursing the 45 states that have sales taxes for the lost revenue and providing the five states without a sales tax with revenue approximating the sales tax reimbursement that would be received by states with similar population.
Tax-free days are popular with shoppers in individual states when they are run. Some states have a tax-free period for back-to-school shopping. At least thirteen states run tax-free holidays according to this article which is a couple years old. The article quotes an NRF spokesperson as saying tax-free holidays are very successful and boost spending.
"Sales tax holidays are tremendously successful," said Craig Shearman, spokesman for the National Retail Federation. He has heard of sales gains of 10 percent to 100 percent during these holiday periods, but believes the actual number is somewhere in between.
For consumers, the holidays may have a significance greater than any actual savings.
It's the idea simply of "not paying sales tax," Shearman said. "Americans have hated paying taxes all the way back to the Boston Tea Party."
It's an interesting idea. It is a way of giving consumers a tax break providing taxes aren't raised to pay for it. If the NRF's plan is implemented by the Obama administration as part of 2009 stimulus plan then common sense dictates that the the National Sales Tax Holidays will be the most popular with consumers living in states that have the highest sales tax.
You can read the NRF's press release here and the letter and stimulus proposal here (PDF file). (via Retailer Daily)
Posted on December 24, 2008
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