Just in time for Easter, Passover and spring clothing shopping for growing children (and adults too) here's a small bit of good financial news. And, although it was announced on April 1, 2011, it's not an April Fools joke.
Shoppers in Brooklyn and citywide who buy clothes or shoes and spend under $55 don't have to pay the usual New York State sales tax. You save over 4% on New York State sales tax, thanks to a new exemption.
The clothing tax exemption applies to children's, men's and ladies clothing, and footwear.
If you buy clothes or footwear for under $55, it's entirely tax free.
1. If you buy clothes or footwear for under $55 in NYC, it's entirely tax free.
And now there's no state tax either on these purchases, under $55.
2. Watch & Make Sure You Aren't Charged Tax You Don't Owe
Don't pay tax you don't have to. And if you're buying clothes or shoes for under $55, there's no tax at all on the purchase.
When NY State announces a tax change, sometimes they don't spend a lot of time telling retailers. Staff at a half-dozen small Brooklyn stores contacted by this site —stores that didn't have a big back office watching these things—were unaware of the tax change. And sometimes Albany bureaucrats pick an odd time for a tax change. The New York State exemption on clothing and footwear under $55 was announced on April 1, 2011. Some people thought it was an April Fools Day joke.
Bottom line: Remind the storeowner that there's a sales tax exemption on clothing and shoes under $55 in NYC.
Bring this NY State announcement with you, and insist on not paying taxes you don't have to.
For problems, contact the NYC Department of Consumer Affairs.
3. Buy Clothes and Shoes in Separate Batches to Save the Tax
If you don't want to pay NY State tax on clothes and shoes, then you'll have to spend $55 or less per sale.
So, if you are buying two, not one, $52 bras at Victoria's Secret at Fort Greene's Atlantic Terminal Mall for your teen daughters, then have the items rung up separately to save the New York State tax on both bras. You'll save $5. And because the total purchase is under $110, you won't pay NYC tax, either.
Or, suppose you're buying the baby a new outfit, and your growing 4th grader a new shirt and pair of slacks for Easter. Well, buy them separately to save the NY State tax — if the bill is over $55.
If nothing else, your kids will love getting the money you save through the clothing tax exemption —or getting an ice cream with it.
4. Keep in Mind these Two Numbers: $110 and $55
Finally, if you don't want to pay any tax at all on clothes or shoes when buying in New York City, then to qualify for the clothing tax exemption, your purchase has to be under $55.
If you spend between $55 and $110, you will pay only New York State tax.
When you spend over $110, be prepared to pay the full tax freight: both NY City and NY State tax apply.
5. How to Figure Out Your Savings from the $55 NYS Sales Tax Exemption
Many people get confused about sales tax and how to calculate it.
If you want to know how much you are saving, do this: Using a calculator, multiply the price of the item you want to buy, times the tax. The sales tax you'll be saving, thanks to the April 1, 2011 NYS tax break, is .0438 for purchases (on footwear and clothing) you make in Brooklyn or anywhere in the city.
For instance, on a jacket that costs $50, the tax is .0438 x 50. If you'd been paying state tax on this jacket, you would have paid an extra $2.19.
6. Examples of Savings on Clothes, From April NY State Reduction on Clothing Tax
- $34 Brooklyn Industries teen girl's T shirt: You save $1.63
- $47 Footlocker Kids Nike Air, size 7, at Kings Plaza Mall: You save $2.27
- $52 Victoria's Secret "Gorgeous Push Up Bra" for teenagers: You save $2.50
It's not a lot, but every little bit adds up.