While most New Yorkers were thrilled when the state senate finally went back to work at the end of last week following a five-week hiatus, most will be more than a little frustrated by one of the 100 bills that they finally passed: a sales tax increase for New York City.
The senate agreed to raise the sales tax one half of a percentage point to 8.875 percent, which makes the city's sales tax officially one of the highest in the nation. Apparently the tax increase is part of Mayor Bloomberg's $59.4 budget plan (introduced in May) to stimulate new revenue for the city in an effort to stave off more layoffs.
However, this news is only one more straw on the back of an already-struggling retail industry in the city. Consumer confidence fell in June, retail stocks have been suffering, and retailers across the city are already trying to do more with less, according to WWD. Granted, people are still buying -- some designer handbags are still selling out in hours -- and the good news is that the tax exemption on purchases that are $110 and under still remains, leaving an opening for stores focusing more on affordable pieces. That said, adding more hurdles to buying, even if it's a mere half of a percentage point, may yet diminish consumer confidence.