New York’s Sales Tax on clothes to Close Budget

New York's leaders are studying the sales tax on clothing and other taxes and fees to balance a budget they are still drawing up, after failing to meet an April 1 deadline according to the Associated Press.

Two state officials said one of the so-called "revenue raisers" under discussion would increase the state's 4 percent sales tax on clothing. One of the officials said the proposal includes three or four tax-free clothes shopping periods each year, including before school begins in the fall and at the December holidays. Purchases of footwear and clothing under $110 are currently exempt. The officials spoke on the condition of anonymity because of the sensitivity of the talks.

Democratic Gov. David Paterson told reporters two specific taxing ideas increases in the rate on online reservations and rental cars weren't under discussion, but when asked if a clothing sales tax proposal was being discussed he said he wouldn't comment on ideas "piece by piece."

Legislative leaders will soon brief rank-and-file lawmakers on details of the talks. Lawmakers would be forced then to accept Paterson's budget provisions as part of an emergency spending bill or shut down government. The budget so far includes raising the cigarette tax to the highest in the nation. In addition, Paterson's proposal to cap all local property taxes among the nations highest appears unlikely at this point.