Curt Ritter 212-788-2971
Bernadette O'Leary 212-312-3523 (EDC)
MAYOR GIULIANI ANNOUNCES SALES TAX EXEMPTION WEEK SUCCESS:
Retail Sales Up 77% -- Shoe Sales Up 66%
Mayor Rudolph W. Giuliani, joined by leaders of the footwear and retail industry, today announced that New York City’s third sales tax exemption week resulted in increased sales of more than 77 percent at several of the City’s major retail stores. The Mayor also called on Albany legislators to eliminate the sales tax on clothing and shoe purchases completely.
During the period from January 17th to January 23rd the 8.25 percent sales tax was eliminated on clothing and shoe purchases under $500. The New York State Legislature last Summer approved an elimination of sales tax on clothing under $100, to take effect December 1999.
"Retail sales once again soared during ‘Shop ‘Til They Drop the Tax’ week," said Mayor Giuliani. "The sales tax on clothing and shoes is one of the most regressive taxes because it hurts poorer families the most. Lower income families spend a larger percentage of their income on clothing and shoes than middle and upper income families. If we eliminate the sales tax permanently on clothing and shoes, we estimate that the City would see an additional $1.4 billion in economic activity, the creation of 19,600 new jobs and an average of $220 in annual savings for New York City families.
"New York City’s three sales-tax-free weeks have been very successful. While the elimination of sales tax on clothing under $100, beginning December 1999, is a good start, New Yorkers have spoken loud and clear -- they want this regressive tax eliminated completely. Today I am joined by leaders in the footwear and retail industry, who also agree that this tax has to go. Removing the sales tax is good for business, it’s good for New York shoppers and it’s good for the City," Mayor Giuliani concluded.
Many retail executives said that sales were up 77 percent or more from an average week in January, and they favorably compared the crowds of consumers last week to crowds during the busy holiday season.
An EDC survey of 139 store retailers reported an increase of 77.3 percent while shoe stores reported 66 percent increase in sales. Last September, when the sales tax was only exempt on clothing purchases under $100, retailers reported an increase of 48 percent. In January 1997, when the sales tax was exempt for both clothing and shoe purchases under $500, retailers saw an increase of 74 percent.
EDC President Charles Millard said, "We’ve seen time and again the economic surge that results from the elimination of the sales tax. Each year New York City loses more than $700 million in economic activity to New Jersey. Eliminating the tax on apparel and footwear would mean New Yorkers would have greater purchasing power, with 8.25 percent of what they had been spending in taxes back in their pockets. But it would also mean more than 19,600 new jobs for City residents."
The Mayor was joined today by:
- Fashion Footwear Association of New York President Dick Jacobson
- Kenneth Cole Shoes Chief Executive Officer Kenneth Cole
- Nine West Shoes Chief Executive Officer Vincent Camuto
- Steve Madden Shoes Director of Retail Mike Barnes
- Eneslow Shoes Owner Robert Schwartz
- Today’s Man Chief Executive Officer David Feld
- Modell’s Sporting Goods Co-Owners Michael and Mitchell Modell
- Super Runners Owner Gary Muhrcke
- Athlete's Foot Co-Owner Stephen Rudin
- Harry’s Shoes President Joseph Goldberg
- Stride Rite Vice-President of Corporate Communications Lorie Karnath
- Woolworth Corporation Vice President of Investor Relations Juris Pagrabs
TESTIMONIALS FROM FOOTWEAR AND RETAIL INDUSTRY LEADERS
Dick Jacobson, President Fashion Footwear Association of New York: "Good health requires you to change your shoe size as you grow, not only as children, but as adults as well. It is vital that the consumer be encouraged to have good quality footwear that are professionally fitted. Healthy feet help us feel good and make us more productive. Removing the sales tax will be a win situation for everybody."
Mike Barnes, Director of Retail Steve Madden Shoes: "Our sales throughout the City were up 125 percent!"
Gary Muhrcke, Owner Super Runners: "It was incredible. You really can’t top that. ‘Incredible’ isn’t a strong enough word. We had customers, especially the customers with children, indicating that they normally go to Jersey to buy shoes. They said that during the tax-free week they had no reason to go there."
Michael and Mitchell Modell, Co-Owners Modell’s Sporting Goods Stores: "Our footwear sales alone were up 178 percent during the tax-free week."
Robert Schwartz, Owner Eneslow Shoes: "The five best selling days in Eneslow’s history occurred during this year’s no-sales-tax week."
Eric Mudick of Eric’s Shoes: "Our business made a staggering jump with the elimination of the sales tax. This is the greatest idea Mayor Giuliani has come up with in terms of keeping New York City dollars where they belong."
Kenneth Cole: "With everything New York City has to offer, why should we sole search anywhere else?"
Tracy Crawford of Lady Foot Locker: "This week has been wonderful! We are getting bombarded! This is better than Christmas."
Vincent Camuto, Chief Executive Officer Nine West Group Inc.: "The New York market, with a focus on New York City, is one of our top three markets in the country. This tax- free concept enhances the customer’s already existing fashion desire, which has positively impacted our businesses and we would like to see it continue."
David Feld, Chief Executive Officer Today’s Man: "Our company experienced double-digit increases over last year’s tax-free week."
Joseph Goldberg, President Harry’s Shoes: "There is no question that to be competitive with the neighboring tax jurisdictions, New Jersey and Connecticut, New York must adopt a tax exempt status for clothing and footwear without a $100 price limitation. The $500 exemption is a practical level."
Juris Pagrabs, Vice President of Investor Relations of Woolworth Corporation: "Sales during the tax-free week were up over 50 percent over the previous week for the five borough area."
Louie Virola of E & S Variety Store: "Twenty percent of our inventory is apparel and footwear, and the sales tax exemption on those items brings people into the store. Our sales were up 100 percent last week."
Mike Rammal of Apollo Express: "Our store staff is usually eight employees, but this week we brought in two additional staff members to manage the increased sales."
Christine Magnatta of Bang Bang of 8th Street: "As a New Jersey resident, on a normal Saturday, I see that 50 percent of the license plates in the parking lot at the Garden State Plaza in Paramus are New York license plates. During tax-free week, you don’t see New York license plates there. When sales go up during tax-free week, it is because more people are coming into my store to shop."
Jack DeLargy of Brooks Brothers: "Sales are two to two-and-a-half times more than a typical January day with sales tax."
John Klein of Orva Stores, Inc.: "This is much better than normal. January is usually slow, but you can hear the cash registers ringing. Usually we cut back staff in January, but we kept as much staff as Christmas for this week. The $100 ceiling in September was less effective and more confusing to customers.
Bob Gilman of Paragon Athletic Goods: "We are seeing a tremendous number of customers who would otherwise be crossing tunnels and bridges to shop in New Jersey. $100 is a help, but it is not enough--you can’t buy coats, shoes or boots. The $500 ceiling is exponentially more positive than $100. It is more pragmatic. If the sales tax is eliminated permanently for goods under $500, Paragon would capture more consumers, hire more people in the warehouse, buy more phone lines, computers, etc.--the business would get bigger."
Christopher Iorio of Selby Fifth Avenue: "This has been the biggest week in the history of this store. Our sales were up 240 percent!"
Richard Brancato & Manny Nicolosi of Domino’s Men’s Shop: "A permanent elimination of the sales tax would be very good for our store since customers would have more spending money and they would probably spend it here. For example, if a customer purchases a $500 suit without sales tax, that’s a savings of $40--enough for a shirt or a tie."
Agostino Nastasi of Maraolo Shoes: "Consumers come into the stores with a different attitude. Taking away the sales tax is truly a gift from the City and government in general. Not paying taxes is a dream for all people and the dream has come true for the consumers of New York."
Albert Safdeh of Topaz: "The bill should be passed immediately and not wait until 1999. The retail business needs help right now to keep our money on this side of the river and this is one way to start."
Stephen Kocis of Timberland: "No sales tax is a brilliant idea. It will keep customers in New York as well as increase the amount of interstate and international business and will keep us competitive with our neighboring states."
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