George Pataki

January 19, 1997

by MICHAEL O. ALLEN and DEAN CHANG, Daily News Staff Writers

The Great Sales Tax Experiment began yesterday in a deep-freeze frenzy, as cost-conscious shoppers and media-conscious politicians flooded city stores to be among the first to cash in on the one-week tax waiver on clothing.

“That’s why we’re here,” said Darryl Grayson of Manhattan, his arms filled with dress shirts and ties at Macy’s at Herald Square.

“We wanted to try to beat the rush, so we got here when the store opened at 10 a.m., but I guess a lot of people had the same idea,” he said.

Under the moratorium, the 8.25% city and state sales tax is being waived on clothing purchases under $500. The waiver is expected to cost the state $20 million in lost tax revenue, but supporters, including Gov. Pataki and Mayor Giuliani, contend that the loss would be offset by employment and economy gains.

“If you drop this tax, you are going to bring more commercial activity to New York City,” said Giuliani.

But the new math seemed to puzzle some retailers and shoppers, unsure of what was taxable and what wasn’t.

“Everyone keeps asking, ‘Is this taxable? Is that taxable?’ so we’ve got to check the list,” said Karina Gonzalez, a Macy’s sales associate. “The minute we came in yesterday, they gave us the list.”

New Yorkers — always dubious of bargains that seem too good to be true — still had their complaints about the tax waiver. Some found fault with the weather, wondering why the state and city couldn’t spend their generosity in, say, April or May.

Others also found fault with the timing of the waiver.

Jacqueline Baird, a Daily News reader from Manhattan, said her credit cards were still overburdened with purchases she had made before Christmas.

Marilyn Dankins, 25, of Brooklyn, complained that the best of the winter clothes are long gone.

“They do this right after the holidays, when there’s no new clothing in the stores. They’re weeding out all the winter clothes, so all that’s left is leftovers.”

Still, she yielded to temptation and bought a pair of $40 gloves that were 50% off. Without the tax, she paid $19.99.

The tax waiver temporarily puts New York on an even footing with New Jersey and Connecticut, which imposes no tax on clothing. Dankins, like many shoppers yesterday, admitted traveling out of state just to get a better deal on clothes.

So throughout the city, clothing retailers tried to capitalize on the tax hiatus. Department stores put up tax-free signs throughout their buildings and in newspaper ads; smaller off-price stores made do with handmade signs.

“Everybody knows about it already,” said Susie Song, manager of Jumping Jumping Casuals and Sharon, two clothing stores on W. 34th St.

“On Friday, everyone was already asking me to not charge them sales tax. I told them I couldn’t, that they should take it up with the government.”

Yesterday, it wouldn’t have been very hard to find a member of the government.

In Astoria, Queens, City Council Speaker Peter Vallone shopped for a new tuxedo, shirts and ties on Steinway St.

In Manhattan Mall, Giuliani heralded the tax-free week by sounding a gong in the mall’s lower level, then headed to Modell’s, where he dropped $95.48 for Knicks home and away jerseys for his son, Yankees World Championship turtleneck for his daughter, a jogging bra for his wife and a pair of gloves and some socks for himself.

Giuliani then went to The Children’s Place, topping off his tax-free day with a purple shirt and multi-colored leggings for his daughter.

“It’s a Valentine’s Day gift,” said the mayor. “If you can keep it a secret.”

Total tax savings for the mayor: $9.36.

Gov. Pataki brought his wife, Libby, and his 12-year-old daughter, Emily, to Macy’s at Herald Square for some winter clothes.

In 20 minutes, the governor dropped $151.39 on a winter wardrobe — gloves, mittens, a scarf, three turtlenecks, a sweater and a light jacket. Total tax savings: $12.49.

“It’s a great way to shop,” said Pataki.

Better still, Pataki and Giuliani enjoyed more than a tax-free day; they also took advantage of something that mere mortal shoppers can only dream of — shopping without cash-register lines.

In both cases, stores magically opened up lines and registers for the governor and mayor of New York.