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Retailers Cope with Increase in State Sales Tax

By Eileen Buckley

Buffalo, NY – An increase in the state's sales tax kicked in Sunday. Under a new state law, the tax jumped to four-and-a-quarter percent.

As part of the newly adopted state budget, retailers were forced to change their cash registers to charge the new sales tax rate. But there's also a new rule. Merchants must charge and collect both state and local sales tax on clothing and footwear exceeding $110 per item.

Meg O'Rourke, who operates Suzn O', a women's clothing store on Main Street in Snyder, says it is the customer that is mostly affected, but the higher rate could eventually have a negative impact at retail shops.

"Right now, I think with the economy the way that it is, anything that will negatively affect sales, or prevent people from wanting to buy, is bad for retailers," O'Rourke said.

O'Rourke says the higher sales tax rate could forced customers to travel to places like Erie, Pennsylvania where there is no state sales tax.

"I think in Buffalo it will force people who can get the same things from a store out of town to do more catalogue shopping," O'Rourke said. "If you buy out of state, there's no sales tax."

Like other business owners, O'Rourke says the government continues to make it harder to conduct business in New York State. In fact, she knows first hand. Last December, O'Rourke opened a second Suzn 'O shop out of state in Nantucket. She says the sales tax rate is lower and there's less paperwork.

"There's a zero percent sales tax up to $175. And then it's only five percent if you go above that," she said. "It's just a lot less to keep track of. And there's a lot less paperwork, too.

"Their sales tax reporting form is the size of a postcard and takes five minutes. In New York State, it's four pages and takes a couple of hours to complete."

According to the Retail Council of New York State, merchants say they didn't have much time to make needed changes at their stores for the new sales tax rate. But the Council says two sales tax free holidays are planned for consumers. the first takes place at the end of August. The second sales tax free week will be held in January.