Starting March 1st, 2022 residents and visitors shopping in Dutchess County will not pay sales tax on individual clothing or footwear items costing less than $110. This cut in sales tax was first announced in October 2021, and adopted when Dutchess County passed its budget in December 2021. Sales tax generated from Beacon continues to be forfeited to Dutchess County - meaning the City of Beacon does not collect the money generated from sales tax to spend at its digression.
For decades, the decision for Beacon, Poughkeepsie and other municipalities in Dutchess County has been to funnel sales tax money to Dutchess County, and receive negotiated payments from Dutchess County in return. The dollar amount of sales tax generated from Beacon has not been disclosed by Dutchess County or New York State, as reported by A Little Beacon Blog, and continues to not be disclosed during Beacon’s recent negotiations with Mayor Lee Kyriacou in 2022 and signed legislation to continue the practice.
But First - The Benefit For Shoppers
According to Dutchess County’s press release from Dutchess County Executive Marcus Molinaro sent 2/28/2022: “The sales tax exemption on clothing and footwear was adopted as part of the 2022 County Budget which provided for and is part of several efforts to deliver sustained tax relief to Dutchess County residents with more than $20 million in annual tax relief, including the largest property tax decrease in County history.”
“Starting Tuesday, residents and visitors will now pay less when they need to make essential clothing and footwear purchases. Combined, we are delivering $20 million in sustained tax relief.”
This means that every item in a store that is clothing or footwear and is under $110 will not be charged sales tax. Shops that ring their sales up manually will need to remember to do this when writing out the receipt. Shops that use point of sale (POS) systems and bookkeeping software like QuickBooks will have an easier time of assigning what products within their inventory have sales tax attached.
Different Sales Taxes Attached To Each Purchase In New York State
There are different taxes attached to retail sales. “In New York State, clothing, footwear, and items used to make or repair exempt clothing which are sold for less than $110 per item or pair are currently exempt from the State’s 4% sales tax,” according to Dutchess County’s press release.
“Consumers currently pay the Dutchess County sales tax rate of 3.75% and the 3/8th% Metropolitan Commuter Transportation District (MTA) tax, for a total of 4.125% tax on these purchases,” the press release outlined. “Effective March 1st, 2022, Dutchess County becomes one of only 9 counties in New York to eliminate county sales tax on clothing and footwear items under $110, and the only county in the mid-Hudson Valley region to do so.”
Those counties are or have been: Chautauqua County, Chenango County (outside the following) Norwich (city), Columbia County, Delaware County, Dutchess County, Greene County, Hamilton County, Tioga County, and New York City.
The sales tax exemption is a per-item exemption and doe snot include the 3/8th% MTA tax.
According to the press release, Dutchess County retailers were notified of the upcoming sales tax change by the New York State Department of Taxation and Finance. Specific details of the exemption are available online Publication 718-C – Sales and Use Tax Rates on Clothing and Footwear.
Details Of Type Of Clothing Exempt
According to the legislation, “the exemption applies only to clothing and footwear worn by humans. It also applies to most fabric, thread, yarn, buttons, snaps, hooks, zippers, and similar items that become a physical component part of exempt clothing, or that are used to make or repair exempt clothing.”
Items not included in the exemption include costumes or rented formal wear; items made from pearls, precious or semi-precious stones, or imitations; athletic equipment; or protective devices, such as motorcycle helmets.