Dutchess County Executive Marc Molinaro and County Legislature Chairman Gregg Pulver today announced their proposal to eliminate sales tax for purchases of clothing and footwear items under $110 each, in 2022, as part of their continued commitment to providing sustainable tax relief for County residents.
County Executive Molinaro will present the Legislature his resolution to enact the exemption when he submits his 2022 Executive Budget on Wednesday, October 27th. If the measure is approved by the Legislature, Dutchess County will submit its request to the New York State Department of Taxation and Finance for final authorization of the tax cut, which would take effect March 2022.
County Executive Molinaro said, “Our prudent, conservative financial planning over the past several years has placed Dutchess County in the best financial position to deal with the economic challenges of the COVID-19 pandemic. As a result, we continue to offer tax relief to our residents, and this exemption on clothing and footwear highlights our ongoing efforts to cut residents’ taxes and keep those dollars in their pocket.”
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 four percent sales tax and the three-eighths percent Metropolitan Commuter Transportation District (MTA) tax. Counties are permitted to apply to the State for an exemption of their local tax on such purchases. Only eight of the state’s 62 counties have eliminated their tax on eligible clothing and footwear purchases.
The joint proposal from County Executive Molinaro and Chairman Pulver will authorize Dutchess County to request an opt-in to the State’s exemption and eliminate County tax on eligible clothing and footwear purchases.
Chairman Pulver said, “Dutchess County residents work hard for their money, and they deserve to keep as much as possible. Over the past several years, County Executive Molinaro and I have worked diligently to pass County budgets that maintain the high-quality services and programs our residents have come to expect at the lowest cost. This local sales tax exemption on clothing and footwear is the result of those years of conservative fiscal decision making, and we’re proud to give back to our residents.”
Sustained tax relief has been a hallmark priority for the Molinaro administration. That priority has been supported by the County Legislature with the adoption of seven consecutive property tax levy reductions and six consecutive property tax rate reductions as part of the annual County budget process, while maintaining and enhancing programs and services. The elimination of clothing and footwear sales tax will be part of continued tax relief presented in the 2022 Executive Budget.
Legislator and member of the Budget, Finance and Personnel Committee, Thomas Keith said, “As a member of the Legislature’s Budget Committee, we are constantly working with the County Executive to deliver tax relief directly to residents and I’m confident we can maintain our quality services while cutting taxes. We have seen week-long ‘sales tax holidays’ for back-to-school shopping, but permanently eliminating this sales tax provides year-round flexibility to families. More money staying with our residents means their quality of life will improve, especially those who are low-income.”
The County took proactive steps and made decisions throughout the COVID-19 pandemic to mitigate the negative economic impact on the county. The recently released 2020 Year End Audited Financial Statements demonstrate the County’s strong fiscal foundation, including an unassigned fund balance of just over $60 million, an increase of more than $3 million from 2019. Sales tax revenue also rebounded strongly in the last quarter of 2020 and has been well ahead of budget projections throughout 2021. The County’s 2021 cumulative sales tax receipts as of September 13th are more than 32 percent higher than those received for the same period in 2020.
County Executive Molinaro said, “Thanks to the sound decisions made over several years, we are well positioned to provide this tax relief to families at such a critical time. The measure also benefits our small businesses and bolsters the Dutchess County Regional Chamber of Commerce’s Think Local First campaign. The sales tax exemption makes shopping local even more appealing and will likely attract consumers from surround counties that maintain a tax on clothing and footwear sales.”
Chairman Pulver said, “This sales tax exemption will make a positive difference in family budgets when shopping for these essential items and a boon for shop owners who may lose sales to other areas within driving distance where exemptions are offered.”
County Executive Molinaro will be discussing the sales tax exemption and other budget proposals throughout late October and early November as he holds several public forums – both in-person and virtual – to discuss with residents his 2022 Executive Budget; dates and venues will be announced on dutchessny.gov in the coming weeks.
Following Executive Molinaro’s presentation of his 2022 Executive Budget to the County Legislature on Oct. 27th, legislators will vote on the budget on Dec. 2nd.