N.Y. State May Increase Tax on Luxury Goods

Albany, N.Y. New York Gov. David Paterson unveiled a 2009-2010 fiscal year state budget of $12.1 billion on Tuesday, and proposed an additional sales tax of 5% on luxury goods costing more than $20,000. The news was announced one month earlier this year in order to deal with the economic crisis.

The tax increase would also impact purchases of cars costing more than $60,000, vessels (including but not limited to yachts) costing more than $200,000 and non-commercial aircrafts costing more than $500,000.

The budget is designed to fill a $15.4 billion deficit over two years and includes a variety of tax increases, as well as layoffs and a reduction in school aid.

Paterson also proposed an elimination of the sales-tax exemption on clothing and footwear less than $110, replacing it instead with a twice-a-year tax holiday during which clothing and footwear under $500 would not be subject to sales tax.