New York State Rejects Luxury Tax

New York State AssemblyThe New York legislature officially passed the state’s FY 2009-2010 budget without imposing a 5 percent luxury tax on jewelry and watches over $20,000. A move applauded by Jewelers of America.

“Because changes to the budget can occur until the last minute, we wanted to wait until the vote had taken place – and that the luxury tax was not included – before claiming victory,” Matthew A. Runci, JA president and chief executive officer, said in a statement Monday. “This is a huge victory for jewelers in New York State and demonstrates how powerful the voice of the jewelry industry can be when it works together.”

In January, JA and the American Watch Association hired a lobbyist in Albany, the state capital, to advocate on the industry’s behalf. Those efforts coincided with an anti-luxury tax letter and fundraising campaign, in which sample letter-petitions and the addresses of key New York State legislators and Gov. David Paterson—who proposed the tax as one of many measures to cover a budget shortfall—were provided to industry stakeholders in the retail and supplier community. The New York State Jewelers Association also helped to galvanize members to call or write to their representatives.

“Interested parties, from single-store independents to multinational luxury brands, pitched in to send a clear message to Albany that this unworkable tax legislation would have been a burden to jewelers and unbeneficial to New York State,” Runci said.

The action follows a similar battle in the Illinois, where a similar luxury tax proposal was tabled by the Illinois State Legislature’s Revenue and Finance Committee. JA launched a similar anti-luxury tax letter and fundraising campaign in this state, reaching out to its state affiliate, the Illinois Jewelers Association, and the non-affiliated Chicago Jewelers Association.