N.Y. Luxury Tax Proposal Defeated, Says AWA

New York State AssemblyThe lobbying effort against New York Gov. David Paterson’s proposal for a luxury tax on jewelry, watches, and other products has apparently paid off.

The American Watch Association has sent an e-mail to members on Monday saying that the New York State Legislature has agreed to large-scale tax increases to close a $16 billion budget deficit—which has grown in recent weeks. However, the bill, which is expected to be voted on Tuesday and Wednesday, will not include the luxury tax proposal.

The decision followed an intensive three-week lobbying effort by AWA and Jewelers of America, which included petitions from its members.

“According to our main lobbyist Jim Carr, ‘our message and concerns were clearly heard by lawmakers in both houses, particularly those from the New York City metropolitan region,’ ” said Toby Collado, AWA executive director, in an e-mail to its members.

Instead, according to AWA, agreements are reportedly in place for an increase in personal income taxes for those earning in excess of $250,000 annually. These revenues, in addition to many smaller taxes and fees, will combine with federal stimulus funding to close the projected budget gap for FY2009-2010. New York’s total state budget will increase over the prior year, to now total nearly $132 billion.

The tax, first proposed by Gov. Patterson in December, 2008, those purchasing jewelry in excess of $20,000 would pay a 5 percent sales tax.
 
The tax also would have been imposed on aircraft costing more than $500,000, yachts costing at least $200,000, cars costing more than $60,000, and furs costing more than $20,000.