The New York Department of Taxation and Finance has issued a memorandum reminding taxpayers that for the period April 1, 2011, through March 31, 2012, clothing, footwear, and items used to make or repair clothing (clothing and footwear) sold for less than $55 per item of clothing or per pair of footwear will be exempt from the state's sales and use tax and the state-imposed sales tax in the Metropolitan Commuter Transportation District (MCTD). In addition, the state's prior exemption for clothing and footwear sold for less than $110 will be restored on April 1, 2012. That exemption had been in effect prior to October 1, 2010. [CCH Note: the less-than-$110 exemption was suspended from October 1, 2010, through March 31, 2011, by Ch. 57, Laws 2010.]

County and city clothing and footwear exemption: Certain localities previously elected the less-than-$110 exemption. Those local exemptions remain in effect. Accordingly, clothing and footwear sold for less than $55 in localities with the less-than-$110 exemption are exempt from both state and local sales taxes from April 1, 2011, through March 31, 2012. In addition, clothing and footwear sold for $55 or more but less than $110 per item of clothing or per pair of footwear are exempt from local tax but not from state tax. The department noted that localities have the option to repeal the less-than-$110 exemption effective March 1, 2012. Nassau & Suffolk did not exempt anything, so their local sales tax rate of 4.25% applies. New York City's rate is ZERO percent.

Columbia County elected to exempt clothing and footwear sold for less than $55. That exemption is effective April 1, 2011, through March 31, 2012. Columbia County's less-than-$110 exemption resumes April 1, 2012.

Transitional provisions: The memorandum also discusses special transitional provisions regarding orders for clothing, footwear, and items used to make or repair clothing; rain checks; layaway sales; and returns and exchanges.

The department also updated Publication 718-C, Sales and Use Tax Rates on Clothing and Footwear, which contains the current listings of which counties and cities exempt clothing and footwear, as well as the applicable rates of tax on clothing and footwear in counties and cities that do not exempt them.