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TAX INCREASE SNEAKING UP ON MANY

Both consumers and merchants seem to be caught off guard by the swiftness with which New York State is raising its sales tax rate.

Many do not know that the state sales tax increases from 4 percent to 4.25 percent Sunday. That will bring the total sales tax to 8.25 percent in Erie and Niagara counties. And consumers will once again have to pay sales tax on all clothing -- even items costing less than $110, which were previously exempt.

"I don't think people realize that it's going to happen June 1," said Rick Balicki, owner of Hertel Jewelers on Hertel Avenue. "Not one customer has said anything about it."

Customers buying big-ticket items such as jewelry, cars and boats would stand to gain the most by buying before the sales tax rises. For example, consumers will pay an extra $50 in sales tax on a $20,000 car.

"No one, not a salesperson or a customer, has come to me and said I need to take delivery by Saturday because of the sales tax," said Tom Kanaley, general manager at Fuccillo Chevrolet on Grand Island. "More people have talked to me about the smoking ban."

Few businesses are urging customers to buy now to avoid the tax increase.

"It's only a quarter of a percent," said John Simley, spokesman for Home Depot, which has 10 stores in Western New York. "If you buy $1,000 worth of merchandise, it's only going to cost an extra $2.50. It's really not significant enough to warrant any action on our part."

Some business managers and owners had heard that the state increased its sales tax because of budget problems, but had no idea the increase was going to happen so soon.

It was just two weeks ago that the State Legislature overrode all of Gov. George E. Pataki's vetoes. The state Department of Taxation and Finance scrambled to mail a half-million letters to businesses that collect sales tax. The last letters went out Tuesday.

"We don't expect there'll be many retailers who will forget," said spokesman Tom Bergin.

However, businesses that do not collect sales taxes at the higher rate will have to pay the state the extra money out of their own pockets.

e-mail: lhaarlander@buffnews.com

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