Northeast - NYS sales tax on cycling clothing and gloves in particular - who is right?

Hi there

I bought a pair of gloves for $29.99 at a certain well-known bike store in Manhattan. When ringing up the amount, they additionally charged me $2.51 in sales tax.

As I was signing the receipt, I said to the clerk, "oh, that's weird, I thought that there was no tax on clothing". I wasn't being sarcastic at all and wasn't accusing them of ripping me off. After all, if they collect money in tax revenue (and it's in the computerized accounts as such), they're only going to pass it straight on to NYS, there's no benefit to them. I was just making the remark in passing, in a kind of "isn't that odd?" way. The clerk was very snotty and spat back, "of course there's tax, there's always tax".

Frankly, his pissy attitude ticked me off, so I kept the receipt and I'm applying to NYS for a refund (there's a form for it on the website here: " Application for Credit or Refund of Sales or Use Tax " http://www.tax.state.ny.us/pdf/2007/fillin/st/au11_207_fill_in.pdf ) to see whether they should have charged me or not.

I'll name and shame the store if NYS says that sales tax shouldn't have been charged. Although my $2.51 is nothing to have a heart attack about, if you add it up over the year, they'd be unnecessarily taking thousands of dollars from the clients for no reason. On the other hand, it wouldn't be in their interest to collect more money than they would have to because it would make them uncompetitive, wouldn't it?

Does anyone know here off the top of their head why sales tax would have been charged? Does the clothing exemption only relate to NYS taxes and not city taxes? Are gloves not considered clothes? Are cycling gloves considered specialist sports gear and not clothes? Anyone? Bueller...Bueller...Bueller?

Well, it is a fairly recent phenomenon.
From the New York City Web site:
There is no City sales tax imposed on the purchase of clothing and footwear regardless of the amount. The New York State tax rate of 4.375% (including the Metropolitan Commuter Transportation District rate) was repealed effective April 1, 2006, and the New York City tax rate of 4% was eliminated effective September 1, 2005 for items under $110. For items over $110 the tax was eliminated effective September 1, 2007.
Maybe your gloves are considered sporting goods?
And please forgive a clerk a "pissy" attitude. What a crap job.

Which bike store?

After all, if they collect money in tax revenue (and it's in the computerized accounts as such), they're only going to pass it straight on to NYS, there's no benefit to them.

As Bklyn, pointed out, you should not have been charged sales tax if these items are considered clothes. Unfortunately, they probably fall under the category of sporting goods and not clothes. You are likely to be able to get a refund if you do apply and list the items as gloves and shoes and not cycling gloves and shoes.

I highlighted part of your post above mostly because I did a ride with Bklyn and we might have discussed this at one point. What you said above is not quite true. In the world of no taxes there is a market price, and the store charges it. When a tax is imposed, for most goods, the store (who is in charge of collecting and remitting the tax) will pass on part of the sales tax on to you as higher prices. However, they will also eat some of the tax by lowering prices. The simplest way to think of this is that if there is a tax of one dollar on the gloves, the store will not raise the price by the whole dollar, but maybe by $0.50 (or some other number less than a dollar).

The point is that they ABSOLUTELY have an incentive to charge you sales tax when they shouldn't to recover some of the lost revenue from lower prices. Except for certain types of goods, sales tax is not a total pass through to the government.

Good luck getting your refund!

/cp

Sales tax is supposed to go from the vendor's hands to the state.
The only way a store benefits is if they are collecting the sale in cash and don't claim the sale thus keeping the profit and the sales tax.
The state discourages cheaters by imposing severe penalties if they catch you while performing an audit.
I'm in a service business and collect sales tax. Every 3 months I calculate what I've collected and send it to the state.
They give a small fee for preparing the form and submitting the tax to them. It's a very small fee and it's capped.

Just googled the tax code and got this:

Equipment items, such as tool belts, hard hats, and sport, bicycle and motorcycle helmets, though
worn on the body, remain taxable. Protective goggles and safety glasses (unless prescription) for sport or
occupational use, protective sport or occupational masks or pads, hockey and baseball fielders’ gloves or
mitts, ice skates and roller skates, fireplace mittens, and similar pieces of equipment (sporting or
otherwise) also remain taxable.

It's not very clear if cycling gloves or shoes are included.

It may depend on the individual store or the individual who rings up the sale. I bought a pair of Pearl Izumi gloves at Paragon, back in June for $21.95, and (according to Quicken) didn't pay any sales tax on them.

Larger stores like Paragon, which probably have a computerized inventory, may encode whether items are taxable or not. Smaller shops may be a bit more casual about determining which items are taxable and which aren't.

Just googled the tax code and got this:

Equipment items, such as tool belts, hard hats, and sport, bicycle and motorcycle helmets, though
worn on the body, remain taxable. Protective goggles and safety glasses (unless prescription) for sport or
occupational use, protective sport or occupational masks or pads, hockey and baseball fielders’ gloves or
mitts, ice skates and roller skates, fireplace mittens, and similar pieces of equipment (sporting or
otherwise) also remain taxable.


Interestingly enough, bicycle helmets are not taxable in Connecticut because the state wants to encourage the purchase and use of safety equipment. If only their mass transit policies were as enlightened.

If it has an RN number, then it's CLOTHING. Under federal law, it can't be imported without one.

Sportswear is sports WEAR. Clothing.

Call the store and have the sales tax credited back. Also tell them they shouldn't be charging tax on clothes period.

Clothing = ANYTHING WITH AN RN NUMBER.

For anyone that's interested, I just got a check from the State of New York, refunding the sales tax I paid on the cycling gloves. Apparently they classify the gloves as clothing, and clothing is not subject to NYS sales tax.

The store in question is Gotham Bikes, and if the above is correct, then they've been overcharging their clients for no good reason (although I think it's probably ineptitude/a mistake rather than fraud, because there's no great benefit to them). I'll be contacting the store manager/accountant in due course, and throwing in the detail about the clerk being snotty about it while I'm at it.