Statewide Coalition Opposes New York Sales Tax on Marketing Materials

ALBANY, NY—04/07/10—New York’s marketing and printing industries have joined together with letter carriers and business advocates to oppose a recently released State Assembly budget proposal that would impose a new sales tax (on average 8% statewide) on promotional and marketing materials sent by New York businesses to both out-of-state and in-state customers.

The proposal (A.9710-B Budget Article VII – Part R) calls for the repeal of an important sales tax exemption (Subdivision [n] of section 1115 of the State Tax Law) that was originally enacted in 1989 and updated in 1997 to protect New York State-based companies against out-of-state competitors that enjoyed more favorable tax treatment. Prior to the enactment of these important measures, New York companies were charged sales tax on materials sent to customers when other states exempted such activities. As a result, this printing and marketing work was often sent to non-New York State companies, costing the State valuable jobs and tax revenue.

“Imposing a sales tax on direct marketing in New York is the wrong prescription in the midst of an economic recovery. Stimulating business and supporting jobs should be the focus. A new tax will do neither,” said Linda Woolley, Executive Vice President, Government Affairs, at the Direct Marketing Association.

If this proposal is enacted, we will see a mass migration of these activities out of New York as the printing and marketing industry is very cost-sensitive to even the smallest of increases. This is simply a cost increase that many businesses will be unable to absorb, forcing them to either relocate outside the State or close their doors completely.

“This repeal will cost New York State’s printing industry upwards of 4,200 manufacturing jobs across the state and $400-600 million per year in lost revenue. These are primarily blue collar jobs New York State can ill afford to lose,” said Timothy Freeman, President of the Printing Industries Alliance based in Amherst. “In addition to the economic and social cost of losing those jobs, our customers will take that business out-of-state and possibly out of the U.S. Therefore, we call on our State Legislature to keep these jobs in New York by rejecting the repeal of Section 1115(n).”

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