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NJ now taxing furs again

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http://www.nytimes.com/2006/07/14/ny.../16njweek.html

July 14, 2006

The Week in New Jersey

Furs Hit, Too, as Sales Tax Increase Kicks In

ACROSS New Jersey this weekend, shoppers and business owners face the rudest of awakenings when a 1 percent increase in the sales tax - the fulcrum of the recent government shutdown - takes effect.

But the adjustment may be even more jarring for the state's furriers. Nine months ago, they were told that they no longer had to collect sales taxes at all, but the state budget signed last weekend includes a provision for a new "Fur Clothing Gross Receipts Tax."

Like the sales tax, this surcharge on fur goods was taking effect Saturday morning. But while the sales tax rises to 7 percent from 6 percent, the gross receipts levy on furs is 6 percent.

That was of small solace to New Jersey furriers. "That's terrible," said Teli Natsis, whose family owns the Fur Outlet in Englishtown, when told that the tax was kicking in. "We just stopped paying taxes."

Furriers were included in an effort to streamline sales tax rules last October. The change was designed to bring fur items - which were taxed - in line with the rules for other clothing, which were not taxed.

In the scramble to find additional revenue in the past few weeks, lawmakers turned their eye again toward furs. The state expects to bring in about $5 million from the fur tax. Clothing will still be tax exempt.

It is not the last new levy. In October, the sales tax will be extended to things like magazines and security services.

RICHARD G. JONES
 
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