Should Downtown Buffalo Be Sales Tax Free?
- Sales Tax News
- Feb 4, 2016 | Gail Cole
At their peak in the 1980s, hundreds of malls were built per year. Americans stopped shopping downtown and switched their spending to the new suburban malls. When that happened, many downtown retail areas took on a ghost-town quality.
But the recent devastating economic recession has hurt the mall. Although many high-end malls are thriving, the New York Times reports that more than two dozen middle or working class malls have closed since 2010, and 60 more may soon follow. In fact, it’s predicted that 15% to 20% of malls (some say up to 50%) will be closed or repurposed in the coming years. And that gives downtown retail an opening.
In the heart of Buffalo, New York, old buildings are being renovated and new restaurants are opening. Still, there are few new retail shops. One man believes that eliminating state and local sales taxes in the downtown is just what is needed to encourage retail development.
Developer Rocco Termini (who happens to own a great deal of real estate in downtown Buffalo) is lobbying for a sales tax free zone in the central business district. “We need to start our focus on developing downtown retail,” he says, and adds that saving the 8.75% in sales tax would draw consumers.
Such a move would be unprecedented. Perhaps the closest thing to it is the exemption for arts that was instituted in Rhode Island in late 2013 to help old industrial towns reinvent themselves. Most state and local governments rely on sales tax revenue to balance their budgets; should they forego that revenue in order to encourage retail growth?
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