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Businesses weigh in on potential county sales tax hike

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St. Lawrence County businesses are split in their positions over a the potential for a 1 percent increase in the county’s 3 percent sales tax.

Sellers of big-ticket items like cars say they are largely opposed and smaller retailers land either in favor of the idea or express apathy.

The county Legislature is faced with the possibility of a 19 percent property tax increase in order to fill a $9.3 million gap in its approximately $260 million budget. A sales tax increase is being billed as a possible means to refill the county’s coffers.

“I am looking at that as a revenue source that would generate about $14 million,” said County Administrator Karen M. St. Hilaire. “That would go a long to solve the $9.3 million gap.”

Before the county could increase the rate, however, the State Legislature would have to pass a home rule bill. So far it has not been taken up in the Senate.

Some view the county’s desire to raise the sales tax rate as a means to generate revenue without having too great an impact on residents.

Lynn L. Blevins, owner of Blevins Bros. Chrysler and Dodge dealer in Ogdensburg, said raising sales tax might mean that non-residents will help generate revenue for the county, but the impact on local businesses would be harmful.

The county’s relatively low sales taxes is “really our only advantage,” said Mr. Blevins. He says out-of-county shoppers may be discouraged by a higher rate.

The county is among a few in the state which have not raised the sales tax above the 3 percent maximum allowed under state law.

Effect On Pricing

Gregory M. Carbino, owner of Carbino’s Jewelry Store, Ogdensburg, said the proposal could have a significant impact on Canadian traffic.

“With Canadian money at par, they’re flocking over here,” he said. “We’re getting this influx of people because of the lower tax rate.”

Patrick J. Peets, who owns Peets Jewelers in Massena, said he is against the move.

“We sell a lot of high-ticket items, and with the economy the way it is and the price of gold the way it is, prices are already higher than normal and now they want to add another one percent,” he said. “That’s going to add more to the retail, and we’ll have to cut into our margins even more because people aren’t going to want to pay that price.”

Mr. Peets said he understands the county’s situation, but he feels there are other steps that can be taken before increasing the sales tax.

“They need to look at cuts instead of raising costs and adding more burden to St. Lawrence County residents,” he said.

St. Lawrence Centre Marketing Manager Ronald J. Patnode also said he was opposed to the move, although it would likely hurt the mall’s tenants more than the mall itself.

“We, as a mall, are a landlord, so we don’t pay sales tax,” he said. “It’s up to the retailer. They obviously have to charge and collect sales tax.”

He said he didn’t think increasing the sales tax is a good move.

“From my point of view, we get a lot of Canadians and people from neighboring counties where the sales tax is higher, and we do have increased trade because of that,” he said. “Do I think it will have an impact? I think it will.”

Mr. Patnode said there was a reason the state used to hold “tax-free” weeks, and that was because people enjoyed not paying sales tax.

“This might help the county’s finances, but at the end of the day I don’t think it’s beneficial to the county’s retailers,” he said.

Car Dealer Opposition

Mike Sarkin, president of Maple City Auto Center, Ogdensburg, said the sales tax hike would “crucify car buyers.”

“That’s fine for buying a coat or a pair of shoes,” he said. “But on big-ticket items it really increases the cost.”

Mr. Sarkin said a 1 percent sales tax increase could translate to an extra $10 on a car buyer’s monthly bill.

Real “Frenchie” Coupal, who owns and operates three car dealerships in Massena, said he is also opposed to the move, citing the impact it will have on some of his customers.

“It will have some impact, but people will still drive,” he said.

He said the extra 1 percent in sales tax when financed over a five-year period would be mean a car payment that is a few dollars more per month.

“Who this is going to hurt it is the little guy who can’t afford the extra dollar,” he said. “It really multiplies and that’s going to hurt the little guy. We can’t forget about the little guy.”

Industrial Consequences

Retailers aren’t the only ones who would be impacted by the increase.

“Obviously any tax increase significantly impacts us because of our size,” said Alcoa spokeswoman Laurie A. Marr.

She said based on last year’s spending, a 1 percent sales tax increase would be an additional $105,000 in expenses for Alcoa’s Massena operations.

She said a 20 percent property tax increase would cost the company even more.

“A 20 percent property tax increase would be hundreds of thousands of dollars based on what they pay now,” she said.

Property Tax Vs. Sales Tax

Michele R. Scanlin prefers a 1 percent sale tax hike to seeing a large increase in the property taxes she pays for her home and the building she owns at 81 Main St., Canton.

She doesn’t expect the extra percentage point would deter customers from buying wedding gowns and other formal wear at her shop, Sposa Bella.

“We’re the only county in the area that’s not at 8 percent,” Mrs. Scanlin said. “Unlike property taxes, a purchase is optional.”

The county’s total sales tax, including the state’s 4 percent tax, is 7 percent.

She said increasing sales tax would also generate more revenue from people living outside the county who spend money here.

“A 1 percent increase is only $1 for every $100 spent,” Mrs. Scanlin said. “It’s low impact, and it would be spread among people both in the county and from outside the county.”

Phil A. Vivlamore, who owns the Sears franchise in Potsdam, said he doesn’t think a 1 percent increase would have much of an impact on his business either, and he’s strongly in favor of such a move.

“I think it should have been done a year ago,” he said. “I think they should spread the burden across all of the people in the county and not just those who own property.”

Charles J. Merriman, presdent of Merriman’s in Norwood,said he doesn’t really have a strong opinion on the issue.

“I can see both sides of it,” he said. “One percent isn’t really enough to get people’s attention, and the county needs the money.”

When asked if he felt St. Lawrence County had an advantage because of its lower sales tax, he said he wasn’t sure how many people outside the county were aware that the tax here was lower.

“I think the county might get some people who shop here, because it’s lower, but I don’t think anyone has ever really advertised it,” he said.

As for how the move would impact his business, he said he doesn’t think it really would.

“People will still shop local to buy their lumber and building supplies,” he said.”

Staff writer Susan Mende contributed to this report.

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