Residents brace for slew of tax hikes

Posted: Updated:

Beginning Monday, consumers will have to pay a state sales tax on all purchases made over the Internet from retailers that also have brick-and-mortar stores in the state of New York.

The sales tax is also being extended to black car and limousine services. Rafael Shrem, the owner of Marathon Car Service in Nanuet, worries that the new tax will hurt his business.

"We're very competitive with prices," Shrem says. "But when you add 10 percent to $100, 8 percent to $100 - it's $8 more; it's a lot of money for some people, so it's another reason for them to cut back on car service."

The tax increases come as a result of passing the state budget in April. Assemblyman Ken Zebrowski says it was a flawed budget that lawmakers tried to improve.

"It's something we didn't want to do," he says. "But frankly something we had to do. We had a historic $17.6 billion budget gap that needed to be closed some way."

An additional 5 percent tax will be levied on car rentals beginning Monday as part of the $1.8 billion MTA bailout package. Starting Sept. 1, it will also cost more to obtain a driver's license or a learner's permit. On Oct. 1, the payroll tax on businesses goes into effect to help close the MTA's budget gap, and a month later cab fares in New York City will be increased by 50 cents.

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