(The following press release was issued subsequent to our March 30 post about the possible elimination of a sales and use tax exemption for printed promotional matter in New York State. The release was furnished to WhatTheyThink by Printing Industries Alliance, which has joined a coalition of business and labor groups that oppose the imposition of new taxes on print. Tim Freeman, president of Printing Industries Alliance, says that the association also has hired a lobbying firm to help communicate the coalition’s message during ongoing budget negotiations in the New York State Senate and Assembly—Ed.) (Albany, N.Y.) New York’s marketing and printing industries have joined together with letter carriers and business advocates to oppose a recently released 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for the repeal of an important sales tax exemption (Subdivision [n] of section 1115 of the State Tax Law) that was originally enacted in 1989 and updated in 1997 to protect New York State-based companies against out-of-state competitors that enjoyed more favorable tax treatment.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)." A number of industry associations, labor groups and businesses statewide have joined together to fight this proposal in an effort to maintain the printing and marketing industries as vital parts of New York State’s economy. These groups include the Printing Industries Alliance, the NYS Association of Letter Carriers, the Mailing & Fulfillment Service Association, the Mailing & Fulfillment Service Association-New York Chapter, the American Association of Advertising Agencies, the New York News Publishers Association, Free Community Papers of New York, the Direct Marketing Association, Pitney Bowes, The Business Council of NYS, the Manhattan Chamber of Commerce, the Buffalo Niagara Partnership and the Printing Industries of America. This is a serious proposal that would have devastating consequences on these New York businesses. According to a study recently conducted by the Printing Industries of America, the imposition of this tax could cause 10%-15% of New York direct mail and other related printing to shift out of state or to electronic media as print buyers adjust their purchases. In addition to the projected 4,200 in lost printing industry jobs, there would also be further secondary job losses in related industries such as paper, ink, mailing and design. This proposal must be stopped before it destroys these industries. At a time when we should be figuring out ways to create and retain these jobs in New York State and keep our businesses competitive, enacting such a bad proposal would only make the economic situation facing our state worse and destroy a valuable sector of our economy.