Luxury Items Sell Briskly in Days Before Tax Begins

The rich know a bargain when they see one.

Last week, for example, a woman who lives on an out-of-state ranch telephoned her jeweler in Beverly Hills. “What should I have before the tax?” she asked H. Gordon Chaves, the manager at Laykin et Cie.

He knew exactly what she meant: the new federal “luxury tax” that takes effect Jan. 1.

And he knew exactly how to help. He commissioned photographs of diamonds, emeralds, rubies and “several important rings. . . . That sort of thing,” he said. Chaves rushed the personalized catalogue to his publicity-shy client so she could quickly place her order.

In sum, the discerning millionaire or billionaire can save a bundle by buying now. Remember, only four shopping days left.

Passed by Congress as a deficit-fighting measure, the 10% excise tax will apply to the portion of retail prices that surpasses thresholds for certain big-ticket items: $10,000 for jewelry and furs; $30,000 for cars; $100,000 for yachts, and $250,000 for airplanes.

For example, a $20,000 necklace will cost an extra $1,000 in five days. That $210,000 Rolls-Royce Corniche you’ve been coveting will be an additional $18,000.

No one is more aware of the closing window of opportunity than those who cater to the uppermost of the upper crust. During a dismal Christmas season for most of the nation’s retailers, many purveyors of tax-eligible goods say that they did at least as well as last year--and in some cases, much better. They attribute their good fortune to the levy.

Car dealers, in particular, have been urging customers in person and in advertisements to make purchases before the impending tax. They say they are getting a good response.

“Tax Beater Buys,” proclaims a newspaper advertisement for Century BMW in Alhambra. At the showroom of Beverly Hills Ltd. Mercedes-Benz, a sign advises, “Last chance to save . . . only ‘til Dec. 31, 1990.” The sign is perched on the windshield of a spiffy $84,580 model, complete with sliding roof, leather upholstery and first-aid kit.

“Even our clientele likes to save a little money,” said Matt Lindmark, general manager of Hornburg Jaguar Inc. on Sunset Boulevard at the west end of the Strip. “They are sharp business people.”

He said at least six of Hornburg’s car sales in December were made to beat the luxury tax.

The story is much the same in many of the most exclusive jewelry shops.

“Oh, yes, there’s been a lot of activity because of it,” confided a sales clerk at Tiffany and Co. on Rodeo Drive in Beverly Hills. He turned his attention back to his telephone. He needed approvals for two credit card transactions.

“One is for $24,016.86,” he murmured into the receiver. “And the other is for $21,600.16.”

Up the street, at Fred Joaillier Inc. jewelers, general manager Sergio Baril said sales were up 30% over last December.

One regular patron, Baril said, has a wedding anniversary in January. Each year, he makes a spectacular purchase for his wife to mark the occasion.

“He likes to buy after the holidays,” Baril said. “It’s a much calmer time. And if you’re going to spend that much money, you wait until the last minute to squeeze every drop of interest out of it first.”

But this year, “he had in mind a six-figure item,” Baril said. “He called for advice and we suggested that he buy it now.”

The sudden surge in sales, however, does not a real boom make. “We’re just stealing a few sales from January,” said Jaguar dealer Lindmark.

Shoppers said Lindmark is right. They explained in interviews that they aren’t making more purchases this year, just making them earlier. In the guarded tradition of wealth, none would give their names.

A captain of the movie industry got a black Jaguar last week at Terry York Motor Cars in Encino simply because he wanted a new car. (The old one, he says, went to his ex-wife). But he made sure to close the deal before New Year’s Day.

“If he had bought that Jaguar Jan. 2, I would have killed him,” said a penny-wise companion.

A producer said he and his wife were in the market to replace their two Jaguars, mainly because their two 1988 models were “depreciating rapidly.” He said he’s buying his wife another Jaguar, but treating himself to something else.

“I didn’t like my Jag,” he said. “I’ll buy another kind, but I will be buying before the first of the year because of the tax.”

Some upscale merchants fear that after New Year’s Day, their mini-boom will turn to a bust.

“It’s going to hurt our industry terribly,” said Sid Klein, vice president of Frances Klein Antique and Estate Jewels Inc. on Rodeo Drive. He said Congress is discriminating against some businesses that sell to the rich, while letting others off the hook.

“For instance, clothes,” he said. “A necktie for $125--that, to me, is a luxury. Or you could buy a designer gown for $10,000. She wears it twice and never sees it again. Now that’s a luxury.”

Some are not so alarmed about an imminent downturn in sales.

“It’ll make people think twice,” said furrier Merrill Lowell, owner of Edwards-Lowell on Canon Drive, who added that several of his customers hurriedly bought sables to avoid the tax. But still, he’s not worrying.

“Our class of people, the moneyed people, have not paid too much attention. If they want it,” Lowell said, “they’ll buy it.”