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Local Sales Tax GrowthAnnual Collections for 2019

Robert Caracciolo, Research Analyst Division of Local Government and School Accountability

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Topics

• Summary of local sales tax in New York

• Statewide and regional overview

• County and city sales tax collections

• Per capita collections

• Factors and influences

• Impact of AIM-related payments on counties

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Local Sales Tax in New York

• Sales tax is administered by the State

• Counties and cities can impose a general sales tax on goods and services

• Local sales tax rates range between 3.0 and 4.75 percent

• Many counties share a portion of their collections with cities and towns within their borders

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Statewide Annual Growth

• Local sales tax collections in New York State totaled $18.3 billion in 2019

• Collections grew by 4.7 percent, or $815 million, over the previous year

• Growth was slower in 2019 compared to 2018 (5.3 percent), but it still exceeded growth in all other years since 2013

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Statewide Quarterly Trends

• Collections grew fastest in the second half of 2019

• Third quarter’s year-over-year increase of 6.3 percent was the strongest

• Collections in the first and second quarters grew significantly slower by comparison

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Regional Analysis• Every region’s increase in

collections slowed in 2019, except in the Finger Lakes and Mid-Hudson regions

• Collections in the Mid-Hudson were the strongest, but this was partially due to a tax rate increase in Westchester County

• New York City’s increase of 5.0 percent continues a pattern of strong growth

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County Collections• Collections grew in 54 of the

57 counties outside of New York City, with an average growth rate of 4.4 percent

• Strongest growth:

– Westchester (12.6 percent)

– Rensselaer (8.4 percent)

• Weakest growth:

– Delaware (-2.1 percent)

– Fulton (-0.8 percent)

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Westchester County

• County’s sales tax rate increased by 1.0 percentage point for a total State and local rate of 8.375 percent

– Rate increase effective August 2019

– Received an additional $54 million in sales tax revenue in calendar year 2019 as a result of the rate increase

– County’s growth in collections would have been 2.8 percent (rather than 12.6 percent) without the rate increase

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City Collections• Seventeen cities (outside of NYC)

that impose their own general sales tax had an average growth rate of 3.6 percent in collections

• Strongest growth:

– Oneida (8.6 percent)

– Norwich (8.4 percent)

• Weakest growth:

– Gloversville (-4.4 percent)

– Salamanca (-2.2 percent)

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Collections Per Capita• Local sales tax collections per

capita were $931, an increase of $55 over the same period last year

• Highest per capita:

– Suffolk County ($1,104)

– New York City ($1,064)

• Lowest per capita:

– Washington County ($358)

– Orleans County ($437)

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Factors and Influences

• The statewide labor market remained firm throughout 2019, with continued employment and wage growth

• Consumer spending also held up well throughout the year, despite slightly reduced consumer confidence compared to prior years

• Strength in collections could be related to a State policy change aimed at increasing collections on internet sales; no data available

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Motor Fuel Collections• Collections from the sale of

motor fuel are an important component of overall sales tax collections

• Motor fuel collections declined by 4.2 percent in 2019, which likely dampened total sales tax revenue for the year, especially upstate

• Closely related to the growth and decline of gas prices

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AIM-Related Payments

• SFY 2019-20 Enacted Budget eliminated State funding to the Aid and Incentives for Municipalities (AIM) program for 1,326 towns and villages

– Pursuant to this law, county sales tax revenue is to fund the $59 million “AIM-related” payments to those affected towns and villages

– As of December 2019, $44.6 million in revenue was withheld from counties; remainder in May 2020

– County-only sales tax collections would have grown by3.9 percent (rather than 4.4 percent) when excluding the revenue withheld

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Links and Contacts

Downloadable Report

Local Sales Tax Collections for 2019

Questions or Inquiries

localtraining@osc.ny.gov

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Thank You

Division of Local Government and School Accountability