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July 16, 2010

DiNapoli: Sales Tax Collections Improve Across New York State

Local and county sales tax collections increased 10.6 percent across New York during the first half of 2010 – the first significant increase since 2008 – according to a report released today by New York State Comptroller Thomas P. DiNapoli. However, sales tax rate increases, the extension of the sales tax to additional items in New York City and other changes to the sales tax rate and base played a role in this growth. Excluding these changes, growth in collections to date was approximately 5.3 percent.

“Sales tax collections serve as a major revenue stream for local governments across New York,” said DiNapoli. “This revenue is critical for our local governments to provide the services New York’s taxpayers depend on. An increase in sales tax collections is a good sign, and may indicate a stabilizing economy. But the latest economic news is troubling, and we’ve still got a long way to go before we reach pre-recession collection levels.”

DiNapoli’s report notes that there are signs sales tax revenues may be stabilizing:

  • Local sales tax collections, including New York City, increased by 10.6 percent during the first half of 2010, compared to a 9.2 percent decline in the same period the year before. Roughly half this growth was due to tax rate and base changes.
  • New York City sales tax collections increased by 20.6 percent during the first half of 2010, compared to an 11.6 percent decline during the same period a year ago. Again, roughly half of this growth was due to tax law changes.
  • County sales tax collections outside of New York City grew by 3.7 percent in the first half of 2010, compared to a 6.9 percent decline during the same period in 2009.

Although local and county sales taxes grew across New York, not all regions experienced the same growth. The report indicated the following:

  • Collections in Western New York declined slightly and collections in the Capital District were essentially flat;
  • Tioga County and Seneca County experienced deep declines in collections due to technical adjustments by the state Department of Tax and Finance; and
  • Chemung County and Jefferson County collections grew by approximately 10.9 percent because of one large vendor filing and as a result of technical adjustments that were made.

The report also noted that, while this is the first positive news on sales tax collections since 2008, sales tax collections in New York still significantly lag behind pre-recession levels.

Click here for a copy of the report.



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