Growth In Local Sales Tax Collections Remains Strong In .

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OFFICE OF THE NEW YORK STATE COMPTROLLERThomas P. DiNapoli, State ComptrollerGrowth in Local Sales Tax Collections Remains Strongin 2019 Due to Robust Second HalfStatewide TrendsLocal sales tax collections in NewYork State totaled 18.3 billion in2019 for a year-over-year increase of4.7 percent. While this was slowerthan the 5.3 percent annual growth for2018, it exceeded growth in all otheryears since 2013.1 (See Figure 1.)Collections grew fastest in the secondhalf of 2019, with the third quarter’syear-over-year increase of 6.3percent being the strongest, followedby the fourth quarter’s 5.6 percent.Collections grew 3.2 percent and 3.4percent in the second and firstquarters, respectively. (See Figure 2.)Figure 1Annual Change in Local Sales Tax Collections15%-5%5.2%4.2%5%0%9.9%9.5%10% 7.7%-0.2%-10%Recessions2.3%4.7%-6.0%-15%Source: New York State Department of Taxation and Finance, with calculations by theOffice of the New York State Comptroller (OSC).Notes: Includes New York City. Adjusted for correction adding 238 million to collectionsfor New York City in calendar year 2015.Figure 2Regional TrendsEvery region’s increase in collectionsslowed compared to the previousyear, with the exception of the MidHudson and Finger Lakes regions.(See Figure 3.) Declining gas priceswere likely the reason why manyupstate regions experienced aslowdown in growth of collections.(See Factors and Influences on page3 for more detail.)Quarterly Year-Over-Year Change in Local Sales : New York State Department of Taxation and Finance, with calculations by OSC.Notes: Includes New York City.Division of Local Government and School AccountabilityFebruary 2020

Only the Mid-Hudson region and New York City had year-over-year growth above the statewide average.Some of the Mid-Hudson region’s 7.4 percent growth was due to a tax rate increase by Westchester County.Growth would have been around 4.2 percent without the rate increase.New York City’s 5.0 percent increase continues a pattern of strong growth over the past several years, even ifits year-over-year collections did slow a bit in 2019 compared to 2018.Figure 3Annual Change in Local Sales Tax Collections by Region2016 to 20172017 to 20182018 to %5.9%4.9%4.1% h Southern idHudsonNewYorkCityDownstateSource: New York State Department of Taxation and Finance, with calculations by OSC.Notes: Includes county and city sales taxes.2Office of the New York State ComptrollerFebruary 2020

Factors and InfluencesVarious elements can influence sales tax growth, including both economic factors and State and local policychanges. The economic climate in 2019 was generally positive for sales tax growth. The statewide labormarket remained firm throughout the year, with continued employment and wage growth. Consumer spendingalso held up well throughout the year, despite slightly reduced consumer confidence over prior years. 2Another factor that likelyFigure 4had a dampening effectYear-Over-Year Change in New York State Gas Prices and Motoron collections was thefact that in 2019 gasFuel Sales Tax Collectionsprices were down forthe first time since 2016.40%Taxes collected fromGas Prices (New York)26.8%30%the sale of motor fuelMotor Fuel Sales Tax13.6%20%25.5%are a significant10%component of overall-2.6%10.9%local sales tax revenue,0%especially upstate.-3.6%-10%-5.7% -4.2%When gas prices and-26.5%-25.4%-20%motor fuel sales taxes-30%-27.9%fell by over 10 percent-29.0%-40%in both 2015 and 2016,2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019many upstate countieshad decreases in overallSources: New York State Department of Taxation and Finance, Office of Tax Policy Analysis; United Statessales tax collections.Department of Energy, Energy Information Administration, with calculations by OSC.The 2019 decline of 5.7Notes: Includes New York City.percent in gas pricesand 4.2 percent in sales taxes collected on motor fuel is less dramatic. (See Figure 4.)Finally, some of the strength in collections could be related to a State policy change aimed at increasingboth State and local tax collections on sales made over the internet. Since June 2019, online marketplacesmust collect taxes on behalf of the third-party sellers for which they facilitate sales transactions (unlessthose sellers are already collecting the tax independently).3 The Department of Taxation and Finance (Tax& Finance) has not yet released any information on how much revenue is being generated from theimplementation of this law.February 2020Division of Local Government and School Accountability3

County CollectionsBetween 2018 and2019, county-onlysales tax collections(outside New York City)increased by 4.4percent, growing in 54of 57 counties.Westchester Countyhad the strongest yearover-year increase at12.6 percent. This waslargely due to a salestax rate increase of 1.0percentage point to theCounty’s portion,bringing the total Stateand local combinedrate from 7.375 percentto 8.375 percent,effective August 2019.The County receivedan additional 54million in sales taxrevenue in calendaryear 2019 as a result ofthe rate increase.4Figure 5Change in County Sales Tax Collections, Calendar Year 2018to 2019Percentage Change Year-Over-YearDeclineIncrease less than 3%Increase between 3% and 6%Increase between 6% and 9%Increase more than 9%Source: New York State Department of Taxation and Finance.Notes: Includes county and New York City collections.Rensselaer (8.4percent), Yates (7.9 percent) and Washington counties (7.8 percent) had increases over 7 percent as well,while three counties – Delaware, Essex and Fulton – had collection decreases. (See Figure 5.)Prior period corrections and late filing changes – referred to in this report as “technical adjustments” – madeto sales tax collections by Tax & Finance can have a significant impact on overall growth (or decline).5 Forinstance, Rensselaer County’s strong year-over-year increase in collections for 2019 was bolstered by nearly 3.8 million in technical adjustments. Conversely, a total of 1.6 million in technical adjustments contributedto Delaware County’s decline in overall collections, and Fulton County experienced a large technicaladjustment of 387,000 in the month of April.4Office of the New York State ComptrollerFebruary 2020

AIM-Related PaymentsThe SFY 2019-20 EnactedBudget reduced State funding tothe State-administered Aid andIncentives for Municipalities (AIM)program for 1,326 towns andvillages, and instead funded the 59 million “AIM-related”payments to those towns andvillages with county sales taxcollections. Pursuant to this law,OSC withheld 44.6 million incounty sales tax revenues inDecember 2019 to make thesepayments to towns and somevillages, with the remainingvillages to be paid in May 2020.6When publishing the data, Tax &Finance reported the “gross” localsales tax collections for eachcounty, not adjusting for thewithholding for AIM-relatedpayments. This report, therefore,reflects that same data.However, since counties have nodiscretion over the amountswithheld to make AIM-relatedpayments, it may be morerelevant to look at theircollections with those amountsremoved from the total. By thismeasure, the total statewideyear-over-year increase for all“net” county sales tax collectionswould be 3.9 percent instead of4.4 percent. In some counties,the difference between gross andnet growth was more than a fullpercentage point. (See Figure 6.)Figure 6Impact of AIM-Related Payments on County Sales gaSchenectadySchoharieSchuylerSenecaSt. arrenWashingtonWayneWestchesterWyomingYatesCounty TotalAIM-RelatedPayments(SFY 2019-20) 834,131 309,564 869,109 272,273 303,377 468,236 163,071 257,855 394,179 288,034 151,805 236,290 1,181,879 3,709,039 322,039 245,854 148,292 234,489 160,751 41,637 198,847 314,650 123,696 244,028 225,495 2,913,307 112,154 7,571,501 534,023 769,430 2,044,951 261,322 859,326 181,905 444,324 272,852 350,980 538,799 1,333,385 649,385 488,152 151,371 93,039 245,800 600,337 392,769 7,008,742 418,858 270,314 311,562 639,160 213,907 195,676 509,428 2,244,930 181,582 111,742 44,613,633Change in Sales Tax Collections(2018 to 2019)Gross (With AIMRelated Payments)Net (Without AIMRelated Payments)Percentage-PointDifferenceBetween Grossand -0.9-0.5Source: New York State Department of Taxation and Finance, with calculations by OSC.Notes: New York City is not included in the table above because it does not receive AIM.February 2020Division of Local Government and School Accountability5

City CollectionsSeventeen cities other thanNew York City impose theirown general sales tax ongoods and services. Together,the total collections for thesecities increased by 3.6 percentin 2019 over the previousyear. The remaining 44 citiesreceive a portion of what theircounties collect.7Thirteen of the cities thatimpose sales tax experiencedincreases in year-over-yearcollections in 2019. The Cityof Oneida had the strongestgrowth at 8.6 percent, closelyfollowed by Norwich (8.4percent). Conversely, thecities of Gloversville,Salamanca, Olean andOswego saw their collectionsdecline from the previousyear, though decreasesincurred by Salamanca andOlean were mostly due totechnical adjustments.(See Figure 7.)(For a list of county and citysales tax collections, seeAppendix on page 8.)6Figure 7Change in City Sales Tax Collections, Calendar Year2018 to 2019Oneida8.6%Norwich8.4%Glens Falls6.3%White Plains5.9%Saratoga Springs5.5%Auburn5.0%Utica4.9%New Rochelle4.6%Mt. wegoOleanSalamanca1.5%-0.6%-1.2%-2.2%Gloversville -4.4%Source: New York State Department of Taxation and Finance, with calculations by OSC.Notes: Excludes New York City.Office of the New York State ComptrollerFebruary 2020

Per Capita CollectionsLocal sales taxcollections in 2019 were 931 per capita, a 55increase from 2018.8Suffolk County ( 1,104),New York City ( 1,064)and Nassau County( 1,002) had thehighest per capitacollections in the State.However, the upstatecounties of Hamilton( 970), Warren ( 930)and Albany( 929) were also quitehigh. WashingtonCounty ( 358) had thelowest per capitaamount. (See Figure 8.)Figure 8Local Sales Tax Collections Per Capita by County,Calendar Year 2019Local Per Capita Collections by CountyLocal Per Capita Collections by CountyVarious factors canLess than 500cause a disparity in 500 to 600sales tax collections per 600 to 700capita across the State. 700 to 800First, local sales taxMore than 800rates are not the samestatewide. Saratoga,Sources: New York State Department of Taxation and Finance; United States Census Bureau, 2018Population Estimates.Warren and WashingtonNotes: Includes county and city collections, and the total revenue collected in certain counties and New Yorkcounties, for example,City on behalf of the Metropolitan Commuter Transportation District. For a list of the sales tax rates by localhave lower county ratestaxing jurisdiction, see han most, while Erieand Oneida countieshave higher rates. In addition, New York City and seven surrounding counties are subject to an additionalrate that supports the Metropolitan Commuter Transportation District.9 The tax base may also be different.For example, some services are taxed in New York City that are not taxed elsewhere.10Other factors can also affect per capita collections. Tourism-heavy areas (such as certain counties in theAdirondacks or Finger Lakes) tend to have high collections per capita partly due to their low year-roundpopulations relative to high seasonal sales volumes. Counties in larger metropolitan areas can have moresales tax generated from a greater base of economic activity, and therefore high sales volume. Onepotential effect of increased internet sales and better enforcement of taxes on those sales could be tostrengthen collections in rural counties, which typically have fewer brick-and-mortar shopping establishments.February 2020Division of Local Government and School Accountability7

Appendix: Sales Tax Collections by Region, 2018 and 2019RegionCapital toga SpringsSchenectadyWarrenGlens ountyCountyCityCountyCentral New inger yCountyCountyCountyLong rangePutnamRocklandSullivanUlsterWestchesterMount VernonNew RochelleWhite PlainsYonkers820182019PercentageChange 757,651,091 790,577,0334.3% 275,109,796 43,098,930 32,729,482 88,428,881 125,341,933 12,720,821 101,627,810 55,015,895 3,285,621 20,291,922 285,271,314 44,730,539 34,619,382 95,873,627 129,739,135 13,422,386 105,276,121 56,265,689 3,494,185 21,884,6563.7%3.8%5.8%8.4%3.5%5.5%3.6%2.3%6.3%7.8% 535,237,889 547,707,0642.3% 36,874,236 9,248,855 29,814,166 29,123,688 4,451,482 363,657,366 47,471,985 14,593,989 37,657,121 9,712,526 31,219,537 30,674,231 4,836,070 371,013,689 48,084,060 14,508,6952.1%5.0%4.7%5.3%8.6%2.0%1.3%-0.6% 786,632,113 818,854,9084.1% 42,163,430 34,788,736 503,950,686 85,781,565 16,748,806 25,984,725 45,884,370 18,592,593 12,731,996 42,494,494 35,499,199 525,955,643 88,722,902 17,738,911 27,722,238 47,941,230 19,038,415 13,738,9950.8%2.0%4.4%3.4%5.9%6.7%4.5%2.4%7.9% 2,661,094,583 2,756,932,6443.6% 1,201,082,161 1,457,518,262 1,243,714,342 1,510,458,7793.5%3.6% 1,683,854,235 1,807,823,7037.4% 197,426,483 289,627,123 63,145,092 218,516,610 46,428,015 120,049,605 550,562,482 21,539,958 29,648,376 49,367,479 96,132,114 208,670,515 300,786,160 66,354,864 232,214,848 47,332,035 127,189,574 619,794,736 22,282,709 31,021,849 52,284,600 tyCountyCityCityCityCityOffice of the New York State ComptrollerFebruary 2020

Appendix: Sales Tax Collections by Region, 2018 and 2019RegionCity/CountyPercentageChange20182019 276,893,676 286,686,3833.5% 22,626,580 4,043,099 4,085,218 4,181,388 32,497,455 30,811,840 143,972,635 7,961,861 10,650,255 16,063,201 22,439,415 3,865,837 4,157,221 4,303,157 34,119,047 32,935,264 149,470,997 8,079,754 11,170,063 5% 262,696,907 271,569,0943.4% 56,909,095 31,811,712 23,792,142 78,658,684 12,489,548 59,035,722 59,424,995 31,754,703 25,045,025 80,178,190 12,974,165 62,192,0154.4%-0.2%5.3%1.9%3.9%5.3% 444,177,468 458,813,5433.3% 135,218,298 61,064,126 24,201,702 1,658,063 22,729,715 39,001,024 11,445,898 58,611,391 24,240,238 54,150,488 11,966,317 140,998,874 62,641,042 24,654,475 1,797,043 22,243,174 40,366,901 12,021,871 59,828,832 24,864,871 56,886,775 %3.2% 1,066,102,206 1,107,782,0543.9% 21,442,830 38,652,830 4,383,244 689,929 67,543,461 797,191,558 125,873,736 22,370,358 40,150,213 4,328,514 674,691 70,960,529 829,405,716 129,799,4524.3%3.9%-1.2%-2.2%5.1%4.0%3.1%New York City 7,838,561,375 8,228,694,1745.0%Other Local 1,155,345,054 1,207,748,9874.5% 17,468,246,597 18,283,189,5864.7%Mohawk ntyCountyCountyCountyCityCityCountyNorth CountryClintonEssexFranklinJeffersonLewisSt. rn tyCountyCountyCountyCountyCountyCountyCityWestern New eNiagaraStatewide TotalCountyCountyCityCityCountyCountyCountySource: New York State Department of Taxation and Finance, with calculations by OSC.Notes: Other Local includes sales taxes collected on behalf of the New York Convention Center Development Corporation, the MassTransportation Operating Assistance Fund, the Metropolitan Transit Authority Aid Trust Account and school districts. Regional totals donot include taxes collected for these purposes, but do include cities that impose a general sales tax.February 2020Division of Local Government and School Accountability9

Notes1Unless otherwise noted, all sales tax collections data in this report are taken from the New York State Department of Taxation andFinance’s AS570 reports. The AS570 reports distributions, which are called collections in this report. The rates shown in Figure 1have been adjusted for a major multiyear technical correction to New York City’s collections in 2015. For a more thorough discussionof this adjustment, see the Office of the New York State Comptroller, 2016 Local Sales Tax Collections, January 31, al-sales-tax-collections.pdf.2Federal Reserve District, The Beige Book, January 2020, efault.htm; NewYork State Department of Labor, Current Employment Statistics, accessed on January 24, 2020,www.labor.ny.gov/stats/cesemp.asp.3For more information on the State’s efforts to “eliminate the internet tax advantage,” see New York State, FY 2020 Enacted BudgetFinancial Plan, p. 91, .pdf.4New York State Department of Taxation and Finance, AS300 – Monthly Cash and Collection Distributions With Variances forAssessments, Late-Filed Returns, Rate Adjustments and Prior Period Adjustments, accessed on January 24, s tax/government/as300.htm.5As used in this report, the term “technical adjustments” refers to any of a number of collection or distribution corrections made by theNew York State Department of Taxation and Finance that are not related to current economic activity, such as late filings or errorscaught on later audit. To access “technical adjustments” data taken from the New York State Department of Taxation and Finance’sAS300 and AS310 reports, see www.tax.ny.gov/research/stats/statistics/sales tax/government/reports list.htm.6Office of the New York State Comptroller, “Aid and Incentives for Municipalities (AIM) and AIM-Related /stateaid/index.htm.7For a more detailed discussion of sales tax pre-emption by cities, see Office of the New York State Comptroller, Local GovernmentSales Taxes in New York State: 2015 Update, March 2015, p. 6, x2015.pdf.8This amount does not include the State’s share of the sales tax collected for 2019. However, local per capita collections include thetotal revenue collected in

sales tax collections. The 2019 decline of 5.7 percent in gas prices and 4.2 percent in sales taxes collected on motor fuel is less dramatic. (See Figure 4.) Finally, some of the strength in collections could be related to a State policy change aimed at increasing both State and local tax collections on sales made over the internet.

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