Local sales tax collections across New York grew 6 percent in the first six months of 2018, according to a report released today by State Comptroller Thomas P. DiNapoli. Through June, local collections totaled $8.5 billion compared to $8 billion during the same period last year.
This is the highest half-year increase in the state since 2010 and the fourth consecutive period of strengthening collections. By comparison, growth during the first half of 2017 was 3.3 percent and during the first six months of 2016 it was 1.7 percent.
"Local sales tax growth is showing sustained improvement across much of the state," DiNapoli said. "The upcoming back-to-school and holiday shopping seasons may bolster what has already been a strong start to 2018. But as history has proven, sales tax can be an unpredictable revenue source for our local governments. I urge municipal officials to be cautious if planning for future growth."
DiNapoli's report revealed local sales tax collections in several regions far surpassed last year. Outside of New York City, the highest regional increases in the state were in the Southern Tier (5.8 percent), Mohawk Valley (5.8 percent), Mid-Hudson (5.8 percent), Capital District (5.6 percent) and Long Island (5.5 percent).
Examining sales tax on a county-specific basis, the report shows collections grew in 54 of the 57 counties outside of New York City. The strongest growth was in Hamilton County at 38.9 percent, followed by Sullivan (18 percent), Fulton (14.7 percent), and Tioga (12.5 percent) counties. The report notes that some large increases, such as in Hamilton County, can be due to technical adjustments made in collections.
New York City's sales tax collections grew by $250 million (6.9 percent) in the first half of 2018, its highest year-over-year increase since 2013. This increase accounts for nearly half (45 percent) of the nearly $484 million growth statewide.
Of the 17 cities in New York that impose their own general sales tax in addition to New York City, 14 had increases in collections. Gloversville had the strongest growth at 33.2 percent, which is likely due to a large one-time purchase made by a local business in the first quarter of 2018. The cities of Norwich (12.7 percent), Mount Vernon (10.6 percent) and Saratoga Springs (9.7 percent) also had strong growth. The cities of Oneida, Rome and Salamanca all saw their collections decrease from the same period last year, but this was mostly due to technical adjustments.
Across New York, economic factors that may have impacted collections include continued low unemployment, high consumer confidence and rising inflation. Another major influence affecting sales tax collections at the local level, especially in upstate regions, is the amount generated from the sale of motor fuel. The motor fuel sales tax component increased by 13.9 percent from the first half of 2017, marking the third consecutive half-year increase.
