Local government sales tax collections grew by 10.2% in the third quarter of 2022, compared to the same period last year The uptick is mostly driven by double-digit growth in New York City according to a report released by State Comptroller Thomas DiNapoli. Total sales tax collections reached about $5.7 billion, causing an increase of $529 million. Additionally, this is the second straight quarter that year-over-year growth did not keep up with inflation for counties and cities outside of New York City.
“New York City’s sales tax growth in the third quarter, after relatively weaker collections in 2020 and 2021, bolstered overall growth for the state,” DiNapoli said. “Most local governments are experiencing sales tax revenue growth, even as they struggle with higher costs from inflation just like consumers and businesses. We will continue to monitor how inflation is affecting local governments and the state’s economy.”
Local sales tax collections from July to September climbed to double-digits for the sixth straight quarter. However, local governments are faced with higher costs from inflation, which was 8.3% nationally. Additionally, year-over-year growth in the value of sales tax revenue for the third quarter reached about 1.8%.
New York City’s third-quarter collections this year surged by 16.8% to $2.4 billion. Generally, collections for the counties and cities in the rest of the state grew by 5.3% to $2.9 billion. After being adjusted for inflation, these collections are worth less than the $2.8 billion collected in the same quarter last year.
DiNapoli’s report mentions that the third-quarter collections of several counties outside of New York City were lower than what it originally would have been if a local component of the state’s “gas tax holiday” were not implemented. However, the retail sale of gasoline typically only comprises about 5.2% of the total collections for counties outside of New York City.
Of the 18 cities that did impose their own sales tax (excluding New York City), Glens Falls had the best year-over-year increase at 30.8%, followed by Saratoga Springs at 24.3%. In Norwich, collections went down by 11.1% and Rome’s collections fell by 1.3%.
