Sales tax collections decline in New York by $1.2B in second quarter

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Local counties see declines between 2.1-4.8%

A new report says that while local sales tax collections from April to June fell by a cumulative 27%, collections have improved for some municipal governments on a year-to-date basis.

Only Delaware and Westchester counties bucked the trend of dropping sales tax collections in New York and have seen overall collections grow by double digits this year amid the coronavirus pandemic that shuttered all non-essential businesses for two months or more.

Statewide, sales tax collections declined about $1.2 billion in the second quarter, according to the state Comptroller’s Office.

“Collections in the second quarter of 2020 declined in every region over the same period in 2019, after relatively strong growth in most regions in the first quarter,” state Comptroller Thomas DiNapoli said in a statement.

“Many upstate counties saw actual year-over-year growth — sometimes strong growth —in June collections.”

Westchester saw its sales tax collections grow by 12.7% as a result of a 1% tax hike back in August and growth in collections by over 30% in the first quarter of the year.

Albany’s order for businesses deemed ‘non-essential’ to remain closed through most of the second quarter of 2020 to combat COVID-19 generally had mixed results on sales through New York.

Comparing January-June 2020 to the same period in 2019 locally, Steuben County has featured a drop of 4.8% in sales tax revenue.

Neighboring Allegany County has witnessed a decline of 3.6%, while Livingston County has seen a drop of 2.1%.

At the other end of the spectrum, sales tax collections in Delaware County, situated east of the city of Binghamton, increased by 12% over 2019.

DiNapoli attributed the overall decline in local sales tax revenue in the second quarter to the staggered reopening of the economy that led New York City sales tax collections to decline by 46% in the second quarter of the year.

The state comptroller said improvements in tax collection for online sales statewide boosted local sales tax collections by nearly 5% in the first quarter of 2020.

Gov. Andrew Cuomo’s order restricting non-essential businesses became effective March 22.

The executive orders known collectively as New York State on Pause expired on May 15 and began by allowing limited curbside retail, manufacturing, construction and wholesale trade to resume operations as part of the Phase 1 of a four-phase reopening.

All the 10 regions of the state reached Phase 4 by earlier this month.

“Every region outside of New York City saw an improvement in June, after steep drops in April and May,” DiNapoli said.

Financial reserves in danger

Rockland County Executive Ed Day said the county’s general fund surplus may be gone by the end of the year as a result of the coronavirus and executive orders that limited business activity.

Rockland County, along with Dutchess, Orange, Putnam, Sullivan, Ulster and Westchester counties entered the first phase of reopening on May 26.

Year-to-date sales tax collections are off by roughly $10 million in Rockland. Day said the county’s general fund consisted of $32.2 million of surplus in August.

Rockland and Dutchess counties saw declines in local sales tax collections approaching 10%, while sales tax collections in Albany County were down by 11%.

Dutchess County Executive Marc Molinaro said federal aid will be required to balance the loss in sales tax collections.

“Counties have been at the front line of battling the COVID-19 pandemic for months now and there is much work still ahead as we attempt to rebuild our economy and keep our communities safe and healthy,” he said.

By the numbers

DiNapoli’s office said sales and use taxes comprise roughly 34% and 19% of county and city revenues, respectively.

Local sales tax collections, the office said, have improved over 2019, from January until June, in the following governments:

DiNapoli reported sales tax collections for every region appear to have bottomed out in May, when every region reported year-over-year decline in local sales tax collections exceeding 30%.

The American Hotel & Lodging Association estimates New York has missed out on $970 million in local hotel occupancy tax.

DiNapoli reported that within the metropolitan area, local sales tax collections have declined in the cities of Mount Vernon, New Rochelle, White Plains and Yonkers by as much as 18% on a year-to-date basis.

Sales tax collection in June in White Plains and Yonkers declined by 53% and 22% respectively.

Year-to-date sales tax collections in the city of Saratoga Springs are down by 16%.

But the City of Oneida reported a 100% jump in sales tax collections in June.

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