Local government sales tax collections grew by 10.2% in the third quarter of 2022 compared to the same period last year, mostly driven by double digit growth in New York City. Total sales tax collections reached nearly $5.7 billion, an increase of $529 million, according to a report released today by New York State Comptroller Thomas P. DiNapoli. This is the second straight quarter that year-over-year growth did not keep pace 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 rose by double-digits for the sixth straight quarter. However, local governments are contending with higher costs from inflation, which was 8.3% nationally. Adjusting for inflation, year-over-year growth in the value of sales tax revenue for the third quarter was about 1.8%.
New York City’s third quarter collections this year grew by 16.8% to $2.4 billion. Several of the city’s major service industries, including restaurants, as well as arts, entertainment and recreation saw increased economic activity, with hotel occupancy rates rising above 90% in September, even though business travel remains well below pre-pandemic levels. Broadway attendance continues to grow, rising above 90% of pre-pandemic levels for the first time in September.
Overall collections for the counties and cities in the rest of the state grew by 5.3% to $2.9 billion. However, when adjusted for inflation, these collections are worth slightly less than the $2.8 billion collected in the same quarter last year.
In total, 52 out of 57 counties experienced growth in collections. Lewis County had the largest increase (30.7%), followed by Sullivan (26.6%) and Schoharie (22.3%).
DiNapoli’s report notes that the third quarter collections of several counties outside of New York City were less than what they would have been had they not opted to implement a local component of the state’s “gas tax holiday.” However, this only slightly offset overall local sales tax growth, in part because taxes collected from the retail sale of gasoline typically only comprise about 5.2% of total collections for counties outside of New York City.
Four of the five counties with year-over-year declines in collections for the quarter participated in the gas tax holiday, but only two of these counties (Monroe and Wayne) experienced a steep enough drop in motor fuel sales tax revenues to cause the decrease in their overall collections.
Of the 18 cities that impose their own sales tax (not including New York City), Glens Falls had the strongest year-over-year increase at 30.8%, followed by Saratoga Springs (24.3%) and Johnstown (12.1%). Collections fell in Norwich (-11.1%) and Rome (-1.3%).
Report
Third Quarter Sales Taxes
Regional/County-by-County Data
Related Resources
Gas Tax Holiday Data
Inflation in the New York City Metropolitan Area
General Sales Tax Background
