Sales tax collections by local governments in New York increased 10.2% in the third quarter compared to the same period last year, according to State Comptroller Thomas DiNapoli.
Total sales tax collections rose by $525 million to nearly $5.7 billion, mostly driven by double-digit growth in 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."
DiNapoli won a fourth full term as comptroller in Tuesday's election. The comptroller is the state's fiscal officer, with duties that include issuing and managing state general obligation bonds.
From July to September, local sales tax collections rose for the sixth straight quarter.
Local governments are seeing impacts from inflation, which was 8.3% nationally. Adjusting for inflation, year-over-year growth in the value of sales tax revenue was about 1.8% in the third quarter, the report said.
"We will continue to monitor how inflation is affecting local governments and the state's economy," DiNapoli said.
New York City's sales tax collections rose 16.8% to $2.4 billion in the third quarter.
Several of the city's major service industries, including restaurants, arts and entertainment, and recreation, reported increased economic activity, with hotel occupancy rates rising above 90% in September. Broadway attendance also rose above 90% of pre-pandemic levels for the first time in September.
Still, business travel remained well below pre-pandemic levels.
Overall collections for the counties and cities in the rest of the state grew by 5.3% to $2.9 billion. It was the second straight quarter that year-over-year growth did not keep pace with inflation for counties and cities outside of New York City.
In total, 52 out of 57 counties saw growth in sales tax collections. Lewis County had the largest increase at 30.7%, followed by Sullivan at 26.6% and Schoharie at 22.3%.
DiNapoli's report noted collections of several counties outside of the 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 the city.
Four of the five counties with year-over-year declines in collections for the quarter participated in the gas tax holiday, but only Monroe and Wayne saw a steep enough drop in motor fuel sales tax revenues to cause a decrease in their overall collections.
Not including New York City, of the 18 cities that impose their own sales tax, Glens Falls had the strongest year-over-year increase at 30.8%, followed by Saratoga Springs at 24.3% and Johnstown at 12.1%. Collections fell 11.1% in Norwich and 1.3% in Rome.
