Statewide Local Sales Tax Collections Higher Than Pre-Pandemic Levels
“Local sales tax collections continue to show year-over-year growth after experiencing significant drops during the early outbreak of the COVID-19 pandemic,” DiNapoli said. “This growth is an indicator that New York is experiencing an economic recovery, but local governments must closely watch changing economic conditions as supply chain shortages and workforce disruptions may impact growth.”
Statewide, every region saw solid growth in sales tax collections during the third quarter compared to the same period last year. Outside of New York City, the July-September period marked the fifth quarter in a row that county and city sales tax receipts met or exceeded 2019 pre-pandemic levels for the same period. Some of the regions with the strongest third quarter growth include Mid-Hudson (16.5%), Long Island (16.3%), and the Capital District (15.4%).
Sales tax receipts for New York City totaled $2.1 billion in the third quarter, an increase of nearly 28% compared to the same period in 2020. Overall, the City’s collections have been recovering at a slower pace than the rest of the state since April 2020, but its sales tax revenue has nearly reached pre-pandemic levels.
Statewide local sales tax collections in the third quarter of 2021 grew 8.6% ($409 million) over the pre-pandemic third quarter of 2019.
Year-to-date (January-September) collections in 2021 were nearly $14.4 billion, up 19.2%, or $2.3 billion, over the same period in 2020, and 6.1%, or $825 million, higher than the first three quarters of 2019.
Trends Spurring Growth
The strength in statewide local collections likely reflects changes seen nationally. The U.S. Census Bureau’s advance monthly retail trade report shows strong year-over-year growth for the third quarter, especially in sectors such as gas stations (38%), clothing stores (35%), and restaurants and bars (34%). Increased costs for goods also increase sales tax collections, and the price of consumer goods and services during this third quarter grew by 5.3% over the same period last year, as measured by the Consumer Price Index.
The improvement in New York City sales tax collections is tied to factors such as the re-opening or increased permitted occupancy of more indoor venues such as restaurants, theaters and sports arenas, as well as more offices requiring workers to return in person, at least part time.