Local Sales Tax Growth Annual Collections for 2018

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1 Local Sales Tax Growth Annual Collections for 2018 Robert Caracciolo, Research Analyst Division of Local Government and School Accountability 1 Topics Summary of local sales tax in New York Statewide and regional overview County and city sales tax collections Per capita collections Factors and influences Outlooks: Internet sales tax 2 Local Sales Tax in New York Sales tax is administered by the State Counties and cities can impose General (goods and services) Limited (hotel occupancy or consumer utilities) Local tax rates are between 3 and 4.75 percent Many counties share a portion of their collections with cities and towns within their borders 3 1

2 Statewide Annual Growth Annual Change in Local Sales Tax Collections 15% 9.5% 9.9% 10% 4.2% 5.2% 5.3% 5% 2.0% 0% -0.2% -5% -6.0% Recessions -10% -15% Source: New York State Department of Taxation and Finance, with calculations by the Office of the New York State Comptroller (OSC). Notes: Includes New York City (NYC). Adjusted for correction adding $238 million to collections for NYC in calendar year Local sales tax collections in New York State totaled $17.5 billion in 2018 Total collections grew by 5.3 percent, or $872 million, over the previous year Growth in collections has strengthened for three consecutive years, from 2016 to Statewide Quarterly Trends Collections were strongest in the second quarter with a year-over-year increase of 7.2 percent, more than double the growth rate during the same period in 2017 Growth in the fourth quarter (3.1 percent) slowed compared to the same period last year Quarterly Change in Local Sales Tax Collections 7.2% 3.5% 3.2% 6.0% 4.8% 3.1% 3.1% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Source: New York State Department of Taxation and Finance, with calculations by OSC. Notes: Includes New York City. 5 Regional Analysis Annual Change in Local Sales Tax Collections by Region 6.8% 5.8% 5.9% 5.0% 5.1% 4.9% 5.1% 4.6% 4.6% 4.8% 4.2% 4.5% 4.4% 3.7% 3.6% 2.8% 3.1% 3.3% 3.2% 2.9% 2.9% 1.7% 1.9% 1.2% 1.5% 0.9% 0.4% 0.4% -0.9% Capital Central District NY 2015 to to to 2018 Finger Lakes Mohawk Valley Upstate North Country Southern Tier Western NY Long Island Mid- Hudson Downstate New York City Source: New York State Department of Taxation and Finance, with calculations by OSC. Includes county and city sales taxes. Every region s annual growth rate increased in each of the last three years, except in the Finger Lakes Collections were robust in several upstate regions, especially in the Southern Tier (6.8 percent) Downstate collections were still strong: Long Island (4.5 percent) and Mid-Hudson (5.1 percent) 6 2

3 New York City Collected $7.8 billion in local sales tax, a 5.7 percent increase over the same period last year Highest increase in collections since 2013 Strongest growth of any downstate region (4 th highest in New York State) Accounted for 44.9 percent of the total local sales tax collections statewide 7 County Collections Collections grew in 55 of the 57 counties outside of New York City, with an average growth rate of 4.9 percent Strongest growth: Sullivan (16.4 percent) Tioga (16.1 percent) Weakest growth: Cayuga (-1.3 percent) Madison (-0.7 percent) 8 City Collections Change in City Sales Tax Collections, Calendar Year 2017 to 2018 Gloversville Norwich Salamanca Johnstown Saratoga Springs Glens Falls Auburn Mount Vernon Rome Yonkers Utica Olean New Rochelle Ithaca Oswego White Plains Oneida -5.2% 0.2% 2.5% 5.1% 5.0% 4.5% 7.0% 6.3% 6.1% 8.3% 7.7% 7.6% 7.4% 12.8% 17.8% Sources: New York State Department of Taxation and Finance, with calculations by OSC. Seventeen cities (outside of NYC) that impose their own general sales tax had an average growth rate of 5.6 percent in total collections Strongest growth: Gloversville (17.8 percent) Norwich (12.8 percent) Weakest growth: Oneida (-5.2 percent) White Plains (0.2 percent) 9 3

4 Collections Per Capita Local sales tax collections per capita were $876, an increase of $44 over the same period last year Highest per capita: Suffolk County ($1,055) New York City ($988) Lowest per capita: Washington County ($329) Orleans County ($409) 10 Factors and Influences State s average unemployment rate for 2018 was 4.2 percent, the lowest in over four decades Total wages increased by 5.7 percent in the first half of 2018 compared to the same period in the previous year Consumer confidence is high, spending is steady and inflation increased by 2.4 percent; the highest its been since Motor Fuel Collections Year-Over-Year Change in New York State Gas Prices and Motor Fuel Sales Tax Collections 40% 30% 20% 10% 0% -10% -26.5% -20% -30% -40% -29.0% 25.5% 26.8% -2.6% -3.6% Gas Prices (New York) Motor Fuel Sales Tax -25.4% -27.9% Sources: New York State Department of Taxation and Finance, Office of Tax Policy Analysis; United States Department of Energy, Energy Information Administration, with calculations by OSC. Note: Includes New York City. Yearly gas price changes are based on an average of monthly prices. 14.9% 10.5% Motor fuel sales tax component in 2018 increased by 14.9 percent over the same period last year Upstate regions are affected more by motor fuel collections Closely related to the growth and decline of gas prices, although changing patterns in cross-border sales have caused collections to surge 12 4

5 Supreme Court Decision The U.S. Supreme Court s ruling in South Dakota v. Wayfair reversed prior decisions States now have the authority to require online retailers to collect and remit sales taxes regardless of whether they have a physical presence in the state State Fiscal Year Executive Budget Contains a proposal to require marketplace providers to collect taxes on behalf of out-of-state retailers for which they facilitate sales transactions Links and Contacts Local Sales Tax Report for local-sales-tax-collections.pdf Questions or Inquiries localtraining@osc.state.ny.us 15 5

6 Thank You Division of Local Government and School Accountability 16 6