Local Sales Tax Collections Grows by 3.3 Percent

Local sales tax collections in New York State grew by $450 million in 2012, an increase of only 3.3 percent from 2011, according to a report issued Thursday by State Comptroller Thomas DiNapoli. New York City had a slightly better growth rate of 3.5 percent.

DiNapoli’s report found sales tax collections have fluctuated significantly since the recession in 2008 and 2009. For example, in 2009, local governments collected 6 percent less in taxes than in the prior year.

In 2010, sales tax collections rebounded and increased 10 percent. In 2011, however, the growth rate was halved to 5 percent.

In recent years, an increasing number of counties, cities and towns have been relying more heavily on sales tax to finance local operations.

Because sales tax revenues vary and are often lower during tough economic times, this dependency can strain local budgets if sales tax revenues come in lower than projected.