Sales tax revenues continue to climb though rate slows

Sales tax revenue increased last year but at a slower rate than in 2010, state Comptroller Thomas DiNapoli reported Feb. 21.

Statewide, local sales tax collections grew by 5 percent to approximately $13.68 billion in 2011 after expanding by 9.9 percent the previous year.

The contrast was more pronounced in Westchester, where county sales tax collections grew by 2 percent to nearly $451 million after increasing by 6.4 percent in 2010.

Local sales tax collections for the mid-Hudson region grew 4 percent in 2011.

The report noted that much of the growth experienced from 2009 to 2010 on the state level was the result of a sales tax rate increase in New York City, without which collections would have increased roughly 7 percent.

County sales tax collections, excluding New York City, have increased in eight consecutive quarters.

DiNapoli said that while any increase in tax collections is a positive sign, “continued caution is warranted.”

He said that sales tax revenue would continue to impact municipalities and school districts as they adjust to the property tax cap.

“The degree to which local governments depend on sales taxes varies, but it is an important source of revenue for many. As localities adjust to the property tax cap, more may turn to sales tax revenues to fill in budget gaps,” DiNapoli said in a statement.