Yates County Sees Highest Year-Over-Year Growth in Sales Tax Collections in ’22

Local government sales tax collections in New York state totaled $22.1 billion in calendar year 2022, up 12.7%, or $2.5 billion, from 2021 due to strong sales statewide, especially in New York City, according to a report released by State Comptroller Thomas DiNapoli.

After strong quarterly year-over-year increases for most of 2021 and early 2022, sales tax growth outside of New York City slowed to 2.6% in the April to June period, well below the rate of inflation. While both third quarter (5.3%) and fourth quarter (4.5%) growth were a bit stronger, year-over-year collections may be returning to more typical pre-pandemic growth levels.

Every county saw some year-over-year growth in sales tax collections in 2022 with 41 out of 57 counties (72%) recording increases ranging from 4% to 10%. Yates County had the strongest growth at 21.1%, followed by the counties of Lewis (14.9%), Montgomery (12.4%) and Schoharie (11.8%). Dutchess County grew the least at 1.6%, followed by the counties of Jefferson, Chenango and Orleans, each at 2.4%.

“The pandemic created significant sales tax volatility over the past few years, first with a major decline, then with a strong rebound,” DiNapoli said. “Sales tax growth has remained strong for a sustained stretch as consumers resumed spending relatively quickly after pandemic shutdowns ended. Additionally, the state implemented policies just prior to the pandemic that ensured more online sales were being fully taxed.”

Local sales tax growth in 2022’s fourth quarter (October to December) increased by 8.8% over the same quarter of 2021, which was similar to the year-over-year rates seen in the prior two quarters. This was after sales taxes in the first quarter grew by 21.1%, compared to fairly weak collections from the same quarter in 2021, when COVID infection rates were peaking, public vaccinations had not been fully rolled out and travel restrictions were still in place.

Inflation, even with the impact of the gas tax holiday, was one of the main drivers for sales tax growth in 2022, reaching a higher rate than in any recent year after a decade of lower-than-average inflation growth. Even as consumer demand for goods cooled somewhat during the year, the price of those goods continued to rise, sustaining high year-over-year growth in collections. As the pace of inflation moderated in the third quarter (July to September) and fourth quarter, however, so did collections growth.

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