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Major Boost For Local Governments Reliant On Sales Taxes

Local sales tax collections in May increased by 57.8% over the same month in 2020, the highest one month increase in recent history, state Comptroller Thomas P. DiNapoli said Wednesday.

Collections totaled $1.4 billion, up $530 million from May of last year.

“For the second straight month, local sales tax collections had a tremendous boost. Strong collections in May show the economy continues to improve as spending rebounds from the effects of the COVID-19 pandemic and the standstill it created in New York state in March 2020,” DiNapoli said. “Combined with direct federal assistance and restored state aid, the recovery of sales taxes will help New York’s local governments rebound from the effects of last year’s revenue shortfalls.”

The growth in monthly local sales taxes reflects the fact that collections in May 2020 were especially low during the worst part of the first wave of the pandemic, when they declined by 32.3%. Collections last month were relatively strong even compared to pre-pandemic numbers, rising 6.9% or $93 million, over May 2019.

In the last month of each calendar quarter, the state Department of Taxation and Finance reconciles quarterly distributions against what had been reported by sales tax vendors for the reporting quarter and adjusts payments to local jurisdications in those months upward or downward accordingly. In all other months, including May, the payments are based on estimates. The next reconciliation will be reported in mid-July and will provide more information on the regional picture of sales tax collections during the second quarter (April-June) of 2021.

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