ALBANY — A majority of counties statewide saw an increase in sales tax collections in 2020, despite the slowdown or halt of many retail operations due to COVID-19.
But the counties that fared best were small and rural, possibly due to the widespread consumer shift to online purchases amid the pandemic, the Office of the State Comptroller said Tuesday.
The big counties of the Capital Region and the neighboring small counties of the Mohawk Valley region followed this pattern: Albany, Saratoga and Schenectady counties were down -6.8%, -1.3% and -0.2% in 2020 while Fulton, Montgomery and Schoharie counties were up 6.2%, 6.6% and 5.0%.
The two sets of counties are stacked roughly side-by-side along the same longitudes for more than 50 miles of north-south borders that residents cross many, many times each year for work, recreation and commerce.
The report noted a key difference between e-commerce and in-person purchases: Online sales are taxed where the purchased item is delivered, while in-store purchases are taxed where the store sits.
Rural counties have fewer shopping centers, so in normal times, some of their residents will drive to larger nearby counties for a shopping expedition, or pick things up on their daily commute to the larger counties. Amid the COVID lockdown, some rural residents stayed home by choice or through circumstances such as working remotely, and instead shopped locally or online. So their home county got the tax on the sale instead of the neighboring larger county.
With a few exceptions, the biggest jumps in sales tax revenue from 2019 to 2020 were seen in smaller rural counties, none more so than Delaware County, where the population is 45,000 and 2020 sales tax collections were 10.7% higher than 2019.
The report also noted that taxable sales from online vendors made up the highest percentage of taxable sales in Delaware, Schoharie, Washington and other rural counties in March through August 2020.
The three smallest Capital Region counties also saw increases in sales tax collections: Columbia 3.1%, Greene 6.2% and Washington 3.3%.
Sales tax money is an important source of revenue for local governments, and collections at the county level were stronger than some analysts expected at the onset of the pandemic in New York, the report said.
The major exception was New York City. State-imposed restrictions on retail activity were sharper and longer-lasting in the five counties of the city than in the rest of the state, due to the greater severity of the pandemic there in the spring of 2020.
Sales tax collections in 2020 were down 18.7% in New York City but down only 0.9% combined in the other 57 counties of the state.
As a whole, the 62 counties were down 10%, substantially more than the 6% decline recorded during the Great Recession a decade earlier, state Comptroller Thomas DiNapoli said in a news release Tuesday.
“This report shows how deeply the COVID-19 pandemic cut into municipal finances,” he said.
Across the Capital Region and nearby areas, the sales tax collected in 2020 and the change from 2019 was:
- Albany County $265.9M, -6.8%
- Fulton County $23.8M, 6.2%
- Gloversville $4.0M, 2.5%
- Johnstown $4.1M, -1.6%
- Montgomery County $35.1M, 6.6%
- Rensselaer County $96.3M, 0.4%
- Saratoga County $128M, -1.3%
- Saratoga Springs $11.1M, -17.1%
- Schenectady County $105M, -0.2%
- Schoharie County $17M, 5.0%
In the first quarter of 2020, before the pandemic hit, sales tax collections in many counties were trending higher than in the same quarter of 2019. As the pandemic set in, many people ran to the store in March to hoard supplies.
So the biggest impact came not in the first quarter but in the second quarter — April to June — when stores were ordered to close and many shoppers decided to stay home to reduce the risk of infection.
Restaurants and hotels, not surprisingly, took big hits on spending, along with clothing stores. Among those coming out ahead were beer/wine/liquor stores, information services and online retailers.
This last category — led by Amazon — saw its already growing revenue boosted even more sharply amid the pandemic.