Yates harder hit by sales tax diversion for state health fund

John Christensen
The Chronicle-Express

PENN YAN – New York state made sales tax payments to all 57 counties and to New York City Feb. 4. However, $250 million was diverted from the payments to benefit the stressed health facilities fund. The entire amount for the fund for the fiscal year was taken out of this one payment. The New York State Association of Counties reports that future diversions to the fund will be taken quarterly: in May, August, and November 2021, and in January 2022.

The sales tax payment last week dropped from $1.2 billion to $873 million, compared to the same week last year. According to NYSAC, that is down by $310 million, 26% when the losses caused by the pandemic are combined with the state's diversion of local sales tax to fund state initiatives. In most months, the state makes two sales tax payments to localities to reimburse them for the local sales tax that is collected and administered by the state.

According to NYSAC, before the sales tax diversion, total sales tax payments for this date compared to last year were down $60 million, or 5%. Payments covered sales tax activity for the Jan. 1-22 period and December.

The 57 counties were down $24 million, - 4.1% overall, while NYC was down $35.6 million, -5.9%. The taxable sales trend continues to improve as the pandemic approaches the 1-year mark. But Yates County took a harder hit than others.

"New York state diverted $80,361 from our sales tax receipt," said Yates County Treasurer/County Administrator Nonie Flynn. "We received $629,173, or 7.87% less than the same payment one year ago. Without the New York State diversion, we would have been up 3.9% compared to last year."

Yates County Treasurer/County Administrator Nonie Flynn

In its update, NYSAC stated, “It is important to highlight as we have been during the pandemic that the monthly distributions of sales tax are subject to significant adjustment upon each quarterly filing when vendors submit actual data to sales by store location. The next quarterly adjustment will occur in April and redistribute funds based on sales tax activity that occurred in December, January and February.”

There will be another sales tax payment to counties Feb. 12, which will cover sales tax activity for December.