NYC Sales Tax Collections Slow Down as Broadway, Retail Struggle

New York City’s double-digit growth in sales tax collections is starting to abate, a sign of the city’s uneven economic recovery from the pandemic as restaurants bustle but seats remain unfilled on Broadway.

The city brought in $2.5 billion in sales tax receipts between April and June, up 3.7% from the same period last year, according to a report Wednesday from New York State Comptroller Thomas DiNapoli.

Before this most recent period, the city had recorded double-digit growth in sales tax collections for eight consecutive quarters since 2021, including 11.3% in the first three months of 2023. The double-digit increases began after an extended decline in 2020, when much of the city was shut down by the Covid-19 pandemic.

The data released Wednesday shows a “normalization of consumer spending in some respects,” DiNapoli wrote, pointing to restaurant activity that exceeded pre-pandemic levels and the continued return of tourists. But Broadway attendance and sales in service industries and for goods have yet to recover, while high office and retail vacancies put pressure on future sales growth.

The city’s haul had an impact on how much New York State drew in from local government sales tax collections, which totaled $5.7 billion in the second quarter for an increase of 3%. The state’s figure was also influenced by steep drops in gas prices that resulted in lower sales tax collections on motor fuels.

Some of the largest counties in the state also saw “tepid” collections, with Albany County reporting a decline of 6.1% in sales tax collections in the second quarter. Like New York City, the state experienced several consecutive quarters of double-digit growth coming out of the pandemic, including a 50% spike in between April and June 2021.

DiNapoli said in a statement that the slow growth indicated a return that’s “closer to pre-pandemic trends, after significant volatility during the pandemic period.”