State’s in­ter­net sales tax means coun­ties reap more ben­e­fits when shop­pers buy lo­cal

The Buffalo News - - CONTINUED FROM THE COVER - By Thomas J. Pro­haska

No one knows for sure how much county gov­ern­ments will re­ceive from New York State’s new sales tax on in­ter­net pur­chases, but one thing is clear: Coun­ties won’t re­ceive as much as they do when con­sumers buy at a brick-and-mor­tar store.

That’s be­cause Al­bany will keep $60 mil­lion of the pro­jected in­ter­net tax rev­enue to pay some of its di­rect aid to towns and vil­lages.

So shop­ping lo­cally now makes a dif­fer­ence for county gov­ern­ment as well as for mer­chants, be­cause coun­ties re­ceive their full share of sales tax only on lo­cal pur­chases.

“We’d much rather peo­ple buy from a lo­cal en­tity than on­line,” Erie County Ex­ec­u­tive Mark C. Polon­carz said Mon­day. “Now, they’re go­ing to have to pay the same sales tax any­way, but you’re much bet­ter off sup­port­ing a lo­cal busi­ness.”

The new state bud­get as­sumes that coun­ties out­side New York City will col­lec­tively net $160 mil­lion from the new in­ter­net tax.

The pro­jec­tion would be $220 mil­lion if not for the lo­cal aid re­place­ment pro­vi­sion, said Mark LaVigne, a spokesman for the New York State As­so­ci­a­tion of Coun­ties.

At first, Gov. An­drew M. Cuomo pro­posed that coun­ties should make up the $60 mil­lion cut in state aid to lo­cal­i­ties with di­rect pay­ments of county money to their towns and vil­lages, but county ex­ec­u­tives around the state protested.

Coun­ties al­ready share their sales tax rev­enue with cities, towns, vil­lages and school dis­tricts. For ex­am­ple, Erie County gives 46 per­cent of its sales tax re­ceipts to lo­cal­i­ties and schools.

“The irony is, towns are fund­ing their state aid with their own sales tax rev­enue,” Ni­a­gara County Man­ager Richard E. Upde­grove said.

“We re­ally don’t know how much we’re go­ing to gen­er­ate in new tax be­cause it’s from en­ti­ties we’ve never re­ceived tax from be­fore,” Polon­carz said.

If the rev­enue turns out to be less than the state aid owed to lo­cal­i­ties, coun­ties would have to make up the dif­fer­ence, Polon­carz said.

“Are we happy with the fi­nal re­sults? It’s not ideal. It’s cer­tainly not what we ad­vo­cated for,” said Charles H. Nes­bitt Jr., Or­leans County chief ad­min­is­tra­tive of­fi­cer and pres­i­dent of the As­so­ci­a­tion of Coun­ties.

“Since our en­tire county prop­erty tax levy is used to pay for state pro­grams, there is a reliance on sales tax rev­enues to fund county op­er­a­tions, such as po­lice pro­tec­tion and road con­struc­tion and main­te­nance,” Upde­grove said. “The state use of lo­cal sales tax rev­enue to di­rectly fund state obli­ga­tions is un­prece­dented.”

“That’s not a great prece­dent ... ob­vi­ously, it’s a slip­pery slope,” Nes­bitt said.

“Whether it’s fair or not, it’s un­for­tu­nately what we have to deal with,” Polon­carz said. “I’ve ad­vo­cated against it. I’ve talked to the gov­er­nor’s staff and oth­ers. It’s done. I can’t fix it.”

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