Erie County Comptroller's Office: Sales and Use Tax Distribution

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Sales and Use Tax Distribution

Background

A general sales and compensating use tax of 8.75 percent is levied on all taxable retail sales in Erie County. Of the total 8.75 percent tax collected by New York State, 4 percent is retained as State revenue and 4.75 percent is returned to the County. Of Erie County's 4.75 percent, 1.75 percent is retained by the County for County purposes, with the exception of $12.5 million of the 1.00 percent sales tax which is shared with local municipalities pursuant to State legislation. The remaining 3 percent is distributed among the County, local municipalities and school districts in the County pursuant to the sales tax sharing agreement.

One-Percent Sales Tax

From 1985 and through 2006, Erie County annually received authorization from the New York State Legislature and Governor to assess an additional one percent sales tax to the base county sales tax of three percent. During that time all of the proceeds of the additional one percent sales tax were retained by the county.

In 2006, the County was required by the New York State Legislature to adopt enabling legislation that shared $12.5 million in revenue from the one percent sales tax with the cities, towns and villages in Erie County in 2007. That legislation was renewed by the State Legislature at the request of the County Legislature and County Executive in 2008 and the sales tax sharing of $12.5 million continues through 2010. Absent future reauthorization, the one percent sales tax expires on November 30, 2010.

.75 Percent Sales Tax

In June 2005, pursuant to Home Rule Requests of the Erie County Legislature and the approval of enabling legislation by the New York State Legislature and Governor, an additional 0.25 percent sales tax was instituted for County purposes. In November 2005, the Erie County Legislature approved a further additional 0.5 percent sales tax for County purposes. That 0.5 percent sales tax started on January 15, 2006. The 0.75 percent sales tax was originally to expire on November 30, 2007. Pursuant to a County request and State approval, the 0.75 percent sales tax has been extended until November 30, 2009.

Distribution

The County retains 100 percent of 1.75 percent of the tax rate with the exception of the special sharing of $12.5 million. The remaining 3 percent tax rate is distributed as follows:

The County retains 35.3055 percent.
10.0087 percent is allocated to the Cities of Buffalo, Lackawanna and Tonawanda on the basis of population.
25.6858 percent is divided among the Cities of Buffalo, Lackawanna, Tonawanda and the towns on the basis of population. The amount belonging to the towns is divided on an alternating basis of full value and population. Full value is used to distribute the receipts for the quarters beginning January 1 and July 1, and population is used for the quarters beginning October 1 and April 1. Villages receive a portion of the town amount based on the ratios that the full valuation of real property in such village or portion thereof within the town and the full valuation of real property in the portion of the town outside of such village or villages, respectively bear to the aggregate full valuation of the entire town.
29 percent is divided among all the school districts with territory in the County on the basis of the average daily attendance of public school pupils who are residents of the County.
Population figures are obtained from the Federal Decennial Census.
Property full valuation figures are obtained annually from the Erie County Director of Real Property. These are the same values used to assess the annual Erie County tax levy.
Average daily attendance figures are obtained annually from each respective school district.

If you have any other questions, please contact us.

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