The county's sales tax rate will drop .25 percent today.
Despite discussion earlier this year about keeping the rate at 7.75 percent or possibly increasing the rate, county businesses will begin charging 7.5 percent today.
To address the 2011 budget deficit, county officials asked the state to consider increasing the county's sales tax rate. When that was met with resistance, the county then asked for a continuation of the 7.75 percent rate. The increase, had it been passed, would have taken the rate to 8.25 percent. However, as neither proposal passed Albany, the rate will drop today, as scheduled, to 7.5 percent today.
Going to 8.25 percent would have been a return of sorts for the county, taking the rate back to its 2006 levels. For each quarter of a percent on the sales tax, the county sees $3.25 million in revenue.
Fluctuation in the county's sales tax rate will likely continue in 2011, as county officials have expressed interest in again asking Albany for an increase in the rate.
One of the reasons why the request for an increase to 8.25 percent and then for a continuation of the 7.75 rate both failed to pass Albany this year was because the requests came off cycle. During discussions of changing the sales tax rate this year, both Assemblyman Bill Parment, D-North Harmony, and Senator Cathy Young, R-Olean, explained that Albany amends counties' sales tax rates on an every-other-year basis - meaning the rate will be up for change again in 2011.
With 2012 looking to be as difficult a budget year as 2011 was, County Executive Greg Edwards has proposed increasing the rate back to 8.25 percent next year.
In 2005, the county saw $35.9 million in revenue from the sales tax. In 2006, the county saw $38.7 million in revenue from the sales tax. The county puts its sales tax revenue at $30.5 million for 2010 and $26.2 million for 2011. Going to 8.25 percent will increase the county's revenue by $9,750,000, according to Edwards.
New York state is again taxing clothing purchases under $110.
Such purchases had until recently been exempt from state and county sales taxes. The exemption, however, was halted on Oct. 1, when the state began collecting its 4 percent sales tax on all clothing purchases.
Sales tax rates throughout the state are composed of two parts, the state's percentage and the counties' local portions. New York state collects a 4 percent sales tax on top of which counties set their own sales tax rates.
In Chautauqua County, the sales tax rate is now made up of the state's 4 percent tax and the county's 3.5 percent tax. However, unlike the state, the county is not collecting its sales tax on clothing purchases under $110.
"I did not move to put our local portion of the sales tax back on clothing like they did in Albany," Edwards wrote in his most recent Monday Morning Memo, an e-mail newsletter issued each week by the county executive.
Though currently taxing all such purchases, the state does plan to stagger its sales tax exemption back in - first by reinstating a partial exemption next year.
So, for the six-month period which began Oct. 1 and continues through March 31, 2011, the state has been and will continue to charge its 4 percent sales tax on all clothing and footwear purchases. Beginning April 1, though, the state will start exempting the sales tax on purchases which total less than $55. That partial exemption will run through March 31, 2012. The full exemption on clothing and footwear purchases under $110 will be reinstated on April 1, 2012.
"Chautauqua County did not eliminate the exemption on clothing under $110, which means any clothing or footwear purchased in Chautauqua County continues to be exempt from county sales tax," Edwards explained in his Monday Morning Memo.
That local exemption, however, will likely change when the state reinstates its partial exemption beginning April 1. In his Monday Morning Memo, Edwards explained that he will be seeking to mirror the state's exemption beginning April 1, which means the county will, like the state, not tax clothing and footwear purchases under $55, but will again tax anything over $55 at the full 7.5 percent sales tax rate - or even 8.25 percent if that's what the county's sales tax is at the time.