Sales tax collections by New York municipalities rose by 10.5% during the first three quarters of 2010, Comptroller Thomas DiNapoli reported last week. During the same period last year, sales tax collections declined 9%.

About 3.5% of the growth in sales taxes was due to sales tax rate increases and the expansion of taxes in New York City and Nassau County to items that had been exempt.

“An increase in sales tax collections is a good sign for the economy,” DiNapoli said in a release.

“New Yorkers are getting out and spending money. But that growth has been uneven around the state, and even though there are some positive signs, recent economic news points to slower growth.”

In New York City, sales tax collections increased by 20.6%. About half of that increase was due to the city raising the sales tax rate to 4.5% from 4% and removing an exemption on certain clothing and footwear.

Outside of New York City, the region with the highest growth in sales tax collections was Long Island, where it increased by 5.6%, in part due to a short-lived residential energy tax in Nassau County that was repealed in June after six months.

In counties outside of New York City, sales taxes grew by 3.7%, though seventeen counties saw declines.

DiNapoli warned that population declines in sixteen cities could cause reductions in tax revenue sharing with counties.

Several counties share sales tax revenues with local governments based on U.S. Census data, which will likely change when the 2010 census is completed.

Buffalo, Niagara Falls, and Albany are at risk of losing $1.1 million, $513,723, and $485,924 respectively due to population declines.

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