OGDENSBURG – After a months-long standoff, St. Lawrence City and County officials agreed on Tuesday to extend the current sales tax distribution agreement for three months as the city prepares to collect its own sales tax from next year.
The city and county also agreed to an updated sharing agreement for the last 1% of sales tax revenue. This new deal will begin once the city officially pre-empties from March 1, 2022.
Preemption – the process by which a city collects its own sales tax – will allow the city to collect 1.5% of the 3% local sales tax that is normally collected by the county from the city. But the last 1% of the sales tax was a point of contention as the city had autonomy legislation pending before the state legislature which, if passed, would have granted the city power. to collect up to 1% additional sales tax within city limits rather than the county that collects the tax.
The legislation was passed by the Senate before the end of the session, but not by the Assembly.
New York is a self-governing state. In some US states, known as self-governing states, the state constitution grants municipalities or counties the ability to pass laws to govern themselves “as they see fit.”
The updated sharing agreement was made public in a letter that County Administrator Ruth A. Doyle sent to City Manager Stephen P. Jellie on Tuesday afternoon.
The current sales tax deal is set to expire on November 30. The extension of the current agreement will begin on December 1 and expire on February 28, 2022, according to the letter.
“The county would like to see the city of Ogdensburg achieve financial health and prosper in the future,” Ms. Doyle wrote. “We are fully aware of how difficult these times and these decisions can be for a municipality. “
Ms Doyle wrote that the letter was in response to an email Mr Jellie sent her on June 23 asking for the county’s help as the city moves on to collecting its own sales tax.
Recent discussions with the state’s tax and finance department have determined that the city cannot begin collecting its own sales tax until March 1, 2022, Mr Jellie wrote to Ms Doyle on June 23. Indeed, a municipality is required to give six months. notice of its intention to collect its own sales tax.
The city council, at its meeting on June 14, unanimously passed a resolution declaring its intention to pre-empt from December 1, but that date falls short of the six-month rule.
“NYS Tax and Finance had told us three times that 90 days’ notice to the Commissioner was the only time notification requirement,” Mr. Jellie wrote to Ms. Doyle, “but that turned out to be just one of the requirements. “
The minimum sales tax rate in New York is 7%, of which 4% goes to the state and the remaining 3% to local government. Counties can collect additional tax revenue, but not without the authorization of the legislature. In August 2013, the County of St. Lawrence passed a Self-Government Act to collect an additional 1% in the county. Since then, the sales tax rate in the county has been 8%, including within city limits.
The current sales tax formula requires Ogdensburg to collect 6.44% of the first 3% of the sales tax the County of St. Lawrence collects, as well as 6.44% of the last 1% the county accumulates. County takes 83.56% of the bottom 1%, while towns and villages get the final 10%. It’s the deal the county did not extend earlier this year as the county’s council of lawmakers tried to get Ogdensburg to collect the same amount of sales tax as towns and villages, which is distributed according to the value of the property and the population.
But Ogdensburg is the only town in the county and is therefore the only municipality empowered by the state to negotiate the sales tax allocation formula with the county.
The updated sharing agreement for the last 1% of sales tax revenue, effective March 1, 2022, will combine the 6.44% allocated to Ogdensburg with the 10% that goes to towns and villages. That total, 16.44%, will be shared with Ogdensburg, towns and cities in the county on a 50-50 formula of assessed land value and population, according to Ms. Doyle.
But if the city gets its national legislation to collect up to an additional 1% of sales tax within city limits, the distribution of the last 1% from county to city will cease.
Before the end of the legislative session on June 10, two bills were pending in committee: an Assembly bill in the Ways and Means Committee and a Senate version of the same bill in the Finance Committee. The Senate version of the bill was passed after a strong push from Senator Patricia A. Ritchie, R-Heuvelton, but no action was taken on the Assembly’s version of the bill. It remained in the Ways and Means Committee and was not put to a vote before the scheduled end of the legislative session.
When a bill does not pass a committee, it usually means that the bill is dead for the year – unless the legislature meets again. Legislative leaders can recall legislators in session at any time, but they are not required to do so. Lawmakers have suggested they will return before the end of the year to pass pending legislation, but this remains unknown.
The Legislative Assembly is expected to meet again in January 2022.
“The city looks forward to gaining support from the county as we determine the most effective way to advance the local self-government legislation needed for the city to collect up to an additional 1% of sales tax in the city. its limits, ”Jellie wrote to Ms. Doyle on Wednesday afternoon. “Since the county’s first request for similar legislation several years ago, the city has consistently supported the county, including the most recent renewal.
“I look forward to strengthening the partnership between the county and the city,” he added.