Local governments in New York once again saw their sales tax revenue increase by double-digit percentages during the last several months, but the reasons why and the impact are essentially a mixed bag. 

Comptroller Tom DiNapoli's office on Thursday announced sales tax collections grew by 10.2% compared to the same period a year ago. This was driven in large part by major growth in New York City. 

All told, sales tax collections hit $5.7 billion during the third quarter, an increase of $529 million. 

The good news: The sales tax growth in New York City is attributed in part to people going out and doing pre-pandemic activities like using hotels, seeing a show on Broadway or dining out at a restaurant. 

The bad news: The revenue increases are not keeping pace with inflation overall for counties and cities outside of New York City. 

“New York City’s sales tax growth in the third quarter, after relatively weaker collections in 2020 and 2021, bolstered overall growth for the state,” DiNapoli said. “Most local governments are experiencing sales tax revenue growth, even as they struggle with higher costs from inflation just like consumers and businesses. We will continue to monitor how inflation is affecting local governments and the state’s economy.”

DiNapoli's office reported year-over-year growth in the value of sales tax revenue was only 1.8%. 

New York City, which has struggled to regain jobs lost during the initial closure of businesses and public gathering spaces in 2020, has seen Broadway attendance grow above 90% of pre-pandemic levels in September, while occupancy rates for hotels are also reaching above 90% that same month. 

It's a potential sign the hard-hit tourism and hospitality sector is slowly recovering from the effects of the pandemic. 

At the same time, some counties are seeing weaker sales tax growth after putting their own gas tax holiday in place after New York state suspended about 17 cents of fuel taxes in June. At the state level, the gas tax holiday expires at the end of the year.