Centsless Math

You read the paper, you vote, and you do your best to recycle, beyond that a lot of us go about trusting that the right decisions are being made for the big picture in our region. Take sales tax, for example, do you know what a hike might mean for you? For area business owners? Mom and Pop?

Take a look at the study we have posted below. You might be surprised.

Residential Impact:

According to the US Bureau of Labor Statistics, the average American consumer unit spends $38,000 per year on everything from housing, food via groceries and restaurants, gas, home furnishings, home and car repairs, to entertainment and holiday gifts, etc. In many instances, these annual expenditures are subject to a sales tax. Using these figures, the average consumer unit living in Warren County is expected to spend $12,120 on sales tax eligible items annually and will pay $121.20 annually in new sales taxes if the County increases the sales tax just 1%.

1-Type of Expense
2 - Average Annual Expense Subject to Sales Tax
3- Impact of 1% increase in Warren County sales tax

1 - Entertainment 2 - $1,900.00 3 - $19.00
1 - Food/Groceries 2 - $2,320.00 3 - $23.20
1 - Gas 2 - $1,275.00 3 - $12.75
1 - Home Items 2 - $4,000.00 3 - $40.00
1 - Repairs 2 - $1,125.00 3 - $11.25
1 - Holiday Shopping 2 - $1,500.00 3 - $15.00
Totals: 2 - $12,120.00 3 - $121.20

Warren County increased its tax levy by 12.5% from 2006 to 2007. When this increase was passed, it was noted that the actual dollar impact of the increase was marginal with ranges as documented below between $22.40 for a property in Glens Falls valued at $100,000 to $141.60 for a property in Bolton valued at $200,000.

Town/City 2006 County Tax Rate
2007 County Tax Rate
Amount of Increase
Tax Increase on property valued at $100,000
Tax Increase on property valued at $200,000

Glens Falls $3.82 $4.04 $0.22 $ 22.40 $44.80
Queensbury $2.93 $3.33 $0.40 $40.40 $80.80
Lake George T. $2.68 $3.46 $0.69 $69.30 $138.60
Lake George V. $4.29 $5.00 $0.71 $70.50 $141.00
Bolton $3.16 $3.87 $0.71 $70.80 $141.60

These charts demonstrate that property owners in many Warren County communities will actually pay more in taxes annually if the sales tax is increased one percent than if the property tax levy is increased as it was in 2007.

In addition, the one percent increase in sales taxes will result in higher taxes to be paid by those living in Warren County who rent their own apartments, homes or condominiums and don’t own their own property. According to the US Census, there are 25,726 households in Warren County with a 69% homeownership rate. This means that 30% of the County’s population or 7,700 households that will pay higher taxes if the sales tax is increased without experiencing a corresponding reduction in property taxes because they don’t pay them.

Small Business Impact:

These results can be expected to have a similar impact on local small businesses. In particular, many small businesses and startups lease space rather than taking on the expense of owning their own property. These companies do, however, incur thousands of dollars per year in telephone, cell phone, gas, office furniture, computers, software, paper supplies, and more that result in sales taxes paid to the County.

For instance, a typical small business is likely to incur a minimum of $20,000 in these business expenses that will be subject to the sales tax and perhaps as much as $60,000 for those who are more sophisticated and may have hired a couple of employees. A one-percent increase in the sales tax will result in these small businesses paying $200 to $600 more in taxes per year even though they will not benefit from any offsetting proposed reduction in property taxes because they do not own property.

An increase in the sales tax also requires small businesses to reconfigure their point of sale systems resulting in additional employee time and expense. In addition, those small family owned businesses who sell higher priced items are reasonably concerned that an increase in the sales tax in Warren County will motivate consumers of these items to save money by shopping in other adjoining counties that have a lower sales tax.

The ARCC is dedicated to helping local companies succeed, grow and thrive, it is for that reason we oppose movements to increase the sales tax in Warren County.
If you'd like a copy of the report please email Amanda at the ARCC.