LI holiday retail tax off 1.9% from '11

Holiday shoppers carry their last-minute purchases at the

Holiday shoppers carry their last-minute purchases at the Americana in Manhasset. (Dec. 23, 2012) (Credit: Newsday/Audrey C. Tiernan)

Retail sales on Long Island appear to have declined in December -- during the crucial holiday shopping season -- compared with a year earlier, according to a new report.

The state Department of Taxation and Finance said Monday that sales tax collections fell 1.9 percent in the region this past month compared with December 2011. The collections serve as a barometer of consumer spending.

In Nassau County, sales tax revenue dropped 2.6 percent, while in Suffolk County it was off by 1.2 percent.

Economists and retailers blamed the year-over-year decreases on superstorm Sandy, which damaged homes and businesses Oct. 29 and left many people with less money.

The experts also said consumers were distracted by the Connecticut school shooting and "fiscal cliff" negotiations in Washington.

December sales-tax collections "tell us that the Long Island economy is getting weak," said Irwin Kellner, chief economist for the MarketWatch information service and a former Hofstra University professor.

"The aftereffects of hurricane Sandy . . . the horrible massacre in Newtown, Conn. -- I think a lot of people have been put in a dour mood," he said. "People were just not in a spending mood over the holiday shopping season."

December is a crucial month for some retailers, determining whether their year is profitable. Consumer spending accounts for about 70 percent of economic activity.

On the Island, December sales-tax collections have gained, year over year, in both counties since 2009. In Nassau, a year-over-year drop was last seen in 2008, and in Suffolk, in 2009, according to the state tax department.

Both counties are heavily dependent on the sales tax to help fund services. For 2012, collections grew 3.8 percent in Nassau over 2011, and were up 3 percent in Suffolk.

December retail sales for the country are expected to released Tuesday. The International Council of Shopping Centers has predicted a 4.5 percent jump for chain stores nationally.

"Despite the worry of the slow start to the holiday shopping season, sales rebounded in December as consumers took advantage of more shopping days this year compared to last," said Michael P. Niemira, the council's chief economist. "That last-minute shopping, coupled with post-Christmas bargain hunting and early gift-card redemption, helped propel sales at the end of the month."

SHOPPING LESS
Sales tax collections for December 2012 compared with December 2011:

- 2.6%
Nassau

- 1.2%
Suffolk

- 1.9%
Long Island

Source: NYS Department of Taxation and Finance

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