Ulster County achieved a remarkable sales tax revenue of $180,898,282 in 2025, surpassing the previous record of $175.3 million set in 2024. This significant increase was highlighted in a report released by Comptroller March Gallagher, showcasing a robust growth trajectory for the county’s finances.
The report, issued on February 15, 2025, noted that the sales tax revenue exceeded the $175 million budgeted for the year. The county’s sales tax rate stands at 8%, with half retained by New York State and the other half allocated to the county itself.
Sales Tax Growth and Economic Trends
According to the report, 2025’s sales tax revenues marked a 3.17% increase from the previous year. Over the past decade, Ulster County has experienced continuous growth in sales tax revenue, except for 2020 when revenues dipped slightly due to the impact of the COVID-19 pandemic. A significant rebound occurred in 2021, when sales tax revenues surged by 21.65% as the economy recovered.
The average annual growth in sales tax revenue over the last ten years has been approximately 5.41%, significantly higher than the historical average of around 3%. These revenues are crucial, representing 38% of the county’s legally adopted operating budget for 2026.
The report detailed that between March 1, 2024, and February 28, 2025, the leading sector for sales tax revenue was department stores, which contributed $18,845,278. Following closely were automobile dealers, generating $15,889,059, and restaurants and other eating establishments, which accounted for $15,322,486. Gasoline stations and traveler accommodations rounded out the top five revenue sources, contributing $13,723,969 and $9,410,076, respectively.
Impact of E-commerce on Sales Tax Revenue
The report also identified a significant increase in e-commerce as a factor positively influencing the county’s sales tax revenue. Following the 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, which mandates online sellers with gross sales exceeding $500,000 or more than 100 sales transactions to collect and remit sales tax, Ulster County has seen remarkable growth in this sector. Taxable sales in electronic shopping grew by 76% in the 2019-2020 fiscal year compared to the previous year, and further increased by 95% in 2020-2021.
In the last two complete sales tax years for which data is available (2022-2023 and 2023-2024), annual growth in e-commerce has averaged 4.5%. Although Gallagher stated that isolating online sales from traditional retail figures is challenging, it is clear that a substantial portion of department store sales is now conducted online.
Without the ability to tax online sales, Gallagher warned that local governments relying heavily on sales tax revenues would have faced a significant decline in revenue over time.
While the current trends appear positive, Gallagher urged caution among county lawmakers regarding overreliance on sales tax as a revenue source. He emphasized that dependence on this income could jeopardize the county’s fiscal health during economic downturns.
“Ulster County policymakers must be wary of relying too heavily on sales tax going forward as this revenue source is susceptible to declines during difficult economic times,” Gallagher stated.
The report serves as a reminder of both the opportunities and challenges facing Ulster County as it navigates through evolving economic landscapes.
