NEW YORK (WCBS 880) — New York City will likely lose $111 million in sales tax revenue every year as work from home becomes more and more routine in the aftermath of the pandemic, Comptroller Scott Stringer announced Tuesday.
In an analysis of the impact that remote work will have on New York City sales tax revenue, Stringer said city retailers will be impacted greatly – as roughly one million commuters are likely to travel around the five boroughs on a much less frequent basis.
He added that for roughly 3.7 million residents who live and work in the city, spending near their officers will be “largely replaced with spending closer to home.”
“Our analysis shows that the pandemic has fundamentally altered the way people work, with far reaching implications on the city’s economy and tax base,” said Stringer. “As remote work and hybrid work schedules keep many workers closer to home, small businesses in residential districts may see a boost from New Yorkers spending more in their neighborhoods.”
Stringer noted that the loss of foot traffic and lower sales will mostly be felt by small businesses within the city’s commercial districts.
“We must ensure that all our small businesses get the support they need in this economy; that means cutting red tape and making government more user-friendly, helping immigrant entrepreneurs scale up to new markets, and closing the digital divide so that brick-and-mortar small businesses can effectively compete with larger online retailers,” he said.
In the analysis, Stringer’s office found that if roughly 500,000 office workers in the city returned on a 3-day a week basis, retail demand would be lowered by $1.6 billion annually – creating a $146 million loss in sales tax.
That sales tax loss could be reduced to $35 million annually, however, “by increased demand from the 110,000 city residents who work outside the city and going forward will spend more time and purchase more in the city.”
Still, Stringer said that overall, city sales tax revenue is estimated to drop by $111 million each year as a result of increased work from home.
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