Villages sue county, towns for ‘fair share’ of sales tax revenue

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Villages sue county, towns for ‘fair share’ of sales tax revenue
Photo by Teri West

A number of villages are suing Nassau County and the towns of North Hempstead, Hempstead and Oyster Bay for $21.5 million, according to court filings, in a bid to get what they see as their fair share of sales tax revenue.

According to the lawsuit, villages were entitled to up to one-sixth of the sales tax revenue remaining after towns and cities have received their funding from Nassau County. The intent of the laws, the lawsuit goes on to say, was to benefit all municipalities and help defray costs.

Instead, the suit alleges, the towns have used the village’s populations to boost how much money they get, while allocating money into a general services fund rather than a special revenue fund and “unlawfully and arbitrarily” withholding tax revenue from the village.

Nassau County has a 4.25 percent sales tax rate.

According to an amended complaint filed against Nassau County and the towns, more than a dozen villages are seeking $21.5 million.
According to an amended complaint filed against Nassau County and the towns, more than a dozen villages are seeking $21.5 million.

“Contrary to the clear intent of the Legislature … namely to assist the towns, cities and villages of Nassau County,” the suit says, “Respondents have arbitrarily either not provided the Villages with their rightful share of collected additional sales and use tax revenue or provided much less than required under N.Y. Tax Law…”

The Village of Freeport is leading the suit from 18 villages, and seven local villages signed on: Russell Gardens, East Williston, Great Neck Estates, Lake Success, Plandome Manor, Roslyn and Roslyn Harbor.

Ralph Kreitzman, the executive director of the Nassau County Village Officials Association and a former mayor of Great Neck, said that while a “much, much larger” share goes to towns under statute, villages have not received their “fair share.”

“There’s no question that we are not receiving our fair share of sales tax revenue by Nassau County,” Kreitzman said Monday. “Most counties do share and Nassau County was given an additional three-quarters of 1 percent, which by statute is permitted to be shared with the villages.”

“I don’t think there’s anyone at the village level or our association that believes we’re receiving a fair share,” Kreitzman added.

A Town of Hempstead spokesman could not be reached for comment. Nassau County, as well as the towns of North Hempstead and Oyster Bay, said officials do not comment on “pending litigation.”

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