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Boone County Retail SalesAugust 27, 2007
Judith I. StallmannProfessor: Agricultural Economics
Rural SociologyCommunity Development Extension
Truman School of Public Affairs
Economic changes affecting sales tax revenues
• Business cycles• Inflation—gasoline and food prices • Retail prices for many items have fallen
resulting in lower tax collections per unit• People spending a larger percentage of
their income on services, most of which are not subject to sales tax
• Regional trade center • Internet and catalog sales increasing
©Judith I. Stallmann
http://ded.mo.gov/researchandplanning/indicators/taxable_sales/taxable_sales1q07.stm
Annual growth rate of taxable sales
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Boone total taxablesalesMissouri
Boone taxable retail
©Judith I. Stallmann
Boone County
Inflation• Gasoline• Food prices increasing
– Costs of energy– Frosts killed orange crop– Corn prices up due to ethanol production
• Affect costs of animal products• More land planted to corn and less to other
crops, so their prices also rise
• Consumer Price Index©Judith I. Stallmann
Monthly oil prices
0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Dol
lars
©Judith I. Stallmann
Cumulative growth rate: Oil prices, inflation and county per capita income
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%19
91
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
oil pricesPer capita incomeCPI
©Judith I. Stallmann
Boone County and CPI cumulative growth rates: 1990-2006
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Taxable salesCPIPopulationTotal personal incomePer capita incomeRetail sales
©Judith I. Stallmann
Boone taxable sales• Retail sales• Other sectors• Change overtime in composition of
taxable sales
Taxable R etail S ales as a P erc entag e of Total T axable S ales : 1990-2006
58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
70.00%
72.00%
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
2006
©Judith I. Stallmann
Boone County
R etail S ales by S ec otr as a P erc entag e of Total R etail S ales : 2004
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%19
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
B uilding S upplies G eneral Merc handis eG roc ery Automobile & S ervic e S tationsApparel F runituresE at & Drink Mis c ellaneous R etail
©Judith I. Stallmann
Boone County
Taxable Sales by Sector: 2006
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
WH
OLE
SALE
TRA
DE
-D
UR
AB
LEG
OO
DS
CO
MM
UN
ICA
TIO
N
ELEC
TRIC
, GA
SA
ND
SA
NIT
AR
YSE
RVI
CES
WH
OLE
SALE
TRA
DE
-N
ON
DU
RA
BLE
GO
OD
S
MIS
CEL
LAN
EOU
SSE
RVI
CES
HO
TELS
,R
OO
MIN
GH
OU
SES,
CA
MPS
/OTH
ER
BU
SIN
ESS
SER
VIC
ES
AU
TOM
OTI
VER
EPA
IR,
SER
VIC
ES A
ND
GA
R
Dol
lars
©Judith I. Stallmann
Boone County
Taxable Sales by Sector: 2006
01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000
10,000,000
PER
SON
AL
SER
VIC
ES
AM
USE
MEN
T/R
ECR
EATI
ON
SER
V, X
CEP
MO
T
CO
NST
RU
CTI
ON
- SP
ECIA
LTR
AD
E C
ON
TRA
PRIN
TIN
G, P
UB
LISH
ING
,A
ND
ALL
IED
IN
AG
RIC
ULT
UR
AL
SER
VIC
ES
HEA
LTH
SER
VIC
ES
BLD
G C
ON
STR
-GEN
CO
NTR
AN
D O
PER
ATI
VE
Dol
lars
©Judith I. Stallmann
Boone County
Top 8 Sectors: 2006-1990
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
Dol
lars
WHOLESALE TRADE -DURABLE GOODS
COMMUNICATION
ELECTRIC, GAS ANDSANITARY SERVICES
WHOLESALE TRADE -NONDURABLE GOODS
MISCELLANEOUSSERVICES
HOTELS, ROOMINGHOUSES,CAMPS/OTHER
BUSINESS SERVICES
AUTOMOTIVE REPAIR,SERVICES AND GAR
©Judith I. Stallmann
Boone County
Percentage of Taxable Sales:1990-2006
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
20062005200420032002200120001999199819971996199519941993199219911990
UndisclosedBottom 9 sectorsSecond 7 SectorsTop 8 SectorsRetail
©Judith I. Stallmann
Boone County
People spending a larger percentage of their income on services, most of which are not
subject to sales taxIncome levels and spending
• Boone per capita income• In 1998 was $25,000• In 2005 was $35,000
Sector Earnings as a Percentage of the US Total: 1929-2006
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
1929
1934
1939
1944
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
ManufacturingOther goodsDistributiveServicesGovernmentManufacturing rev.Other Goods RevDistributive RevService Rev
©Judith I. StallmannData discontinuity because of change in classifications
Taxable R etail S ales as a P erc entag e of Total T axable S ales : 1990-2006
58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
70.00%
72.00%
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
2006
©Judith I. Stallmann
Boone County
Growth in family income and taxable expenditures by income levels
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
$10,000 to$14,999
$15,000 to$19,999
$20,000 to$29,999
$30,000 to$39,999
$40,000 to$49,999
$50,000 to$69,999
$70,000and more
Growth in taxable expenditures
Growth in income
©Judith I. Stallmann
Based on BLS data for the Midwest
Taxable Sales per Dollar of Personal Income
0.00
0.10
0.20
0.30
0.40
0.50
0.60
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Cen
ts
Total taxable salesTaxable retail
©Judith I. Stallmann
Boone County
Regional Trade Center
Actual and potential retail sales• Formula to estimate potential retail sales
common in regional trade analysis • Compare actual retail sales with potential
to determine if the county is attracting more or losing some retail sales
• Will estimate– Potential county-level traditional retail trade– Potential e-commerce at county level
©Judith I. Stallmann
Estimation1) State per capita sales2) County per capita income as a proportion
of state per capita income 3) State per capita sales * county income
proportion = potential sales per capita4) Potential sales per capita * county
population = total potential sales5) Actual sales – potential sales = gain or
loss of sales©Judith I. Stallmann
Estimate of County taxable sales gains: 2005
Boone County Retail sales Total taxable sales
Potential sales $1,170,333,565 $1,817,123,859Actual sales 1,372,711,491 2,085,143,986Sales gain 202,377,926 268,020,127½ cent tax 1,011,889.6 1,340,100.61/8 cent tax 252,972.4 335,025.1
©Judith I. StallmannNote: Correction to sales tax revenue estimates 8-27-07
E-commerce• Internet and catalog sales increasing• Potential retail sales loss to e-retail
Estimated Quarterly U.S. Retail E-commerce Sales
as a Percentage of Total Quarterly Retail Sales:
4th Quarter 1999–4th Quarter 2006Percentage of Total
http://www.census.gov/mrts/www/data/html/06Q4.html
Components of E-commerceBusiness to Consumer: $93 billion• Some of this is already taxed
– Traditional catalog houses on internet– Traditional retailers on internet (national and
local)– Automobiles are very important
• “Pure” e-commerceBusiness to Business: $1.3 trillion • Some of this is also taxable
http://www.census.gov/eos/www/2005/2005tables.html
National sales: 2005
(Millions of $s) Total E-commerce
Manufacturing $4,735,387 1,265,987
Wholesale (excludes inter-firm transfers)
3,585,038 474,801
Retail trade 3,693,430 93,280
Selected Services 5,983,689 95,691
http://www.census.gov/eos/www/2005/2005tables.html
National retail sales: 2005
Selected Sectors (Millions of $s)
Total sales E-commerce sales
Total retail trade 3,693,430 $93,280
441 Autos & parts 888,307 16,729
454 Non-store retailers
244,333 68,054
454110 Electronic and mail order
161,598 65,387
http://www.census.gov/eos/www/2005/2005tables.html
Estimate of e-retail purchases by county residents
US per capita e-retail sales $314.59County per capita incomeUS per capita income .91County potential e-retail per capita $287.65
County potential e-retail $41,232,832
Taxes are paid on some e-retail©Judith I. Stallmann
County e-commerce estimate • Affected by income, which is in the
formula• Also affected by connectivity
– Boone County is likely more connected than the US average
• Likely also affected by age– Boone County has a large young
population
©Judith I. Stallmann
Predicting taxable sales
• In general the previous year is a reasonable starting point—but does not provide an accurate estimate
• Predicting turning points is difficult– Will it grow faster than the previous year or
slower?– Factors affecting retail sales (examples)
• Income• Inflation• Retail availability and competition
©Judith I. Stallmann