Inclusion of sales tax in model input & other Qs
Hello,
A few questions:
- I want to understand the economic effects associated with $1 million in consumer expenditures for 411 - hotels. I know that of the $1 million, $80,000 was sales & lodging taxes paid by the consumer. Do I enter $1 million as the industry sales, or $920,000? If $920,000, in what IMPLAN industry would I enter the remaining $80,000?
- Suppose I want to model $1 million in consumer spending on restaurants (413), and I know that $100,000 of that spending is in the form of tips. Would I model $1 million in industry input for 413, or $900,000? If $900,000, any guidelines as to how the remaining $100,000 should be modeled?
Thanks.
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Hi David, Exactly. You would log $1MM as your Industry Sales. IMPLAN will then calculate the impacts associated to that $1MM spending for Industry 411 and the associated tax impacts. Since you know that the tax impacts are $80,000, you can export the Direct Tax Impact Results into Excel to make your adjustments accordingly. Also keeping in mind that you will also need to make adjustments to the other Direct Tax Impacts but not to exceed the % of Direct impact of the $1MMM. In regards to tips. The tips should remain apart of Industry Sales. Industry Sales is equivalent to Output which is the 'gross' value of sales. IMPLAN then estimates the income and tax and profit, etc portions based on regional relationships. Theoretically, the BEA output data we use for the restaurant sector (and presumably other sectors that typically involve tips) include tips - the tips are part of the "benefits" received by the workers. Restaurant employees are required to report the tips on each night. This of course depends on how accurately the workers report their tips. In terms of setting up an impact, you will want to include the tips as a part of Employee Compensation too, since you will want to capture the induced effects of these tips (the workers spending the tips). Alternatively, if you have an estimate of the “ under-reporting rate”, you can adjust the Labor Income to reflect this additional amount. So principally the tips should be captured in the estimated compensation, or if they know total compensation they can add the tips to that compensation and edit the Employment Compensation value. The overall data is a good estimate as regards taxes the point that you are referencing is specific to the splits of transaction types. Instead the tax impact reports are estimates provided based on actual tax dollars for your region. Thus the values of the tax impact reflect actual regional estimates but aren't calculated on the basis of rates. However, while the tax estimates are regional the split of taxes across payment types is based on national averages. Because of this the View By: Direct Tax Impact report should reflect an accurate total tax value, but will not reflect necessarily the regionally appropriate distribution -
Hi David, Exactly. You would log $1MM as your Industry Sales. IMPLAN will then calculate the impacts associated to that $1MM spending for Industry 411 and the associated tax impacts. Since you know that the tax impacts are $80,000, you can export the Direct Tax Impact Results into Excel to make your adjustments accordingly. Also keeping in mind that you will also need to make adjustments to the other Direct Tax Impacts but not to exceed the % of Direct impact of the $1MMM. In regards to tips. The tips should remain apart of Industry Sales. Industry Sales is equivalent to Output which is the 'gross' value of sales. IMPLAN then estimates the income and tax and profit, etc portions based on regional relationships. Theoretically, the BEA output data we use for the restaurant sector (and presumably other sectors that typically involve tips) include tips - the tips are part of the "benefits" received by the workers. Restaurant employees are required to report the tips on each night. This of course depends on how accurately the workers report their tips. In terms of setting up an impact, you will want to include the tips as a part of Employee Compensation too, since you will want to capture the induced effects of these tips (the workers spending the tips). Alternatively, if you have an estimate of the “ under-reporting rate”, you can adjust the Labor Income to reflect this additional amount. So principally the tips should be captured in the estimated compensation, or if they know total compensation they can add the tips to that compensation and edit the Employment Compensation value. The overall data is a good estimate as regards taxes the point that you are referencing is specific to the splits of transaction types. Instead the tax impact reports are estimates provided based on actual tax dollars for your region. Thus the values of the tax impact reflect actual regional estimates but aren't calculated on the basis of rates. However, while the tax estimates are regional the split of taxes across payment types is based on national averages. Because of this the View By: Direct Tax Impact report should reflect an accurate total tax value, but will not reflect necessarily the regionally appropriate distribution
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