Construction Sectors Yield Negative Direct tax Imp

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joetawfik

• July 07, 2015 16:06

Hi, I had a questions as to why construction sectors are yielding negative tax impacts in the model. I tried to do some analysis using these 4 sectors and I get negative direct tax impact. Is there a reason for this? 57 Construction of new commercial structures, including farm structures 449 Architectural, engineering, and related services 447 Legal services 437 Insurance carriers Thanks,

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  IMPLAN Support

  • July 09, 2015 16:15

  Hello Joseph, Could you please let us know what region(s) you are building into your model(s)?

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  joetawfik

  • July 09, 2015 18:32

  State of Missouri & St. Louis MSA. Thanks,

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  IMPLAN Support

  • July 13, 2015 15:12

  Hello, thank you for your post. This can happen when running impacts on sectors that have negative OPI and is simply an artifact of the linear nature of IMPLAN models. More realistically, corporations that lose money in a given year are likely to not pay any corporate profit taxes as opposed to paying negative taxes - we will bring this to the attention of the IMPLAN software programmers in hopes that we might be able to change how the software handles such cases. Since taxes are treated as a leakage in IMPLAN (i.e., they do not generate any indirect or induced effects), these negatives do not ripple out into the rest of the impacts. Our recommendation would be to simply zero them out and then recalculate your total tax impacts.

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