Sales Tax

Hello Jeff. IMPLAN does not calculate dollar impact utilizing local tax rates where the rates are sales tax or property taxes or otherwise? All the tax data used in the tax reports is from the Social Accounting Matrix (SAM) data. There are no tax rates per se. The IMPLAN tax impacts represents the historical distribution of collected indirect business taxes for the region based on data from the Census of Government Finance. Similarly for payroll taxes and income taxes, we have estimates of overall labor income and taxes paid on those incomes. In effect, we are estimating an overall average tax rate for each of the indicators. The tax data reflects actual tax receipts for the year of your IMPLAN data. Assuming that annual rate adjustments are reflected in the Census data, they will also be reflected in the IMPLAN data. We know that sales taxes are going to increase this year and from now on by 1%. Since we bought the 2012 data, the tax rate in the model would be the rate that existed till now. To calculate the impact (especially tax impacts) we would need to modify the tax rates to include the increase. How would I change this in the model? ----- We recommend that you create your own tax impact report based on your known sales tax rate in in your study region. Given your situation, it will require some customization to the tax report to get a more accurate estimate of the tax impact in light of the local tax rate for selected retail sectors in the state. These can be seen by selecting View By: Direct from the "View By" drop-down menu on the Tax Results report page. Since you know what the new sales tax rate will be, we suggest that you apply the new tax rate to the retail sales in the study region. Take the estimate derived from this process and replace the model’s direct estimate for sales taxes with your own estimate of direct taxes. You might want to decrease the other categories of direct TOPI to reflect each category’s new share of the direct taxes (TOPI) and so that the total direct TOPI is not overly inflated. Since the indirect and induced taxes in the model involve many industries, the average distribution of these taxes as generated by the software would still be appropriate in these cases. Now you add the calculated direct tax impacts to the model estimate of indirect and induced taxes to get total State and Local taxes in the study region. If you are planning on applying the new tax rate to the IMPLAN’s retail sectors 320-330, then you should remember that the total output impact for the retail sectors is gross margin, not gross sales. Yet sales taxes apply to gross sales. Thus, before you apply your new tax rate to these sectors, you will need to convert those margins to sales. You can get the retail margins for these sectors by navigating to Edit Event Option>Edit Event Properties>Margins>Yes to see the margin for each retail sector. Now divide the total output impact for the retail sector by that retail sector's margin (in decimal form) to get gross sales. This figure is multiplied by the new sales tax rate for each sector and summed to get the total direct sales tax impact. Again, since the indirect and induced taxes in the model absent the new tax rate involve many industries, the average distribution of these taxes as generated by the software would still be appropriate in these cases. Adding the calculated direct tax impacts to the model estimate of indirect and induced taxes to get total State and Local taxes in the study region. Let us know if you need additional assistance.