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Tax on Production and Import (TOPI)

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zafersonmez

Hello,

What is the reason for getting negative TOPI? I am modeling an industry change activity with nearly 120 events. The region is a 10 county bi-state region. And I am using 2016 data. Is it because some of the industries I am modeling receive government subsidy or that companies in those industries are losing money? I thought about checking each event individually to find out which industry(s) is causing this outcome, but this would be very time-consuming. Is there a place in model setup where I can check tax structure for industries/counties? Thanks.

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    LHATT

    Negative TOPI is due to the given Industry receiving subsidies from the government. TOPI is typically tax payments to the government, so a negative TOPI value suggests a receipt of money from the government. Industry loses would be reflected by negative Other Property Income or by negative Proprietor Income if the loss is to a self-employed owner. To evaluate which Industries in your 120 Events has a Direct negative TOPI you could view the Detail Results, select Value Added > Tax on Production and Imports and then sort by Direct Effect in ascending order so that all the direct negative TOPI values show up at the top of the list.

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    zafersonmez

    Thank you for the clarification!

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    abarefield

    I understand the concept of negative TOPI values for the federal government, but I'm having a problem understanding these values for the state and local government taxes.  I am running a set of contribution analyses for agriculture and am getting very large negative numbers for our largest row crop (primarily Oilseed farming, Grain farming and Cotton farming) counties.  The numbers that I am most confused about are the Sales Tax, Property Tax, and Motor Vehicle License values. 

    For example, there is no government payment back to the firm/industry with regard to sales tax, even if the firm/industry has a negative income level.  Is IMPLAN comparing the amount that would have been paid without specific sales tax/property tax/motor vehicle license tax exemptions or lowered rates?  Farmers purchase a great number of products (inputs) for which they don't pay sales tax and they also have "discounted" property and motor vehicle license tax rates.

    Thanks for your help!

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    Candi Clouse, PhD

    A few things to help you understand what is going on with the data. 

    First, TOPI varies a lot year to year because of how agriculture products commodity prices vary.  If you feel that what is being represented in IMPLAN is not reflective of what you are looking to show, you can customize the study area data to better reflect the specifics of your circumstance.  

    Second, there are no industry-specific breakouts of TOPI so the negatives in one part (ie subsidies) gets shared out to all parts of TOPI (ie sales tax, property tax, etc.).  Here we recommend adjusting the TOPI values by category in your IMPLAN results, again to better reflect your specific circumstance.  

    Also, I recommend checking out the article Generation and Interpretation of IMPLAN's Tax Impact Report.

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