Estimating sales tax from new jobs induced effects

Hello, 

I am working on an analysis of the economic impact of a new distribution center. The distribution center will hire 1,000 full time employees, and the cost of constructing the distribution center is $80M. 

I am particularly interested in tow things; first, how will the new 1,000 full time jobs affect my region's retail market? I understand that I can observe their induced effect by looking at the induced output in retail sectors. Is this correct? 

Second, 

I would like to know the increased sales tax that will result from 1,000 new jobs and their induced effect. Is there a way to calculate this within IMPLAN? Or is the best way to approach this simply taking our sales tax formula and applying it to the total induced effect of the jobs on the retail sector? 

Please let me know if you have any questions. 


Best, 

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  • Hello,

    That is correct that you may look at the effects of these 1,000 new jobs on retail specifically by navigating through the results pages. In the summary, output, and employment tabs, you can scroll to any sector that says "retail" and view those impacts. Your indirect impacts will also be something to consider, as the business to business transactions that result from the influx of funding to your sector will likely have an effect on your region's retail market. If you are looking only to see the effects of increased household spending, then yes, you can look just at the induced effects.

    Secondly, our tax impact report does also contain sales tax figures that will be generated as a result of your impacts. These are broken out by household income categories.  If you would like to calculate your own direct taxes because you know a particular rate or amount of sales tax that is associated with your distribution center, you can certainly do that outside of the model. Without knowing what your sales tax formula entails, it is not possible to determine what it would cover. Because you mentioned "applying it to the total induced effect of the jobs on the retail sector" we would caution that taking a percentage of output and describing that as taxes may not be the most sound method of determining taxes. Output = Intermediate Expenditures + Value Added, and taxes are one of the components of value added already. If you adjust the amount of taxes that you have, the ratio of taxes to other property type income, employee compensation, and proprietor income will be changed, and thus those values will need to be edited as well.

    For more information on our tax report, please see the following article: https://implanhelp.zendesk.com/hc/en-us/articles/115009674528-Generation-and-Interpretation-of-IMPLAN-s-Tax-Impact-Report

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