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Accounting for personal income taxes of commuters

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Russ Smith

my construction project of $20 million generates 177 direct jobs within my city.  I estimate that 15% of those jobs are filled by commuters from neighboring cities.  In Candi Clause article (loved it) Taxes: Where's the Tax? she writes "In IMPLAN, all personal income tax is assumed to be paid at the place of residence".  I am understanding this to mean that IMPLAN is not accounting for the income tax levied on the commuter workers by my city while they work in the city.  Is this correct?  Can i justifiably add in my estimate of the personal income tax collected on commuters by my city?

thanks,

russ

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    Candi Clouse, PhD

    Russ - 

    Glad you liked the tax article!

    You are correct. IMPLAN is not accounting for the income tax levied on the workers that commute into the study area while they work in the study area - only the payroll taxes associated with those commuters, which are not personal taxes, will be collected and counted in the study area.  Note that the IMPLAN commuter rate may not be 15%. If you want to adjust what IMPLAN has as the default, check out the article Estimating Employee Compensation Adjustments for Known Commuting Rates.

     

     

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