1. IMPLAN - Support
  2. Community
  3. Analysis Questions

Sales Taxes Across States

Avatar
Miriam

I am modeling a manufacturing project in State A where a company purchases manufactured goods for $108 ($100 price + $8 in sales tax). However, the sales tax is collected in State B, not in the region where the manufacturing activity occurs.

  1. When entering the event in IMPLAN for State A, should the Output/Event Value reflect the full purchaser price ($108) or only the pre-tax value ($100)?

    • I understand that If I enter $100, IMPLAN will still allocate a portion of the resulting output to taxes on production and imports (TOPI), including sales taxes, based on the model’s tax coefficients.  As a result, part of the modeled output would still be attributed to taxes within the region.

  2. Should the $8 be reported outside the model as a direct fiscal impact, or is there a recommended way to represent a tax payment that accrues to a different state within IMPLAN?

 

Was this post helpful?
0 out of 0 found this helpful

Comments

1 comment

Sort by Date Votes
  • Official comment
    Avatar
    Adam Blair

    Thank you for the question! The event value for State A should include only the pre‑tax value of $100. IMPLAN’s Industry Output represents the value of goods or services produced within the modeled region, so including the $8 in sales tax would inflate the direct impact and allow those dollars to circulate through State A’s economy. IMPLAN will still generate TOPI for State A based on its own tax structure, since those coefficients represent the average production‑related taxes that occur when that industry operates locally. Because the $8 in sales tax is entirely earned by another state, the cleanest approach is to report it outside the model as an external direct fiscal impact to State B.

Please sign in to leave a comment.