I've collected the total county real estate and personnel property taxes paid by the industries I'm analyzing directly from the local tax department. Can I use this figure to replace the Direct, Tax on Production and Imports, TOPI Property Tax in the County Tax Impacts section? Or does the model number include other payments.within that category?
Replacing Model Property Tax Impacts
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Official comment
Good afternoon!
We typically do recommend that users replace IMPLAN estimated taxes with your own known tax values where applicable, especially given you are comfortable that the data you have is reflective of the property taxes associated with the Industry you are trying to model. Just for reference, you can read more about what is included in IMPLAN TOPI Estimates in our support article: Taxes: Where's the Tax?
Best,
Michael Nealy
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Hey Michael Nealy jumping in on this thread. When taxes paid are a known component of inputs -- i.e., we know how much say sales tax is paid - the direct value add/output number would also need to be changed post run, correct?
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Hello Johnathan!
Remember that taxes are going to be accounted for in various components of an Industry's Output (see Taxes: Where's the Tax). When thinking about sales taxes in particular, another key thing to note is that the taxes paid by an Industry on inputs to production are captured as a component of their Intermediate Input purchases, because they are remitted by the Industry receiving the Intermediate Input dollars. The Industry's own sales taxes will be a portion of Taxes On Production and Imports Net of Subsidies (TOPI). TOPI includes sales taxes, as well as various other types of other taxes such as property taxes, excise taxes, etc., but they will always be assumed to be included in the TOPI/Value Added figures for the Industry that remits the taxes to the government.
If you know what the Direct sales taxes should be for the Industry that you are analyzing (not for the inputs that they are purchasing in the Spending Pattern), they should be reflected as TOPI in an IIA Event. If you only know the sales taxes, but not the other components that are included in the TOPI value, you can see what portion of TOPI is assumed to be sales taxes in the Region (for all Industries, as relative tax percentages are only regionally specific in IMPLAN) from the TOPI column in the Detailed IxC SAM for the Region (Region Details>Social Accounts>IxC Social Accounting Matrix> Detail IxC SAM). Note that one would be able to shift around the tax impact on the Results end of an IMPLAN Project, but we would not want to change the estimated TOPI value for the Industry in IMPLAN. This means that to increase the sales tax, you would need to proportionately decrease the other taxes in TOPI so that the total remains unchanged for the Directly Impacted Industry.
Hope this helps!
Michael Nealy
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Thanks for the reply, this was really helpful! I have a couple follow up questions.
- How would you incorporate sales tax remitted to the study region for FF&E purchased outside of the study region? For example, a development project is importing equipment that gets installed but the local county is assessing sales tax on the equipment being bought and delivered to the project site. My first was approach was to simply adjust TOPI/Value Add/Output ex-post but I'm wondering if that correct?
- How would you account for known intermediate input sales tax amounts in an IIA event?
- Can you explain a bit more how the up-scaling would work?
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