Boone County Retail Sales August 27, 2007 Judith I. Stallmann Professor: Agricultural Economics...

Boone County Retail SalesAugust 27, 2007

Judith I. StallmannProfessor: Agricultural Economics

Rural SociologyCommunity Development Extension

Truman School of Public Affairs

Economic changes affecting sales tax revenues

• Business cycles• Inflation—gasoline and food prices • Retail prices for many items have fallen

resulting in lower tax collections per unit• People spending a larger percentage of

their income on services, most of which are not subject to sales tax

• Regional trade center • Internet and catalog sales increasing

©Judith I. Stallmann

http://ded.mo.gov/researchandplanning/indicators/taxable_sales/taxable_sales1q07.stm

Annual growth rate of taxable sales

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Boone total taxablesalesMissouri

Boone taxable retail


Boone County

Inflation• Gasoline• Food prices increasing

– Costs of energy– Frosts killed orange crop– Corn prices up due to ethanol production

• Affect costs of animal products• More land planted to corn and less to other

crops, so their prices also rise

• Consumer Price Index©Judith I. Stallmann

Monthly oil prices

0.000

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

Jan-90

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Dol

lars


Cumulative growth rate: Oil prices, inflation and county per capita income

-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%19

91

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

oil pricesPer capita incomeCPI


Boone County and CPI cumulative growth rates: 1990-2006

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Taxable salesCPIPopulationTotal personal incomePer capita incomeRetail sales


Boone taxable sales• Retail sales• Other sectors• Change overtime in composition of

taxable sales

Taxable R etail S ales as a P erc entag e of Total T axable S ales : 1990-2006

58.00%

60.00%

62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

2006


Boone County

R etail S ales by S ec otr as a P erc entag e of Total R etail S ales : 2004

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%19

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

B uilding S upplies G eneral Merc handis eG roc ery Automobile & S ervic e S tationsApparel F runituresE at & Drink Mis c ellaneous R etail


Boone County

Taxable Sales by Sector: 2006

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

WH

OLE

SALE

TRA

DE

-D

UR

AB

LEG

OO

DS

CO

MM

UN

ICA

TIO

N

ELEC

TRIC

, GA

SA

ND

SA

NIT

AR

YSE

RVI

CES

WH

OLE

SALE

TRA

DE

-N

ON

DU

RA

BLE

GO

OD

S

MIS

CEL

LAN

EOU

SSE

RVI

CES

HO

TELS

,R

OO

MIN

GH

OU

SES,

CA

MPS

/OTH

ER

BU

SIN

ESS

SER

VIC

ES

AU

TOM

OTI

VER

EPA

IR,

SER

VIC

ES A

ND

GA

R

Dol

lars


Boone County

Taxable Sales by Sector: 2006

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

10,000,000

PER

SON

AL

SER

VIC

ES

AM

USE

MEN

T/R

ECR

EATI

ON

SER

V, X

CEP

MO

T

CO

NST

RU

CTI

ON

- SP

ECIA

LTR

AD

E C

ON

TRA

PRIN

TIN

G, P

UB

LISH

ING

,A

ND

ALL

IED

IN

AG

RIC

ULT

UR

AL

SER

VIC

ES

HEA

LTH

SER

VIC

ES

BLD

G C

ON

STR

-GEN

CO

NTR

AN

D O

PER

ATI

VE

Dol

lars


Boone County

Top 8 Sectors: 2006-1990

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

Dol

lars

WHOLESALE TRADE -DURABLE GOODS

COMMUNICATION

ELECTRIC, GAS ANDSANITARY SERVICES

WHOLESALE TRADE -NONDURABLE GOODS

MISCELLANEOUSSERVICES

HOTELS, ROOMINGHOUSES,CAMPS/OTHER

BUSINESS SERVICES

AUTOMOTIVE REPAIR,SERVICES AND GAR


Boone County

Percentage of Taxable Sales:1990-2006

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

20062005200420032002200120001999199819971996199519941993199219911990

UndisclosedBottom 9 sectorsSecond 7 SectorsTop 8 SectorsRetail


Boone County

People spending a larger percentage of their income on services, most of which are not

subject to sales taxIncome levels and spending

• Boone per capita income• In 1998 was $25,000• In 2005 was $35,000

Sector Earnings as a Percentage of the US Total: 1929-2006

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

1929

1934

1939

1944

1949

1954

1959

1964

1969

1974

1979

1984

1989

1994

1999

2004

ManufacturingOther goodsDistributiveServicesGovernmentManufacturing rev.Other Goods RevDistributive RevService Rev

©Judith I. StallmannData discontinuity because of change in classifications

Taxable R etail S ales as a P erc entag e of Total T axable S ales : 1990-2006

58.00%

60.00%

62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

2006


Boone County

Growth in family income and taxable expenditures by income levels

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

$10,000 to$14,999

$15,000 to$19,999

$20,000 to$29,999

$30,000 to$39,999

$40,000 to$49,999

$50,000 to$69,999

$70,000and more

Growth in taxable expenditures

Growth in income


Based on BLS data for the Midwest

Taxable Sales per Dollar of Personal Income

0.00

0.10

0.20

0.30

0.40

0.50

0.60

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Cen

ts

Total taxable salesTaxable retail


Boone County

Regional Trade Center

Actual and potential retail sales• Formula to estimate potential retail sales

common in regional trade analysis • Compare actual retail sales with potential

to determine if the county is attracting more or losing some retail sales

• Will estimate– Potential county-level traditional retail trade– Potential e-commerce at county level


Estimation1) State per capita sales2) County per capita income as a proportion

of state per capita income 3) State per capita sales * county income

proportion = potential sales per capita4) Potential sales per capita * county

population = total potential sales5) Actual sales – potential sales = gain or

loss of sales©Judith I. Stallmann

Estimate of County taxable sales gains: 2005

Boone County Retail sales Total taxable sales

Potential sales $1,170,333,565 $1,817,123,859Actual sales 1,372,711,491 2,085,143,986Sales gain 202,377,926 268,020,127½ cent tax 1,011,889.6 1,340,100.61/8 cent tax 252,972.4 335,025.1

©Judith I. StallmannNote: Correction to sales tax revenue estimates 8-27-07

E-commerce• Internet and catalog sales increasing• Potential retail sales loss to e-retail

Estimated Quarterly U.S. Retail E-commerce Sales

as a Percentage of Total Quarterly Retail Sales:

4th Quarter 1999–4th Quarter 2006Percentage of Total

http://www.census.gov/mrts/www/data/html/06Q4.html

Components of E-commerceBusiness to Consumer: $93 billion• Some of this is already taxed

– Traditional catalog houses on internet– Traditional retailers on internet (national and

local)– Automobiles are very important

• “Pure” e-commerceBusiness to Business: $1.3 trillion • Some of this is also taxable

http://www.census.gov/eos/www/2005/2005tables.html

National sales: 2005

(Millions of $s) Total E-commerce

Manufacturing $4,735,387 1,265,987

Wholesale (excludes inter-firm transfers)

3,585,038 474,801

Retail trade 3,693,430 93,280

Selected Services 5,983,689 95,691


National retail sales: 2005

Selected Sectors (Millions of $s)

Total sales E-commerce sales

Total retail trade 3,693,430 $93,280

441 Autos & parts 888,307 16,729

454 Non-store retailers

244,333 68,054

454110 Electronic and mail order

161,598 65,387


Estimate of e-retail purchases by county residents

US per capita e-retail sales $314.59County per capita incomeUS per capita income .91County potential e-retail per capita $287.65

County potential e-retail $41,232,832

Taxes are paid on some e-retail©Judith I. Stallmann

County e-commerce estimate • Affected by income, which is in the

formula• Also affected by connectivity

– Boone County is likely more connected than the US average

• Likely also affected by age– Boone County has a large young

population


Predicting taxable sales

• In general the previous year is a reasonable starting point—but does not provide an accurate estimate

• Predicting turning points is difficult– Will it grow faster than the previous year or

slower?– Factors affecting retail sales (examples)

• Income• Inflation• Retail availability and competition


Boone County Retail Sales August 27, 2007 Judith I. Stallmann Professor: Agricultural Economics...

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