Locality Taxes: Implan Calculated Tax Impact far Lower than Hand Calculation?

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    IMPLAN Support

    Hi Jeff,

    Thank you for your Forum submission. We look forward to assisting you with your request.  Due to the increased volume and demand on our economists, you may experience a longer response time that optimal.  We will answer your questions in the order in which they were received. If you need a more prioritized response, we do offer dedicated time with our economists at $225 per 30 minutes and this can be accommodated within 24 hours of your request, during standard business days. Please contact your Customer Success Manager to schedule this or email Info@implan.com.

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    IMPLAN Support

    Hi Jeff,

    The industry Output to TOPI ratio used to determine Direct TOPI taxes is based on the by industry study area data for total industry output and TOPI. 

    Note that our source data on total TOPI taxes by state and by industry are collected at a more aggregate level (approximately 90 sectors) than the sectoring scheme of IMPLAN. We distribute TOPI by state and industry to detailed industries using national data and other proxy data. As TOPI includes all taxes and fees and is net of subsidies, the ratio will not be reflective of any given marginal tax rate (the ratio is an effective tax rate). 

    Additionally, Total TOPI taxes are industry- and place-specific, but the allocation of TOPI among its components, e.g., sales tax and property tax, is only place-specific. 

    For these reasons, we recommend constructing your own estimates of direct taxes whenever possible and using the model estimates for indirect and induced tax impacts. 

    Notes regarding property taxes:

    • When you run money through a new construction sector, the direct TOPI are the taxes paid by the construction company. The taxes on the finished building are not included. They are not captured until you start "operating" the building.
    • Because home ownership is treated as an industry (Sector 441 Owner-Occupied Dwellings), households' real estate property taxes are included in the Owner-Occupied Dwellings sector's TOPI. Some states collect tax on personal property separate from real estate (e.g., boats, cars); these show up as Households' payments to Personal Tax: Property Taxes in the Tax Impact Report.

     

    Additional Thoughts:

    • Is there a reason as to why the machinery and tools tax would only be paid in year one? Is the tax only paid on new equipment? 
    • In most cases, specialized equipment is imported. For the $17 Million in food product manufacturing (Activity 1 Event 2), is the equipment being purchased directly from a local manufacturer, or is it purchased from a local wholesaler? 
    • For Event 1 Activity 2: You may already have, but when both Employment and Employee Compensation are known, we recommend entering Employee Compensation first.

     

    Hope this helps and let us know if you have any additional questions.  

    Regards,

    IMPLAN Staff

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