Sales Tax - Retail

Comments

1 comment

  • Avatar
    IMPLAN Support
    Thank you for your post! The sales tax remitted by retail establishments accounts for all of the sales tax that one pays at retail establishments. So, if you have an impact event (assuming this what you mean by IMPLAN’s “standard impact results”) that is of retail margin only, the (direct) sales tax impact is: (regional sales tax share of TOPI)*(Retail TOPI impact). This is the same as if you entered gross retail sales. The model is assuming that when you have a retail margin impact, that margin impact arises from gross sales at a retail establishment, but you happen to know only the margin. In other words, IMPLAN does give you a tax impact that is a sales tax rate applied to the total value of retail margin. Regarding your second question – right, it would not make sense to apply the sales tax rate to the retail margin, you would want to apply a sales tax rate to gross sales. But, note that gross sales in IMPLAN includes TOPI, so it includes sales tax. So, you should calculate gross sales, divide that by (1+current sales tax rate) to get gross sales less sales tax that was paid on it, then multiply the result of that by your new sales tax rate to get new sales tax revenue.

Please sign in to leave a comment.