Negative Indirect Business Taxes

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    IMPLAN Support
    Hello Steven, While we look into your query, could you provide further detail about your model? Of specific interest: Are you using IMPLAN Online or IMPLAN Pro? What data year are you using? What are you using as your model region? What are your input values? Thank you, IMPLAN Staff
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    szaricki
    Thank you for your quick reply. I am using IMPLAN Pro with 2012 data. The model region is Cambria County, PA and the input values are 45 jobs with $3 million in employee compensation and no proprietor income in 2018. The amount of industry sales is generated.
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    IMPLAN Support
    Hello Steven, Net TOPI is negative for rail transportation in Pennsylvania according to the Bureau of Economic Analysis (BEA). Our data sources report TOPI only at the state level, so if the state value is negative or positive, that tends to be distributed to all of the counties. If you look at state-level subsidies by industry on the BEA’s webpage, http://bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=1&isuri=1 in the “Annual Gross Domestic Product (GDP) By State” tables, it will be clear that rail transportation is subsidized to the point of having negative TOPI, meaning that subsidies > gross TOPI, so net TOPI, which is what Implan uses, is negative. Regards, IMPLAN Support
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    szaricki
    Thank you again for your quick reply. Can you please tell me whether a zero amount for Taxes on Production and Imports (TOPI) can be presented rather than a negative amount? The explanation would be that the rail industry in Pennsylvania is subsidized and consequently a negative amount is not presented. Hope to hear from you soon.
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    IMPLAN Support
    Hello Steven, As long as the correct situation is described in terms of subsidization, a 0 amount for TOPI can be presented. Regards, IMPLAN Staff
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    mmensing

    Related to the question above - we are trying to explain a negative TOPI value using 2015 Alabama data on a $283,000 increase in the beef cattle/ranching industry. Is this also a subsidy issue, or something else?

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    LHATT

    Hi Michelle,

     

    Yes, this also the result of the industry on average for the overall region seeing negative TOPI due to subsidies from the government exceeding the taxes paid by the industry.

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    mmensing

    Thank you! Is there a source you used that I can reference on the subsidies for this industry?

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    LHATT

    Please take a look at our Farm Data Procedures document.
    https://implanhelp.zendesk.com/hc/en-us/articles/115009505827-Farm-Data-Procedures

    The final sections regarding annual VA are the most relevant for you, and below are some additional explanations that expound on the document and relate the content to AL values.

    Regarding farm sector VA calculation at the state level:

    • The general procedure starts with disclosing and projecting BEA OVA (Other Value Added - primarily OPI and TOPI) data, which is in BEA sectoring (which contains only a single "farm" sector).
      • Disclosing: In the case of AL, the state GDP data are disclosed, so we do not need to disclose the value. The disclosed raw BEA State GDP data provide TOPI, Subsidies, and TOPI less Subsidies (which is negative for AL).
      • Projecting: The disclosed values are projected based on the change in total farm output from last year to this year (total farm again as greater detail is not available from the BEA).
        • Subsidies are also adjusted to account for the tendency of subsidies to decrease as farm output rises.
    • Total Farm sector VA is then distributed to IMPLAN sectors using one of two methods depending on the availability of state level ERS Agriculture Resource Management Survey (ARMS) data, see linked document for more.
      • Note: Alabama is not covered by ARMS

     

    As far as a source to link to, this link is to the BEA's GDP by state interactive data. Under Annual Gross Domestic Product By State the user will find tables for TOPI, TOPI less subsidies, and subsidies. The TOPI less subsidies value for AL is negative.
    https://apps.bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=1&isuri=1

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