Tax Impact Question
I am working on an impact analysis for a large commercial/retail development (that is being proposed) and I am having a hard time figuring out the correct tax impacts. The client is especially interested in the property tax impacts. I have a few questions in two areas:
1. Right now I have included the TOPI: Property Taxes in the local property tax impact. We have no state property tax, so it should be correct to add this in as a property tax impact, correct? Or....do local governments not consider this to actually be property tax revenue? Can someone explain how to interpret TOPI:Property Tax?? From reading and reading online it seems as though this is indirect business tax revenue. Could someone explain how this translate to property tax revenue?
2. Do the tax impacts include the property taxes that would be paid on the actual property itself? If so, they seem VERY low in this case. I'm wondering if it doesn't include estimates of the property tax burden for the property itself, but instead calculates the property taxes that would result from the increased economic activity.
HELP!!!!
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Hello Laura, How your region treats property tax will be specific to your region. Our Tax Impact report is built on information from the US Census Bureau's collection of Survey of State and Local Government receipts and expenditures data (Annual Survey of State and Local Government Finances). If your State & Local Government Tax impact includes TOPI: Property Tax, then the Census survey reports receipt of property tax. As part of a 2003 NIPA revision, Indirect Business Tax (IBT) was modified to Taxes On Production and Imports Net Subsidies (TOPI). https://www.bea.gov/faq/index.cfm?faq_id=93 Property Taxes are a portion of the TOPI paid by industries. If 3% of an industry's total Output goes to TOPI, then of the total Output impact associated to the industry, 3% will be associated to TOPI. How the total TOPI amount is split amongst the different TOPI categories (sales tax, property tax, etc.) is based on the regional receipts mentioned above. "The distributions of these Value Added impacts (by component) amongst the types of tax are not industry specific. The distribution would be the same whether it was computers, tourism, tobacco, or forest products. Logically, forest products or mining would have a higher proportion of severance taxes compared to computers or tobacco, but that would not show up in the tax impact report. It is up to the analyst to make adjustments as necessary." http://support.implan.com/index.php?option=com_content&view=article&id=419:419&catid=237:237 You can see TOPI percentages of Output by industry by navigating to Social Accounts > Balance Sheets > View By: Industry Balance Sheets > Value Added tab. Regards, IMPLAN Staff
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