Double-digit jumps in diverse categories drive taxable sales higher

Clark County taxable sales rose
9.3 percent from the same month last year, while Washoe County posted a 14.9 percent increase. Of Nevada’s 17 counties, only Lincoln County showed a decrease.

The construction industry classification showed the largest increase at 44.5 percent, though that is based on low comparison numbers, said Steve Miller, chairman of the economics department at University of Nevada, Las Vegas.

“We know construction has been a big loser as far as taxable sales, but we have been hearing construction is at the bottom and may be picking up a little,” Miller said.

Much of the sudden growth in construction sales is associated with prices for gold and other metals and the resulting expansion of mines in Northern Nevada, he said.

The uptick in Clark County taxable sales comes on the heels of year-over-year growth in visitor volume, hotel occupancy and gaming revenue, Miller said.

Sales tax categories that saw large increases included food services and drinking places — up 11.7 percent — motor vehicle and parts dealers — up 12.9 percent — and clothing and accessories stores — up 12.2 percent.

Utilities, a relatively small sector in taxable sales, were up nearly 260 percent, to $91 million in October compared with $25.3 million in the same month a year ago.

That could be from nonrecurring equipment purchases by a company such as NV Energy, said Brian Gordon, principal of Applied Analysis business advisory firm in Las Vegas. Taxable sales figures can be somewhat volatile from month to month because of one-time expenditures, he said.

Early reports on holiday spending trends were positive, so Las Vegas might expect further gains in sales taxes going forward, UNLV’s Miller added.

The only downside to that is the sharp increase in online sales, which are not taxed and put brick-and-mortar retailers at a competitive disadvantage, the economist warned.

Tyler Corder, chief financial officer of Las Vegas-based Findlay Automotive Group, said new vehicle sales are up about 15 percent from last year, which was in turn up from 2009.

More available credit and low interest rates have helped spur sales, he said. Also, there is pent-up demand for new cars.

“People stayed out of the market in 2008 and 2009, and now their cars are getting old. They want new innovations like the iPod plug-in and back-up cameras,” Corder said.

The general fund portion of Nevada’s sales and use taxes collected in October amounted to $68.5 million, a 9.9 percent increase from the same month a year ago, the department reported. Compared with May economic forum projections, the general fund portion is up about
2 percent, $5.5 million above the forecast for fiscal 2012 through October.

The department reports excise tax collections of $28.5 million for October, an increase of 14.3 percent from a year ago. Cigarette tax revenues are up 1.36 percent, $1.1 million above projections; liquor taxes are up 0.5 percent, or $196,000; and live entertainment taxes are up 5.17 percent, or $1.2 million.

Despite the positive news, Southern Nevada’s economy still faces challenges such as high unemployment and people losing their homes to foreclosure, Miller said.

“There’s a lot of pain still in the community,” he said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.