Sales tax revenue takes fall

CARSON CITY -- A slowdown in new car sales and in the housing market helped contribute to an actual decrease in taxable sales in April over April 2006, the state Department of Taxation reported Thursday.

April taxable sales totaled $3.91 billion, a 0.7 percent decline over the $3.94 billion reported in April 2006.

In Clark County, taxable sales were off by an even steeper 1.4 percent. Clark County taxable sales totaled $2.9 billion in April.

Ten counties showed a decrease in taxable sales for April compared to April 2006: Carson City, Churchill, Clark, Douglas, Eureka, Humboldt, Lincoln, Lyon, Nye and Washoe.

For the fiscal year to date, however, statewide taxable sales remain 2.5 percent over the same period in 2006. Clark County is up 2.2 percent on the fiscal year, which ends Saturday.

The April decline was the first decrease in taxable sales since October of 2006, when the economic indicator dropped by 0.6 percent compared to October 2005. Before that, there had not been a decline in taxable sales in Nevada since June of 2002.

In a statement accompanying the report, Gov. Jim Gibbons said: "Nevada's economy is still healthy, but growing at a slower rate than we have become accustomed to. While consumer spending continues to remain strong, the housing market and reduction in motor vehicle sales has contributed to our slower growth. I am optimistic Nevada will maintain its stable tax base while displaying steady gains in our economy."

Dino DiCianno, executive director of the Tax Department, agreed that it is auto sales and home sales that are the main drivers in the slowdown in taxable sales growth.

"The difficulty is trying to figure out what is going to happen with housing sales," he said. "Nationwide they have not been good. It would be difficult for me to say when it will turn around."

Gross revenue collections from sales and use taxes also declined in April, by 3.13 percent compared to April 2006. The revenue totaled $295 million in April.

Compared to the May 1 projection made by the Economic Forum, the general fund share of the sales and use taxes is 1.37 percent, or $13.8 million, below the forecast for the 2006-2007 fiscal year.

For excise taxes, the April collection of $18.5 million is an increase of 0.37 percent compared to April 2006.

Compared to the Economic Forum's projections, fiscal year-to-date cigarette taxes are 2.26 percent, or $2.6 million, below projections. The liquor tax is 5.17 percent, or $2 million, above projections.