Stronger consumer spending drives surge in local taxable sales

Higher consumer spending spurred a strong spike in local taxable sales in March, a state agency said Thursday.

The state Taxation Department reported that spending in Clark County surged year over year in March by 12.1 percent, to $3.34 billion.

That’s the biggest year-to-year gain since August 2005, said Brian Gordon, a principal in local research firm Applied Analysis.

It was also well above the annual statewide gain of 7.9 percent. Taxable sales across Nevada totaled $4.43 billion in March.

Three categories by themselves contributed to nearly two-thirds of the county’s $361.1 million spending increase.

Dealers of cars and car parts saw sales grow $30.2 million, or 9.2 percent, to $357.2 million. Bars and restaurants — the biggest spending sector, at 26.5 percent of the total — contributed an additional $86.5 million, the result of a 10.8 percent jump to $884.9 million. Finally, the miscellaneous store retailers category surged 158.3 percent, adding $86.9 million for a total of $141.7 million. Miscellaneous retailers include florists, used-merchandise stores and pet-supply shops, among other stores. The category does not include retailers of clothes, furniture, building equipment, garden supplies or appliances and electronics, all of which are tracked separately.

The latest numbers cap a strong half-year for local taxable sales, Gordon said. Three of the last seven months have brought double-digit percentage gains, including 10.4 percent in February.

As in March, consumer-centric sectors such as car dealers and restaurants have been driving improvements. Visitor volume is at all-time highs, Gordon noted. Plus, locals have more home equity and are more willing to spend as they feel better about their financial prospects. As they’ve come out of the recession, locals also seem to have shifted their spending, staying soft on gambling and moving instead toward retail purchases, he said.

Not all sectors advanced in March. Despite an ongoing building boom on the Strip, countywide construction spending dipped 3.5 percent year over year, to $48.6 million.

Blame simple project timing, Gordon said. Some big investments — including The Linq and The Cromwell — have wrapped up, while others, such as MGM Resorts International’s 20,000-seat arena, have yet to ramp up. New-home construction has dipped as well, as more affordable resale homes have flooded the market.

Taxable sales are important not only as an economic indicator, but for the revenue they provide the state. Gross revenue collections from sales and use taxes, which help fund prisons and schools, came in at $344.7 million in March, up 7.6 percent from a year earlier. The General Fund share of $86.1 million was a 6.9 percent increase when measured against March 2013.

But the General Fund portion of sales and use taxes was $9.4 million, or 1.3 percent, below forecasts of the Economic Forum, a nonpartisan group that projects revenue for state budgeting.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.