Nevada taxable sales up a bit

CARSON CITY -- In some rare good economic news for the state, taxable sales rose in April, though by a modest 0.3 percent, for the first gain since October.

Taxable sales totaled $3.92 billion in April compared with $3.91 billion in April 2007, according to the report released Monday by the state Department of Taxation.

Clark County taxable sales were up 0.2 percent in April, totaling $2.9 billion.

For the year to date, taxable sales total $39.9 billion, 2.2 percent lower than for the same period in the previous fiscal year.

The increase pretty much mirrors U.S. retail sales figures, which the Commerce Department is projecting will be up 1 percent in May because of a boost from the stimulus package that sent millions of dollars to U.S. taxpayers beginning in April.

The Commerce Department two weeks ago reported that retail sales were up 0.4 percent in April, also primarily because of the tax rebates.

Also like the national numbers, Nevada's taxable sales increase came despite a continuing slump in both auto sales and restaurant business.

Wayne Frediani, executive director of the Nevada Franchised Auto Dealers Association, said car dealers don't expect sales to improve before mid-2009.

"It's not just the price of gas, it's the home foreclosures, it's no access to credit and it's the uncertainty facing the overall economy," he said.

There is a shift by consumers to more fuel-efficient cars and hybrids, but it will take time for production of these vehicles to ramp up to meet the new demand, Frediani said.

"Auto sales over the next 12 months are going to be tough in Nevada and across the country," he said.

For state officials still reeling from $1.2 billion in cuts and other fixes to the two-year budget, the amount of sales tax collected from the taxable purchases in April was cause for some modest optimism.

Gov. Jim Gibbons, in remarks accompanying the report, said: "Nevada continues to realize the effects of a sluggish economy through the month of April for this fiscal year. Areas recording recent growth are commercial construction due to projects in Southern Nevada, accommodations representing tourist activity, as well as cautious consumer purchases within select categories. We will continue to be watchful in the coming months to see what impact all revenue collections will have on the state and local governments."

The state share of sales taxes totaled nearly $78 million in April, a decline of 0.4 percent. But based on Economic Forum projections made June 20, this was actually an improvement to the state's most recent financial analysis.

The forum projected that sales taxes would end up in the current fiscal year down by 3.6 percent over the previous year. So the smaller decline was good news.

For the fiscal year through April, sales tax collections total $801 million, a 3.3 percent decline over the prior fiscal year, but still slightly better than the forum's projections of a 3.6 percent decline.

Two months of collections remain to be reported for the 2007-08 fiscal year, which ended Monday.

It was the forum's projections that forced the Legislature on Friday in a rare one-day special session to make $275 million in further reductions to state spending.

The biggest increases in taxable sales in April were seen in the categories of electronics and appliance stores, up 45 percent, merchant wholesalers-durable goods, up 7.9 percent, accommodations, up 16 percent, specialty trade contractors, up 17.5 percent, and construction of buildings, up 80 percent.

The state's major taxable sales categories were mixed in April.

Motor vehicles and parts dealers were down 20.3 percent over April 2007; general merchandise stores were down 1.5 percent; home furniture and furnishings were down 13.1 percent, and bars and restaurants were down 2.3 percent.

But clothing and accessories stores were up 5.3 percent and food and beverage stores were up 3.6 percent.

Nine of Nevada's 17 counties recorded a decrease in taxable sales for April 2008 compared to April 2007; Carson City, Douglas, Elko, Lander, Mineral, Nye, Pershing, Storey and Washoe counties.

Contact reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.