State sales tax down nearly 18 percent

Nevada’s streak of double-digit drops in taxable sales continues, according to a Friday report from the Nevada Department of Taxation.

Companies in the Silver State rang up $3.2 billion in taxable sales in April, a 17.9 percent drop compared with the $3.9 billion they tallied in April 2008, the department’s numbers showed.

Taxable sales in Clark County declined 17.1 percent year-over-year in April, falling from $2.9 billion to $2.4 billion.

It’s the sixth consecutive month of double-digit declines in the state’s taxable sales. Sales have stumbled every month for more than two years, but until November, the drops hovered between roughly 4 percent and 6 percent. Since the fall, taxable sales have dipped 11 percent or more every month, peaking at an 18.9 percent drop in February.
Analysts have blamed the steeper losses to extended pain in the housing market and faltering visitor volume.

Especially hard-hit in April were construction-industry sales, which plummeted 32.2 percent, and transactions among dealers of cars and car parts, which dropped 30.4 percent. Wholesalers of durable goods such as big appliances saw sales fall 31.1 percent in April, while furniture retailers experienced a 43 percent decline in sales.

Sales at Topline Furniture on Maryland Parkway were off about 50 percent year-over-year in the spring, said Tom, a store manager who declined to give his last name.

“Furniture is more of a luxury when times are tougher,” Tom said. “You don’t need furniture to get you to and from work. You don’t need to eat furniture.”

The latest numbers point to continued fiscal travails for state-supported agencies related to education and prisons, two key functions that sales and use taxes support.

Revenue collections from sales and use taxes came to $240.6 million in April, a 16.6 percent drop compared with April 2008. In the first 10 months of fiscal 2009, which began July 1, revenue collections were down 11.7 percent compared with the same period in fiscal 2008.

Also in the first 10 months of fiscal 2009, the general-fund share of sales and use taxes came in 0.13 percent, or $1.1 million, below projections of the Economic Forum, a nonpartisan group that forecasts collections for state-budgeting purposes.

Gov. Jim Gibbons said in a statement that slumping collections demonstrate sustained economic troubles.

“The lingering effects of the slow housing market, volatility in the stock market and overall sluggish economy are prevalent in our state and revenue collections continue to decline accordingly,” he stated. “I am continuing my efforts to bring more tourists and jobs to Nevada to stop the decline in business activity and bolster consumer confidence.

We must work to prepare Nevada for the economic recovery that will eventually come.”

Even sin taxes couldn’t prop up sales numbers.

Excise taxes dropped 13.65 percent, or $15.3 million, year-over-year in April. Liquor taxes finished the month 4.8 percent, or $1.9 million, below expectations, and cigarette taxes missed forecasts by 0.35 percent, or $347,000. Collections of the live-entertainment tax fell short of projections by 1.3 percent, or $775,274.

Some sectors enjoyed big sales gains in April.

Broadcasting sales grew 137.7 percent. For companies in heavy construction and civil engineering, transactions rose 20.9 percent. The company-management field improved its sales by 30.6 percent. Utilities upped sales 7.3 percent, and the telecommunications industry boosted sales by 4.5 percent.

Among Nevada’s 17 counties, just three — Esmeralda, Lander and Mineral — posted higher sales and use taxes year-over-year in April. Esmeralda and Lander counties contain substantial mining operations, and Mineral County claims one of the world’s largest military-ammunition depots.

Sales in Washoe County, which houses Reno, fell 22.7 percent.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.