Taxable sales and purchases grow slower

By Tu-Uyen Tran

May 10, 2010 at 10:58 AM

After a slight expansion in 2008, northeastern North Dakota's sales tax base grew much slower last year, according to data released Monday by the state Tax Department.

For the 15 counties in this corner of the state, total taxable sales and purchases, adjusted for inflation, grew from $1.5 billion in 2007 to $1.57 billion in 2008 and then to $1.58 billion in 2009.

That's growth of 5.9 percent in the first two years and then a growth of 0.6 percent in the past two years.

Grand Forks County, the regional hub, saw its sales tax base stay almost the same, changing from $1.01 billion in 2007, to $1.02 billion in 2008, to $1.01 billion in 2009.

That's up 1 percent and then down 0.6 percent.

Because the county's sales tax base is about two-thirds of the northeastern region's tax base, the stagnant growth of the former has dampened the apparent growth of the rest of the region.

Individually, surrounding counties have seen a boom in the high single to low double digits. Griggs County's sales tax base, for example, grew 21.7 percent from 2007 to 2008 and 12.8 percent from 2008 to 2009. But it accounts for only 1 percent of the regional tax base.

"Taxable sales" is defined by the tax department as the total amount on taxable goods -- food, for example, is not taxable -- where businesses making the sale pass sales taxes on to the state. "Taxable purchases" is the total amount of taxable goods, where businesses purchase the goods for their own use and have not paid sales taxes, in which case they would have to pay a use tax to the state. Together, the two make up the "tax base."

State totals
The state as a whole has seen a dramatic up-and-down from 2007 to 2009.

Total taxable sales and purchases rocketed from $10.7 billion in 2007 to $12.5 billion in 2008, only to drop to $11.9 billion in 2009. That's up 17 percent and then down 4.7 percent.

Tax Commissioner Cory Fong said in a press release that the state "experienced a record-setting year for taxable sales and purchases in 2008, and that level of growth was not sustainable."

In 2008, the state benefited from strong growth in the oil fields and farmlands, Fong said a year ago. But in 2009, farmers suffered from storms, flooding, higher operating costs and lower commodity prices, he said Monday.

Compared with its peers in North Dakota, Grand Forks County experienced fairly modest growth.

Cass County grew 1.7 percent and then shrunk 2.8 percent to $2.46 billion in 2009. Burleigh County grew 1.9 percent and then shrunk 0.5 percent to $1.31 billion in 2009. Ward County, the regional hub for the oil country in the northwest corner of the state, grew 10.2 percent and then 8.3 percent to $967.7 million in 2009.

Below is a listing of what happened to other northeastern North Dakota counties. The first number is the 2009 sales tax base; the second two numbers are changes from 2007 to 2008 and from 2008 to 2009:

- Benson: $17 million; up 3.53 percent; up 5.1 percent.

- Cavalier: $31.6 million; up 15.2 percent; down 3.2 percent.

- Eddy: $9.8 million; up 9.2 percent; up 5.4 percent.

- Foster: $50.8 million; up 18.6 percent; up 11.3 percent.

- Grand Forks: $1 billion; up 1 percent; down 0.6 percent.

- Griggs: $19 million; up 21.7 percent; up 12.8 percent.

- Nelson: $15 million; up 25.6 percent; up 6.3 percent.

- Pembina: $59.3 million; up 4.6 percent; up 9.6 percent.

- Pierce: $47.7 million; up 18.9 percent; up 14.9 percent.

- Ramsey: $147 million; up 9.2 percent; up 3.5 percent.

- Rolette: $27.4 million; up 3.7 percent; up 6.5 percent.

- Steele: $10.1 million; up 26.6 percent; up 3.4 percent.