October Taxable Sales Continue Year-Long Double-Digit Slump

(Sean Whaley/Nevada News Bureau) – Nevada’s statewide taxable sales continued to generate dismal numbers in October, plunging 17.8 percent compared to the same month in 2008, a report released today by the Department of Taxation shows.

Consumers purchased $3.1 billion worth of taxable goods in October, compared to $3.7 billion in October 2008. For the first four months of the fiscal year, taxable sales are off by 19.7 percent.

It was the 12th consecutive month of double-digit declines in the economic indicator.

The report did nothing to alleviate concerns about the health of the state budget and the likelihood that a special legislative session will be needed to deal with the drop in state tax revenues, which were off by $67 million prior to the release of the October numbers.

Sales and use tax collections are now $18 million below what was forecasted for the first four months of the 2010 fiscal year. Sales and use taxes make up a big share of the state general fund budget.

“The release of taxable sales and revenue collection data for the month of October continue to illustrate the effects of high unemployment rates, cautious consumer spending and an overall decline in business activity,” Gov. Jim Gibbons said. “My administration will continue our efforts to encourage increased tourism, promote business growth, expansion, and diversity within this state, and raise consumer confidence to better prepare Nevada for the future.”

Taxable sales were down 19 percent in Clark County and 10.5 percent in Washoe County and were down in 15 of the state’s 17 counties. Only Humboldt and Storey counties posted gains.

Of the major taxable sales categories, only clothing and accessories stores posted a positive number, up 4.2 percent over October 2008.

The single largest category, bars and restaurants, which in September had showed an increase, was down again in October by 8.9 percent.

Home furniture and furnishings were off by 19.3 percent, motor vehicle and parts dealers were down 14.1 percent and the construction industry classification was off by 39 percent.

Gibbons is expected to decide on whether to call a special session in late January, after the Economic Forum, a panel of private industry fiscal experts, weighs in on revenue forecasts for the remainder of the two years of the budget.

Gibbons has asked state agencies to submit by plans by early next month showing what budget cuts of 6 percent to 10 percent would mean to their programs and services.