Taxable sales plummet in 2015
By Neal A. Shipman
Farmer Editor
After seeing an all-time record being set in taxable sales and purchases in North Dakota in 2014, those figures took a big nose dive in 2015 according to recent data from the North Dakota Tax Department. The state’s tremendous growth in sales was fueled in a large part by the rapid development of the oil and gas industry in western North Dakota.
But with the drop of oil prices into the $30 to $40 per barrel range for much of 2015, drilling activity slowed from its previous breakneck pace. And the impacts of the slowdown in the state’s oil patch has reverberated across the state’s economy.
State taxable sales and purchases during calendar year 2015 totaled $22.9 billion, a decrease of nearly 19 percent from the $28.2 billion total in 2014, according to Ryan Rauschenberger, state tax commissioner.
“We experienced an all-time taxable sales and purchases high for North Dakota in 2014,” stated Rauschenberger. “Despite falling below that peak, 2015 taxable sales and purchases have still grown 146 percent from where they were just one decade ago. Even with 17.5 percent inflation during that timeframe, the exceptional rate of real growth in taxable sales and purchases is more than 128 percent for the last decade.”
And nowhere was the impact of lower energy prices felt more than in the oil-producing counties of western North Dakota that saw a decline in taxable sales from 2014 to 2015 of upward to 40 percent.
Williams County saw its taxable sales decline nearly 38 percent from its record high of $3.826 billion in 2014 to $2.373 billion in 2015.
For Watford City and McKenzie County, which remains in the epicenter of the oil and natural gas development, taxable sales and purchases fell by nearly 27 percent.
For the calendar year of 2015, Watford City’s taxable sales and purchases fell 37.34 percent from a record $300,352,772 in 2014 to $218,228,334 in 2015. McKenzie County’s sales decline mirrored that of its largest city with a 26.45 percent decline. In 2015, the county had taxable sales and purchases of $265,219,713 compared to $360,608,310 in 2014.
Statewide, five of the 15 major industry sectors saw growth from 2014 to 2015. Most notable among those showing increases were the utilities and information industries sectors with increases of 21.2 and 5.17 percent, respectively.
“The mining and oil extraction and wholesale trade sectors saw the highest percent decreases from 2014 to 2015,” Rauschenberger added. “Both of those sector decreases are tied to low commodity prices, clearly impacting some of North Dakota’s major industries.”
In 2015, only eight of the state’s 53 counties showed a growth in taxable sales and purchases, while only 55 of the state’s 200 largest cities showed a positive gain in sales this past year.