January 13, 2010

County’s taxable sales up 10%

By Neal A. Shipman
Farmer Editor

McKenzie County’s taxable sales and purchases in the third quarter of 2009 continued to show slow and steady growth according to a recent report by North Dakota Tax Commissioner Cory Fong.
During the third quarter, which includes the months of July, August and September, the county’s taxable sales and purchases were up 10 percent in contrast to a 10 percent statewide decline.
McKenzie County’s taxable sales and purchases in the third quarter of 2009 totalled $14,511,680 compared to $13,136,551 during the same three month period in 2008.
Watford City’s taxable sales and purchases during the third quarter of 2009 were up 9.43 percent from the same period in 2008. During the three month period from July through September of 2009, Watford City had taxable sales and purchases of $13,034,885 compared to $11,978,928 during the same period in 2008.
Statewide, according to Fong, taxable sales and purchases reflected a decrease of 10.7 percent, or $368.5 million, compared to the same quarter in 2008.
“Our state experienced a record-setting year in 2008 for taxable sales and purchases in North Dakota. This level of growth was not sustainable,” said Fong. “However, comparing the 2009 report to 2007, you will see that spending levels are right on track, underscoring that North Dakota’s taxable sales and purchases have remained on a steady growth pattern for quite some time.”
Compared to the third quarter of 2007, the 2009 report shows growth of 14.1 percent or $379.8 million over the two-year period.
A significant change occurred in this quarter relative to the exemption from sales tax of natural gas used for heating and industrial purposes. Effective July 1, 2009, all natural gas sold in the state became exempt from sales and use taxes. This change in the taxable base accounted for one-third of the overall drop in sales from the third quarter of 2008, when natural gas was subject to a one percent statewide sales tax.
“Although it appears that sales were reduced, in actuality our citizens, business people, ag producers and fuel suppliers alike will all benefit from this exemption, making household and business heating costs less burdensome,” Fong said.
In this report, retail trade, the sector generally looked to as a measure of the economy, was down less than one percent, 0.9 percent, when compared to the same quarter in 2008.  Comparing the retail trade sector to the third quarter of 2007, it grew 6.9 percent. Inflation during the third quarter of 2009 was actually negative, indicating that prices – like retail sales – were essentially flat.
“Even though we hear reports of weak retail sales at the national level during the all-important Christmas shopping season,” said Fong, “we look forward to seeing the final numbers for North Dakota’s retail sector in the fourth quarter of 2009 on into 2010 with a level of cautious optimism.”
“This report, along with reports of the past several years, supports the notion that North Dakota’s diversified economy has helped us weather this economic crisis very well,” said Fong. “And, while North Dakota hasn’t been completely insulated from the national recession, the challenge we face going forward is to remain focused on putting in place the kinds of initiatives that will continue to foster our healthy and productive business climate and sustain our state’s strong economy.”
Of the 50 largest cities, the biggest percentage increases for the third quarter of 2009 were: Crosby, up 42.8 percent; Ellendale, up 40.4 percent; Cavalier, up 35.9 percent; Bowman, up 32.1 percent; and Washburn, up 29.6 percent.
Of the 50 largest cities, the biggest percentages of decrease during the third quarter of 2009 were: Williston, down 28.3 percent; Tioga, down 25 percent; Lisbon, down 10.1 percent; Lincoln, down 8.6 percent; and Casselton, down 7.9 percent.
Counties with the highest percentage increases were: Grant, up 39 percent; Divide, up 37.5 percent; Bowman, up 33.9 percent; Oliver, up 32.4 percent; and Traill, up 24.1 percent. 
The counties with the biggest percentage decreases were: Burke, down 70.1 percent; Stark, down 37.5 percent; Williams, down 27.6 percent; Dunn, down 22 percent; and Benson, down 21.7 percent.