Newspaper article THE JOURNAL RECORD

Growth Rate of State's Taxable Sales Falters

Newspaper article THE JOURNAL RECORD

Growth Rate of State's Taxable Sales Falters

Article excerpt

Journal Record Staff Reporter

The dollar value of retail sales in Oklahoma subject to the state sales tax has been losing ground in recent years, compared with other measuring sticks of economic growth, according to the Office of State Finance.

An article in the May 31 Oklahoma Revenue bulletin looked at taxable sales as a percentage of personal income and gross state product, and also at the revenue potential of the state's tax base. In Fiscal Year 1977, taxable sales were 53.4 percent of personal income. Fueled by the oil boom, that ratio grew to 61.5 percent in fiscal 1982 and returned to 53.2 percent the following year. The percentage plummeted to 39.7 percent in fiscal 1992 and 39.8 percent for the fiscal year that ended June 30, 1993. Taxable sales were 41 percent of Oklahoma Gross State Product in Fiscal Year 1977. The percentage was level for the next five years, then climbed to 46.4 percent in fiscal 1982 as the result of the oil boom and oil-related purchases, the article said.

Then in fiscal 1983, the percentage fell to 41.5 percent, the pre-boom level. It has continued to decline, reaching a 17-year low of 32.6 percent last fiscal year, which ended June 30. For every 1 percent of the sales tax, $95.4 million in revenue was produced in Fiscal Year 1977. The figure peaked at $218.5 million in fiscal 1982, then fell to $179 million in fiscal 1987, the article said.

Although each 1 percent produced $212.8 million in revenue for the fiscal year ended June 30, it was still lower than the fiscal 1982 peak because of erosion of the sales tax base. The article used the fiscal 1977 levels as a base and reported that Oklahoma taxable sales grew in tandem with personal income and gross state product through Fiscal Year 1981. In fiscal 1982, oil boom spending temporarily boosted taxable sales growth beyond personal income and gross state product. …

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