Newspaper article THE JOURNAL RECORD

Retail Sales Grow by Record $1.5 Billion

Newspaper article THE JOURNAL RECORD

Retail Sales Grow by Record $1.5 Billion

Article excerpt

Oklahoma retail sales subject to the state sales tax grew by a record $1.5 billion in the fiscal year ended June 30, and for the first time exceeded the total annual sales of fiscal 1982 _ the heart of the oil boom.

In its Aug. 31 "Oklahoma Revenue" bulletin, the Office of State Finance analyzed sales tax collections over a multi-year period.

For the fiscal year ended June 30, retail sales on which the state's 4.5 percent tax was levied totaled $23.3 billion, up $1.5 billion or 7.1 percent from the previous fiscal year, the report said. "It was the greatest one-year increase in the sales tax base in state history and a positive change from a disturbing trend of more than a decade of declines turning into slow growth."

Sales taxes are the second largest source of state revenue, behind income taxes. Last fiscal year marked the first time sales taxes topped $1 billion, producing $1.03 billion for a 7.9 percent increase above the prior fiscal year.

Retail sales tax revenue in the last fiscal year was up every month, compared with the same month of the prior year. Increases varied from 3.9 percent in September 1993 to 13.7 percent in May, the report said.

Putting the numbers in perspective, the finance office said while Oklahoma's sales tax base exceeds that of fiscal 1982 for the first time, the increase is only when measured in "nominal" dollars. "Retail sales subject to the tax were $22.5 billion in FY 1982 at the zenith of the oil boom," the report said. "The 1994 figure of $23.3 billion exceeded that by $799 million or 3.5 percent. However, if adjusted for inflation and stated in 1982 dollars, the FY 94 figure would have been only $15.1 billion, a decline of $7.4 billion or 32.9 percent in real dollars."

Put another way, the 7.1 percent retail sales increase obtained by comparing last fiscal year with the previous fiscal year was more than double the estimated inflation rate of 3.2 percent for that period as measured by the urban consumer price index.

Moreover, estimated personal income grew by 6.7 percent, and estimated gross state product by 7.5 percent, from 1993 to 1994. According to the finance office, this contrasted with trends of the past several years when growth in personal income and gross state product have far exceeded tax base growth. …

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