Cars for sale contrasting with traffic on South Carson Street on Jan. 22, 2025.
Photo by Scott Neuffer.
Though difficult to pin to one cause, a decrease in taxable sales and related revenues coming into the city’s General Fund has Carson City leaders planning proactively for the next budget cycle.
“The city will be going over our preliminary budget projections (Feb. 20), which includes the property tax rate for (fiscal year 2026), projected sales tax figures, anticipated bargaining unit provisions, PERS increases, and any increase we are projecting in workers comp, insurance, etc.,” Carson City Chief Financial Officer Sheri Russell-Benabou said in an email.
Russell-Benabou said the stream of consolidated taxes known as C-tax “is the largest and most volatile revenue of the Carson City General Fund.” It includes certain sales taxes and excise taxes on liquor and cigarettes as well as the government services tax collected at the DMV and the real property transfer tax.
“Carson City consolidated taxes are down 1.96 percent for (July through October) compared to the same months in 2023,” Russell-Benabou said. “As these numbers are just through Oct. 31, it isn't known if the decline was due to the uncertainty surrounding the election.”
The city’s fiscal year runs July 1 through June 30. The recent dip in C-tax follows a rise in the last fiscal year. Russell-Benabou said FY24 saw C-tax revenue of $44,664,009, or a 7.43 percent increase in consolidated taxes from the prior year.
“The increase was not anticipated to be this high. During FY25 budget preparations, the city estimated FY24 consolidated taxes at $43,238,686, and the city budgeted a 2 percent increase for FY25, which amounted to $44,103,460. Therefore, the city actually budgeted a 1.25 percent reduction in consolidated taxes for FY25,” she said.
Russell-Benabou has emphasized the city budgets conservatively, taking note of downward trends. While C-tax revenue encompasses several taxes, the Nevada Department of Taxation provides monthly taxable sales reports for counties across the state. Because the department was implementing a new system last year, September data was the latest available for review.
The September report shows taxable sales in Carson City dropping by 1.3 percent in the first three months of the current fiscal year compared to the same time the prior year — from approximately $445 million in taxable sales to $439.4 million.
The city’s biggest category, motor vehicle and parts dealers, was up .7 percent in September but down 3.4 percent fiscal year to date, from $112.6 million to $108.8 million.
Building material and garden equipment and supplies, another big category, dropped 11.9 percent fiscal year to date, from roughly $65 million in taxable sales to about $57.3 million. In the same time frame, general merchandise stores saw a drop of 1.2 percent from $46.5 million to $45.9 million. Food services and drinking places also decreased 2.3 percent from $38.9 million to near $38 million flat.
One category that saw a 13.1 increase in the first three months of the fiscal year was merchant wholesalers of durable goods, rising from $38.7 million to $43.8 million in taxable sales. Nonstore retailers also grew 9.4 percent in the same time frame, from $24.1 million to $26.4 million in taxable sales.
Asked if nonstore retailers included online marketplaces like Amazon, Patricia Olmstead, public information officer for the Nevada Department of Taxation, said: “While the department may not disclose Amazon’s designated NAICS code due to confidentiality restrictions as set forth in NRS 360.255, NAICS category of 454 encompasses subsectors of electronic shopping, mail house orders (4541), vending machine operators (4542) and direct selling establishments (4543).”
More about the different categories of the North American Industry Classification System (NAICS) can be found at the U.S. Bureau of Labor Statistics: bls.gov/iag/tgs/iag_index_naics.htm.
The Nevada Department of Taxation did say that cannabis taxable sales fall under the miscellaneous retailer category along with florists, office supplies/stationery, used merchandise and other miscellaneous stores. That category in Carson saw a 5.1 decrease in the first three months of the fiscal year, from $10.7 million down to $10.1 million in taxable sales. However, the report wouldn’t have accounted for the second RISE dispensary that opened off Highway 50 East in November.
“Of course, there’s always the talk about the unsure economy as it related to the elections/politics,” said Carson City Chamber of Commerce Executive Director Ronni Hannaman.
Hannaman said a dip in taxable sales could mean spending priorities have changed but added: “The U.S. Chamber of Commerce is bullish on retail trade as is Nevada’s governor.”
In the State of the State speech delivered Jan. 15, Gov. Joe Lombardo, a Republican, highlighted economic development as a priority.
“Our state is at a pivotal moment emerging from the challenges of recent years and poised to reshape its economic future,” the speech says. “To foster growth, we are rethinking economic development to focus on strategies that directly benefit businesses, workers, and families already established in our state.”
Modernizing incentives, tax credits for child care facilities and investments in infrastructure were mentioned in the speech as ways to spur the state’s economy, although Democrats, holding majorities in the Nevada Assembly and Senate, wasted no time critiquing particulars of the governor’s proposed budget.
Hannaman could see the upside of lawmakers of all stripes converging on the capital city:
“The only thing I could add is that businesses overall will get a nice winter reprieve when the Legislature officially convenes on Feb. 3, bringing in not only the legislators and staff, but all those who lobby and otherwise have interest in the goings on in Carson City during this time.”