August tax numbers show effect of Wal-Mart move
Carson City and Douglas County officials are now able to measure the effects of Wal-Mart’s relocation from Carson City to Douglas County in August.
The latest retail sales numbers, released this week, show car buyers in Carson City spent more than $27 million in August, saving the city from what could have been a dramatic loss in revenue.
Spurred by enticing incentives, aggressive automotive sales single-handedly kept the Carson City afloat after it lost Wal-Mart in August, said city Finance Director David Heath.
The increase represented a 20 percent bump over last year’s numbers. Without it, the city would have lost 10 percent of overall sales, Heath said.
Shoppers in Douglas County, on the other hand, spent $6.7 million in general merchandise stores, which was $4.85 million more than they spent in the county during the same month last year. As a result, the county recorded a 10.1 percent increase in overall taxable sales spending.
A dramatic drop in merchandise sales numbers in Carson City is the first indication of how much the city stands to lose in sales tax revenue as a result of the loss of Wal-Mart to Douglas County, Heath said.
Wal-Mart left Carson City to open its new mega-store in Douglas County on Aug. 12.
Carson City lost $3.03 million in general merchandise sales in August, a 21 percent drop, even though the store was still within city limits part of the month.
The city lost also lost more than $780,000 in building materials sales.
The numbers are not encouraging for Carson City, Heath said. If the current incentives for buying autos begin to disappear, so will city tax revenue, he said.
Currently, 43 cents of every dollar the city receives in tax revenue comes from sales tax. The revenue pays for city operations from police and fire to street maintenance. The city sales tax rate is 7 percent.
Automotive sales “is the biggest category we’ve got,” Heath said. “We can’t afford to lose those guys.”
September figures should reflect a more substantial drop in sales as it will be the first full month for Wal-Mart’s new Douglas County store.
“Look out for September,” Heath warned.
Douglas County is encouraged by the growth as it continues to market the land near the junction of highways 50 and 395 to retail developers.
“It’s encouraging in terms of economic development for Douglas County,” said Bob Nunes, county director of community development. “It’s a big boost.”
The blossoming county is still on the state “welfare” system, as it receives a portion of its tax revenue from larger counties, including Carson City, which contribute to a pot of money at the state level. The pot of money is distributed to smaller counties which don’t take in enough retail sales to pay for basic services.
In order to become a contributing county instead of a county that receives money from other counties, Douglas County would have to almost double what it currently takes in, according to Michael Brown, assistant director of county administrative services.
The boost in taxable sales income does help though, Brown said. It directly provides more income for schools, basic services and parks and recreation, senior, airport and library services.
General merchandise: $11.2 million, a 21.3 percent loss from August 2001
Automotive dealers & gasoline: $27.8 million, a 20.3 percent gain from August 2001
Total sales: $78.3 million, an overall 2.7 percent gain from August 2001
General merchandise: $6.7 million, a 260 percent gain from August 2001
Total sales: $58.6 million, a 10.3 percent gain from August 2001
A 7 percent tax is imposed on sales.
— Source: Nevada Department of Taxation