Sales Subject to Sales Tax - Documentation
The Center for Economic and Management Research, Price College of Business, The
University of Oklahoma uses city sales tax data to
estimate local sales of goods and services, (sales subject to sales tax) for
Oklahoma counties and selected cities. The Sales Subject to Sales Tax Series
(SST) provides a useful and timely means of analyzing fundamental trends in the
regional economies in Oklahoma.
The information contained in this report can be used in a variety of ways. The
historical information provides a picture of local economic performance.
Analysts can use it to examine city or county economic performance over time. It can also
be used to compare one city or county to another or to overall state sales
activities. This information is particularly valuable because of its timely
nature. Because there is only a two-month lag between the time city sales
taxes are collected and the time they are reported, the sales-subject-to-sales-tax
indicators offer a snapshot of economic conditions with a minimal lag in time.
Sales Subject to Sales Tax estimates are based on city sales tax data
provided by the Business Tax Division of the Oklahoma Tax Commission. Estimates
are released for each of Oklahoma's Counties and the 50 largest cities by month.
The series begins in January 1980.
The amount of sales is estimated by dividing sales tax collections by the city's
sales tax rate. For example, suppose a city raised $10,000 in sales tax
collections in a particular month. If the city's sales tax rate was 2.0 percent,
then the dollar value of the sales subject to city sales tax would have equaled
$500,000 during that month. It is important to note that sales that are not
subject to sales tax are not included in these totals. Also, auto sales, which
are not subject to the sales tax, are not included. Gasoline and motor fuels are
also not included.
Several issues should be considered when using the information presented in this
1) Since the city sales tax is applied to certain purchases by businesses,
the sales subject to sales tax estimates include some non-retail sales, that is,
some wholesale transactions.
2) The sales subject to sales tax values for a particular city reflect
what is occurring in that city only if they are used to estimate total sales in
a larger geographic area, the estimate will be understated. Again, there are two
reasons for this. One is that not all cities collect a sales tax, and the second
is that many sales are made outside a city's jurisdiction. Both factors will
lead to underestimating local area sales.
3) Caution should be exercised in interpreting changes in the series for any
particular area. A change in the series simply means that the level of
sales has changed. It does not necessarily imply changes in other economic
indicators. For example, sales may decline even though individuals in a city may
be earning as much as they were previously. They may just be growing more
cautious in their expenditures. However, this is the kind of situation that
bears watching because, in general, sales tend to fluctuate less than personal
4) It should also be noted that changes in the series can reflect changes in
regional spending patterns rather than a general deterioration in economic
conditions. For example, a new highway which makes it easier to shop in a larger
city may reduce local purchases even though income in the region remains the
Despite these qualifiers, the information presented in this database should be
useful to a variety of people interested in economic performance. The data are
timely, and, when used in conjunction with other economic indicators, they
provide an informative picture of local economic conditions.
For additional information about the Oklahoma Sales Subject to Sales Tax Series
Robert Dauffenbach, Director
Center for Economic and Management Research
Michael F. price College of Business
The University of Oklahoma
307 W. Brooks
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