Taxable Retail Sales
Description:
Retail sales measure economic activity in one segment of the economy and thus serve as an indicator of economic health. In addition, the sales tax is an important source of revenue to Arizona’s state and local governments.
Only those retail categories subject to the state’s transaction privilege (general sales) tax are included in the retail sales data produced by the Arizona Department of Revenue. For example, sales of food items at grocery stores that are not taxed by the state are not included. Directly comparable national data are not available.
The data presented on Arizona Indicators include the “retail” classification of the sales tax and the restaurant and bar classification, with the total of these two components also displayed. Monthly data, adjusted for inflation using the national consumer price index, are presented for the last five-to-six years. The year-over-year percent change and the seasonally adjusted dollars are displayed. Annual retail sales data for Arizona are expressed per $1,000 of personal income in order to adjust for inflation and the growth of the state over time. The data begin in 1984, with annual percent changes also provided.
Data Source:
Arizona Department of Revenue; the data are not available online. Monthly data for Arizona are available approximately two months after the sales were made.
The Consumer Price Index is released monthly by the U.S. Department of Labor, Bureau of Labor Statistics, two-to-three weeks after the end of each month: http://www.bls.gov/cpi/.
Annual personal income for the state is available in April with revised data reported in September. The source is the U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/spi/default.cfm?selTable=summary.
Data Quality Comments:
Rather than an economic series, the retail sales data from the Arizona Department of Revenue represent an accounting series in which reporting errors are not corrected. Retailers sometimes report late and multi-establishment retailers sometimes misreport sales by county. An adjustment in the retail category was made in April 2010 and April 2011 due to very substantial changes in reporting by businesses.
The county data are not presented on Arizona Indicators because of their unreliability. While seasonally adjusted data are provided on Arizona Indicators, significant monthly fluctuations preclude these data from being used to calculate a month-to-month change. Instead, the emphasis is on comparing one month’s data to the figures for the same month in the prior year.
Retail Sales in Arizona, Inflation-Adjusted Year-Over-Year Percent Change
Visualization Notes:
Adjusted for inflation but not for population growth or economic growth, sales in the retail classification rose at double-digit percentage rates during 2005 and early 2006 in Arizona, but fell at double-digit rates from late 2008 through much of 2009. The year-over-year percent change remained negative through August 2010 before finally turning positive for the first time in more than three years. During the first five months of 2011, year-over-year inflation-adjusted growth averaged 8 percent; in the next five months, the year-over-year gain averaged 4.2 percent; in the most recent three months through January 2012, which includes the largest sales month of the year, inflation-adjusted retail sales were only 1.5 percent higher than in the prior year.
Retail Sales in Arizona, Seasonally Adjusted and Inflation-Adjusted
Visualization Notes:
From early 2007 through the middle of 2009, the volume of sales in the retail classification in Arizona decreased very considerably—even before adjusting for population growth or economic growth. The low point was reached in January 2010, with the inflation-adjusted total down 31 percent from the April 2007 peak. While the real January 2012 figure was 11 percent higher than the trough two years earlier, it still was 23 percent less than the prerecession peak.
Retail Sales Per $1,000 of Personal Income in Arizona
Visualization Notes:
Retail sales should increase at about the same pace as the overall economy, as measured by personal income. However, taxable retail sales in Arizona are generally limited to goods purchased in stores, while consumer spending continues to shift to untaxed services and to untaxed purchases made using the Internet. Therefore, sales per $1,000 of personal income in Arizona — in the retail classification and in the total, which includes restaurant and bar sales — have trended down since the earliest year of data in 1984. The rate of decrease varies with the economic cycle, with the largest declines during recessions. The figure sometimes rises during recoveries from recessions and at the peak of the economic cycle.
Retail Sales Per $1,000 of Personal Income in Arizona, Percent Change
Visualization Notes:
Taxable retail sales in Arizona are generally limited to goods purchased in stores, while consumer spending continues to shift to untaxed services and to untaxed purchases made using the Internet, causing retail sales per $1,000 of personal income in Arizona — in the retail classification and in the total, which includes restaurant and bar sales — to trend down. The very large decreases in the retail classification from 2007 through 2010 resulted from the worst recession experienced since the 1930s. Sales in the retail classification began to rebound in 2011.
Data Source
Arizona Department of Revenue; the data are not available online. Monthly data for Arizona are available approximately two months after the sales were made.
The Consumer Price Index is released monthly by the U.S. Department of Labor, Bureau of Labor Statistics, two-to-three weeks after the end of each month: http://www.bls.gov/cpi/.
Annual personal income for the state is available in April with revised data reported in September. The source is the U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/spi/default.cfm?selTable=summary.
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