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Thread: Estimating sales tax revenue for incoming businesses

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    moderator in moderation Suburb Repairman's avatar
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    Estimating sales tax revenue for incoming businesses

    Does anyone here know where I can find out how much a particular business generates in taxable sales? I'm helping our Finance Director with revenue estimates for a couple of new businesses set to open very early in the fiscal year. Specifically, I'm trying to find out about Tractor Supply Company and The Home Depot. I tried digging through their investor relations handbooks, but could not find an estimates of sales subject to state/local sales tax or an estimate of sales tax payments.

    I figure some of you that conduct economic impact studies might have some good resources for this kind of information.

    Thanks!

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    Cyburbian Masswich's avatar
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    Its easy in Massachusetts

    Quote Originally posted by Suburb Repairman
    Does anyone here know where I can find out how much a particular business generates in taxable sales? I'm helping our Finance Director with revenue estimates for a couple of new businesses set to open very early in the fiscal year. Specifically, I'm trying to find out about Tractor Supply Company and The Home Depot. I tried digging through their investor relations handbooks, but could not find an estimates of sales subject to state/local sales tax or an estimate of sales tax payments.

    I figure some of you that conduct economic impact studies might have some good resources for this kind of information.

    Thanks!
    Well around here the answer would be..... $0. Unless its a hotel there are no local sales taxes. All you get is additional property tax. And yet still communities want big box. Its interesting that this is true, when fiscal determinism would say that the interest in big boxes would be lower here than in, say, California.

    But what I would do if I worked somewhere else would be to estimate sales from square feet- I think there are some basic standards for sales that way.

  3. #3
    I know Wal-Mart and other big box stores like to keep their sales numbers top secret, but Home Depot has it listed: "...sales in each store averaging over $40 million..." http://www.homedepot.ca/escalate/sto...atic_storeopps

    Unlike Income Tax, the sales tax would not be listed in the financial reports. You just have to look at the total sales and do your guesstimates from there.

  4. #4
    Cyburbian mallen's avatar
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    We get this question pretty often and it really is difficult to answer because there are so many variables involved.

    Average retail sales per square foot generally range between $200 - $400 annually. Malls are different than strip centers; and both are different than a Walmart. That variation is the very reason why market research companies make so much money - they analyze your specific situation. They also keep their results tightly held.

    Having said that - gross sales are generally within the range noted above.

    FWIW, my community recently completed an impact study and we used $250 per square foot for retail sales.

  5. #5
    Cyburbian mallen's avatar
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    Hey,

    After quickly browsing the net I found this seemingly useful resource. http://www.bizstats.com/spf1.htm

    Based on their info, in 2003 a Home Depot generated $370 per square foot (just over $40 million per store).

    I don't know how credible this site is, but the info seems to correspond with my info in the post above (ie it is in the same general range).

    Good luck with your tractor sales

  6. #6
    Cyburbian Cardinal's avatar
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    Don't forget sales transfer! When any new store opens, a portion of the sales it will realize are sales whic hhave been transferred from other retailers already in the marketplace. Guessing how much is more art than science, and largely depends on the rate of population growth in the market. Ken Stone did a study of Home Depot in Missouri. The results showed that nearly all of the sales at a new store were transfered, nut like his Wal-Mart studies, this one focused on slow-growth rural places.

    That all said...

    A typical Lowe's does about $33 million. A typical Home Depot does about $40 million.
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    Member japrovo's avatar
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    Quote Originally posted by Cardinal
    Don't forget sales transfer! When any new store opens, a portion of the sales it will realize are sales whic hhave been transferred from other retailers already in the marketplace. Guessing how much is more art than science, and largely depends on the rate of population growth in the market.

    Cardinal,
    Aren't there some generic yardsticks for retail cachement areas that would be a first step in sorting out the cannibalization of sales by new entrants into a market? (x,000 people per big box, x00 people per dry cleaner, etc) If so, could someone post a referrence or link?

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