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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  701.328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free
FOR IMMEDIATE RELEASE Contact: Beth Boustead, Public Information Specialist, 701.328.3039
Wednesday, January 6, 2010

Fong: 3rd Quarter Taxable Sales & Purchases Slowed but Still on Track

BISMARCK, N.D. – Tax Commissioner Cory Fong today issued a report that reflects a slowing in taxable sales and purchases for North Dakota during the third quarter, 2009, which includes the months of July, August, and September. While the report reflects a decrease of 10.7 percent, or $368.5 million, compared to the same quarter in 2008, taxable sales and purchases are up over 2007 statistics.

“Our state experienced a record-setting year in 2008 for taxable sales and purchases in North Dakota. This level of growth was not sustainable,” said Fong. “However, comparing the 2009 report to 2007, you will see that spending levels are right on track, underscoring that North Dakota’s taxable sales and purchases have remained on a steady growth pattern for quite some time.”

Compared to the third quarter 2007, the 2009 report shows growth of 14.1 percent or $379.8 million over the two-year period. A significant change occurred in this quarter relative to the exemption from sales tax of natural gas used for heating and industrial purposes. Effective July 1, 2009, all natural gas sold in the state became exempt from sales and use taxes. This change in the taxable base accounted for one-third of the overall drop in sales from the third quarter of 2008, when natural gas was subject to a one percent statewide sales tax.

“Although it appears that sales were reduced, in actuality our citizens, business people, ag producers and fuel suppliers alike will all benefit from this exemption, making household and business heating costs less burdensome,” Fong said.

In this report, retail trade, the sector generally looked to as a measure of the economy, was down less than one percent, 0.9 percent, when compared to the same quarter in 2008. Comparing the retail trade sector to the third quarter 2007, it grew 6.9 percent. Inflation during the third quarter of 2009 was actually negative, indicating that prices – like retail sales – were essentially flat.

“Even though we hear reports of weak retail sales at the national level during the all-important Christmas shopping season,” said Fong, “we look forward to seeing the final numbers for North Dakota’s retail sector in the fourth quarter 2009 on into 2010 with a level of cautious optimism.”

Compared to third quarter 2008, the accommodation and food services sector had the largest growth in terms of dollars, growing $8.6 million, while the other services sector experienced the largest percentage of growth, rising by 15 percent. The third quarter gains reported in other sectors include: professional, scientific, technical and management services, up 6.4 percent; arts, entertainment and recreation, up 4.3 percent; information industries sector, up 2.3 percent. Sectors reporting a decline include: transportation and warehousing, down 69.8 percent; mining and oil extraction, down 45 percent; miscellaneous, down 18 percent; utilities, down 16.7 percent; wholesale trade, down 15 percent; educational, health care, and social services, down 8.2 percent; construction, down 6.8 percent; manufacturing, down 5.6 percent; financial, real estate, rental and leasing, down 2.8 percent; and retail trade, down 0.9 percent.

“This report, along with reports of the past several years, supports the notion that North Dakota’s diversified economy has helped us weather this economic crisis very well,” said Fong. “And, while North Dakota hasn’t been completely insulated from the national recession, the challenge we face going forward is to remain focused on putting in place the kinds of initiatives that will continue to foster our healthy and productive business climate and sustain our state’s strong economy.”

Of the 50 largest cities, the biggest percentage increases for third quarter of 2009 were: -Crosby, up 42.8 percent; Ellendale, up 40.4 percent; Cavalier, up 35.9 percent; Bowman, up 32.1 percent; and Washburn, up 29.6 percent.

Of the 50 largest cities, the biggest percentages of decrease during the third quarter 2009 were: Williston, down 28.3 percent; Tioga, down 25 percent; Lisbon, down 10.1 percent; Lincoln, down 8.6 percent; and Casselton, down 7.9 percent.

Counties with the highest percentage increases were: Grant, up 39 percent; Divide, up 37.5 percent; Bowman, up 33.9 percent; Oliver, up 32.4 percent; and Traill, up 24.1 percent.

The counties with the biggest percentage decreases were: Burke, down 70.1 percent; Stark, down 37.5 percent; Williams, down 27.6 percent; Dunn, down 22 percent; and Benson, down 21.7 percent.

  • Complete North Dakota Sales and Use Tax Statistical Reports from Third Quarter 2009 can be accessed on the web at: www.nd.gov/tax/salesanduse/pubs/reports/2009-3-stat-report.pdf. - (70kb pdf)
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  • Graph: North Dakota Taxable Sales & Purchases 3rd Quarter 2003 - 2009 - (43kb pdf)
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