Revenue Impacts | SCF Arizona | Economic Studies

Revenue Impacts

SCF Arizona Case Study: The Economic Impacts of Buying Locally

In addition to supporting jobs and income at related businesses in the area through multiplier effects, SCF Arizona also generates significant local tax revenues. The facility generates property, sales and insurance premium taxes through its own operations. It also indirectly supports additional revenues through employee spending and property ownership. All total, SCF Arizona generated approximately $35.7 million in direct and indirect revenues to the state, counties and local cities in 2009.

Direct Revenues

SCF Arizona directly pays about $1.4 million in local property taxes each year. In addition, they paid close to $10.5 million in state insurance premium taxes in 2009 (Figure 8). Finally, the company generates state and local sales tax revenues on their own purchases that are not included here.

Figure 8
**State And Local Revenue Impacts**
2009
	City and County Taxes
	Property	Sales	Sales	Personal Income	Insurance Premium
Direct Revenues	$1,423,310	na	na	na	$10,450,768
Indirect Revenues
Direct Employees	$832,599	$266,330	$552,388	$1,066,325	na
Other Supported Employment	$4,462,613	$4,472,815	$9,276,950	$2,765,054	na

Total	$6,718,521	$4,739,145	$9,829,338	$3,831,378	$10,450,768
Note: Information on direct sales taxes paid not available.

Figure 8
State And Local Revenue Impacts
2009

City and County Taxes

State Taxes

Property

Sales

Personal Income

Insurance Premium

Direct Revenues

$1,423,310

$10,450,768

Indirect Revenues

Direct Employees

$832,599

$266,330

$552,388

$1,066,325

Other Supported Employment

$4,462,613

$4,472,815

$9,276,950

$2,765,054

Total

$6,718,521

$4,739,145

$9,829,338

$3,831,378

$10,450,768

Note: Information on direct sales taxes paid not available.

Indirect Revenues

In addition to direct taxes paid by the company, SCF Arizona employees generate indirect revenues including property, sales and personal income taxes. Using the results from the economic impact analysis, it is possible to estimate these indirect tax impacts.

Direct and indirect employees generated an estimated $5.3 million in indirect property tax revenues in Arizona in 2009. Indirect property tax revenues were estimated using average assessed per service population (population + employment) in Arizona, times the annual supported population and indirect jobs, times the statewide average property tax rate.

Based on employee payroll at SCF Arizona and personal income for indirectly supported employees, the company supports approximately $14.6 million in sales tax revenues in 2009 to the state, counties and local cities. This estimate assumes that households spend approximately 28 percent of their wages on goods that are subject to sales tax, based on data from the Census Annual Consumer Expenditure Survey. Applying this assumption to the personal income of employees and applying an average local (city and county) sales tax rate of 2.7 percent yields state and local sales tax revenues from employee spending.

In terms of state personal income tax, direct and indirect employees generated approximately $3.8 million in revenues in 2009. State income tax revenues are calculated using average personal income tax liabilities for filers in the appropriate income ranges from the 2009 Annual Report for Arizona Department of Revenue, multiplied by the number of direct and indirect supported employees.

In total, SCF Arizona’s operations generate approximately $11.9 million per year in direct taxes (excluding sales tax) and $23.7 million each year in indirect state and local revenues.