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Kenmare bucks taxable sales trend...

North Dakota Tax Commissioner Ryan Rauschenberger recently reported the state took a big hit on third quarter taxable sales and purchases.

12/29/20 (Tue)

Shopping local helps . . . Kenmare’s sales tax collection saw an increase of 11 percent, while statewide taxable sales dropped 19.5 percent during July, August, and September. Part of the reason for the favorable trend at Kenmare and a few other smaller cities may have been an increase in local shopping. Because of the pandemic, many people have been reluctant to travel out of town to shop for items  that are readily available from stores in their own hometown.

By Marvin Baker

North Dakota Tax Commissioner Ryan Rauschenberger recently reported the state took a big hit on third quarter taxable sales and purchases.

Statewide, we dropped 19.5 percent, compared to a 4 percent increase in the third quarter of 2019.

When you break it down to county and community, every major city except Wahpeton showed declines while communities in the oil patch were hit especially hard.

In fact, Williams and Mountrail counties both saw 50 percent reduction in taxable sales and purchases over 2019, while Dunn and Burke had 48 and 47 percent reductions.

Cities in the oil patch suffered the same fate. Tioga and Watford City both saw 53 percent declines, while Williston’s drop was 50 percent, New Town’s decline was 48 percent and Stanley and Dickinson both saw a 32 percent reduction.

Williston has now fallen well behind Bismarck, Minot and Grand Forks and is more in line with Dickinson’s statistics.

During the height of the oil boom, taxable sales and purchases for several consecutive quarters in Williston challenged that of Fargo, but never did catch Fargo, which has three times the population as Williston had during the oil boom.

Even Cass County and the city of Fargo, which has seen slow, but consistent growth for several years, had its first decline. Cass County was off 2.55 percent and Fargo’s taxable sales and purchases were down 4 percent.

“Similar to the decline in taxable sales and purchases in the second quarter of this year, the drop in taxable sales and purchases during the third quarter is due to economic disruptions related to the coronavirus and decreasing oil prices,” Rauschenberger said.

He added, “Despite the overall downward movement, the retail trade sector experienced growth, increasing by $136 million or nearly 8 percent,” Rauschenberger continued. “This remains a trend for this important sector. Online purchases continue to impact this sector as North Dakotans choose to make purchases remotely during the pandemic.”

But there were a select few communities in the state, including Kenmare, that actually showed increases in taxable sales and purchases in the third quarter.

“Some growth in the third quarter came from pent up demand from the second quarter when many more stores were shut down for a few weeks before opening with restrictions late in the summer,” said Kathy Strombeck, a research analyst with the state Tax Department. “In some communities, growth may be occurring in part because of construction or expansion.”

Out of the 50 largest cities in the state, Kenmare was one of only 15 of them that generated a positive number through July, August and September.

Kenmare’s increase was 11 percent, from $5.6 million in 2019 to $6.1 million in 2020.

Garrison was the third quarter oddity with a 30 percent increase, going from $4.8 million to $5.8 million in one year.

Wishek, Washburn, Hazen, Oakes and Casselton all had similar numbers to Kenmare.

The closest dollar figures to Kenmare was Oakes, which saw a 4 percent increase from $5.6 million to $6.1 million over the same period from 2019.

As far as a close percentage comparison, Washburn also reported an 11 percent increase that went from $6.5 million in 2019 to $7.3 million in 2020.

Park River and Beach each had a 19 percent increase, Langdon had a 16 percent increase, Lisbon was 15 percent, Ashley was 12 percent and Hazen and Devils Lake were each 10 percent.

Park River and Grafton are the only two principal communities in Walsh County, so it was interesting to see such a generous increase in Park River, while Grafton, just 16 miles to the east, dropped 8 percent.

The same thing occurred in Ward County with Kenmare and Minot. While Kenmare’s taxable sales and purchases increased by 11 percent, Minot’s dropped by 10 percent.

In Minot’s defense, however, it has a much greater population and a larger trade area thus dollar comparisons aren’t prudent. 

So it wasn’t all gloom and doom during the third quarter. Industry wide, retail was one of only two sectors that had an increase in taxable sales and purchases.

Retail jumped 8 percent and utilities increased 10 percent. There were losses in the rest of the 13 categories that included a 64 percent reduction in mining and oil extraction.

“People did not want to venture too far in the early days of the pandemic,” Strombeck, said. “The stimulus payments received by households also likely got spent locally.”

Transportation and warehousing dropped 44 percent and real estate was down 32 percent.

People who work in the Tax Department attribute the increases to residents staying home and spending money locally during the pandemic.

Plummeting oil prices are responsible for the huge drops nearly across the board that contributed to the statewide decline.

“Demand for petroleum products plummeted nationwide,” Strombeck said. “Many industries, however, received a boost from the federal COVID funding packages that have been passed by Congress.”

Regardless, Strombeck was happy to see at least some growth. She expects there will be additional growth in the fourth quarter.

“I’ve seen the push by communities to buy local,” she said. “That is sure to help make a difference to our local retailers in the current quarter.”

And, like everyone else, personnel at the state Tax Department are looking forward to 2021. Strombeck is hoping the coronavirus vaccine helps us get back normalcy sooner than later.

“It might help return us to much more normal time, when all we worried about was rain,” she said of the vaccine. “Was it too much or too little... and the price of wheat and oil. Won’t that be nice.” ... Read EVERY WORD on EVERY PAGE of The Kenmare News by subscribing--online or in print! For details, log on to (www.kenmarend.com) email us at (news@kenmarend.com) or phone in a request at 701-385-4275.