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Introduction <br /> The University of Minnesota Extension has developed this retail trade analysis program to assist in the economic <br /> development of Minnesota towns and cities. These reports are available for all Minnesota counties,for most cities above <br /> 5,000 population and for a few cities smaller than 5,000 population. The retail sector of each jurisdiction can be evaluated <br /> by comparing its trends to those of other similar jurisdictions. Business people and economic development officials can <br /> use measures such as pull factors and leakages to determine the need and feasibility of new retail businesses. <br /> Data Sources <br /> Most of the data in the analysis are based on annual reports of Minnesota retail and use tax,published by the Minnesota <br /> Department of Revenue. The Department of Revenue published an annual report of sales and use tax by jurisdiction until <br /> 1996,at which time the reports were released biannually due to budget constraints. This analysis uses the available reports <br /> from 1990-1996, 1998,2000,2003,2004,2005 and 2006.The reports interpolate data for the years in which data are not <br /> available.(See http://www.taxes.state.mn.us/taxes/legal_policy/research_reports/sales_use_statistics_main.shtml)The income <br /> data in this report are obtained from reports by Bureau of Economic Analysis(BEA).(See http://www.bea.gov/regional/reis) <br /> Population data are derived from the U.S.Census.(See http://www.census.gov/popest/estimates.php) <br /> Sales and use tax permit holders file returns and remit taxes on either a monthly,quarterly or annual basis. Large businesses <br /> such as discount department stores whose tax is more than$500 per month are required to file on a monthly basis,while <br /> medium-sized businesses whose sales tax collections are less than$500 per month,are required to file on a quarterly basis <br /> and small businesses with sales tax collections less than$100 per month would most likely file on an annual basis. <br /> • Definition of Terms <br /> Gross Sales <br /> Gross sales include taxable sales and exempt sales for businesses holding sales and use tax permits. This is the most <br /> comprehensive indicator of business activity for the reporting jurisdictions and is the measure used in this report,unless <br /> otherwise noted. <br /> Taxable Sales <br /> Taxable sales are the amount of sales subject to sales tax. Taxable sales exclude exempt items,items sold for resale,items <br /> sold for exempt purposes and items sold to exempt organizations.For more information on what is taxed in Minnesota,see <br /> "Minnesota Sales and Use Tax Instruction Booklet"availabe on the web at <br /> http://www.taxes.state.mn.us/taxes/sales/instructions/st bk07.pdf) <br /> Current and Constant Dollar Sales <br /> Current dollar(or"nominal dollar")sales are sales as reported by the state.No adjustment has been made for price inflation. <br /> In general this measure of sales is not satisfactory for comparisons over long periods of time since it does not account for <br /> changes in population,inflation,or the state's economy.Constant dollar (or"real dollar")sales reflect changes in price <br /> inflation by adjusting current dollar sales with the Consumer Price Index(CPI).Constant dollar sales indicate the real sales <br /> level with respect to a base year.This is a more realistic method of evaluating sales over time than current dollar <br /> comparisons,but still does not take into consideration changes in population or changes in the state's economy. <br /> • <br /> Page 1 <br />