When Wal-Mart and Target started selling food, it made shopping easier for some consumers. But it didn’t help with tracking holiday retail sales.
That’s because sales taxes are tracked by store type, which each store operator selects. Food sales at a large department store might be lumped into general merchandise purchases.
Michael Allen, deputy commissioner of finance and associate commissioner for tax policy at Maine Revenue Services, said the state is reviewing those categories and considering changes next year that would enhance the ability to forecast revenues and plan the state budget accordingly.
“Those [general merchandise] stores have changed so much, and food can now be a big component of sales,” Allen said. “A good 10 percent or 20 percent [of total sales] is food.”
The same goes for gas stations that decades ago did not have associated convenience stores, Allen said.
Food is a separate category in the state sales tax groupings, which also include general merchandise, other retail, automobiles and transportation, restaurants, lodging, building supplies and sales tax paid by businesses.
Efforts to track holiday sales typically include general merchandise stores, like most department stores, and other retail, like sporting goods stores or specialty stores. The Bangor Daily News also included the category of food in an analysis of holiday spending.
With online shopping, spending isn’t necessarily reflected in state figures because it doesn’t always get taxed. It depends on whether a retailer or its affiliated sellers have a physical presence in the state, which is why online retail giant Amazon pulled its affiliate program in Maine last year. A retailer like L.L. Bean shipping to Maine residents, however, would collect sales tax on the purchase.
“In some cases, that does translate to less direct sales tax revenue,” Allen said. “And in a lot of cases, it’s just another way of shopping now.”