Bureau of Business Research


Date of this Version



Copyright 2021 University of Nebraska, Bureau of Business Research


Sales capture, the share of local spending power that is captured by area businesses, is an important measure of economic activity. Greater sales capture, which is typically measured using data on local taxable sales, creates multiple benefits for the economy. 1. EMPLOYMENT: Greater sales capture means more employment in retailers, wholesalers, restaurants, hotels, and other businesses subject to sales tax. 2. TAX REVENUE: Taxable sales are an important part of the tax base of many city governments. 3. QUALITY OF LIFE: Retail and hospitality (restaurants, lodging, amusement, and recreation) businesses account for a significant share of taxable sales. These industries are also crucial to the quality of life. Communities with more hospitality and retail options are more enjoyable places to live, and may be better able to attract or retain the population. This report uses county-level taxable sales data from the Nebraska Department of Revenue to calculate sales capture, using a measure called a “pull factor.” The value of the pull factor is found by dividing county per capita taxable sales by the state average per capita taxable sales. The state average represents the expected taxable sales in a county, given its population. The Taxable Sales Measure This report utilizes 2019 data. This is the most recent data available for a year that was not impacted by the Covid-19 pandemic. Data for 2019 also more fully captures online retailing. Specifically, the taxation of online retailing changed significantly in Nebraska during 2017 and 2018. Prior to those changes, online retailers were not required to collect Nebraska sales tax if they did not have a physical presence in Nebraska. By June 2018, however, most online retailers were required to collect sales tax for purchases occurring in the state of Nebraska. A final reason to use data for a recent year like 2019 is the rapid growth in online shopping. Taxable sales data from the Nebraska Department of Revenue also provide an appropriate measure of sales. A significant share of taxable sales in Nebraska occurs in industries such as retail stores, restaurants, hotels, and leisure and hospitality industries. These industries primarily reflect the spending patterns of household consumers, and as a result reflect the quality of life. At the same time, the sales of intermediate manufactured goods are excluded from taxable sales in Nebraska. This is appropriate for the current analysis. Manufacturing activity is an important component of the local economy but is not a focus for sales capture analysis.