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Utah taxable sales rose 7% in '98
Strong rate is rebound from lackluster 1997

Utah rebounded from a lackluster 1997 with a 6.8 percent increase in taxable sales and purchases in 1998, according to a new report from the Utah State Tax Commission.

But even that strong economic performance represents a slowdown from booming growth rates of more than 8 percent earlier this decade.The commission report said the state's total gross taxable sales in 1998 hit $28.6 billion, up from $26.8 billion in 1997 and $25.8 billion in 1996.

The 1996 to 1997 change was good for a growth rate of only 3.8 percent, while taxable sales had increased 9.5 percent in 1996, 9.7 percent in 1995 and 11.3 percent in 1994. The rate had not been lower than 8.3 percent since 1991.

But many indicators have pointed to a cooling of the Utah economy, and the commission report forecasts a similar trend, predicting 1999 gross taxable sales of $30.2 billion for growth of 5.5 percent.

"Business investment purchases rose almost 11 percent (in 1998), and taxable services grew nearly 10 percent in a year that witnessed some very hot business expansions," the report said. "For example, the growth in radio-telephone communication sales, trucking and warehousing purchases and air transportation purchases all increased in double-digit growth rates."

In the retail trade sector, taxable sales rose 5.3 percent during 1998, compared to a jump of just 3.3 percent in 1997. The sector's growth was fueled by increases of 9 percent in clothing sales and 8 percent in restaurant sales.

"Motor vehicle dealer sales rose nearly 7 percent, following a 2 percent gain in 1997," the report said. "Improving from sales declines in 1997 were two construction-related sectors: building and garden stores and furniture stores."

Lackluster hotel sales were offset in the services sector by "hot finance, insurance and real estate sales and taxable automobile leases," the report said.

"The latter jumped nearly 25 percent in 1998," it said.

A look behind the percentages shows that Utah's food stores had $3.4 billion in taxable sales in 1998, while auto dealers had almost $3 billion in sales and durable goods wholesalers racked up $2.5 billion.

Along the Wasatch Front, Utah County had the largest increase in taxable sales in 1998, up 8.1 percent to about $3.7 billion. It was followed by Davis County, up 6.9 percent at $2.3 billion; Salt Lake County, up 6.3 percent at $14.5 billion; and Weber County, up 5.5 percent at $2.3 billion. In southern Utah, Washington County's sales grew 4.1 percent to $1.1 billion.

Salt Lake City's 1998 sales of $3.9 billion were actually down 0.1 percent from 1997, while Ogden's sales were flat at about $1.1 billion. Provo's taxable sales rose 8.3 percent in 1998 to $867 million.

The strongest city growth came in Lindon, which saw a 77.6 percent jump in taxable sales to $83.5 million. Other big movers were Midvale, with sales up 71.7 percent; Lehi, up 29.8 percent; and Draper, up 26.5 percent.

The commission report is based on sales tax collections for all final retail sales, leases and rentals of tangible property, as well as services, admission charges for entertainment, and restaurant meals, hotel rooms and utilities.