Regional Accounts

This article highlights partnership and sole proprietorship data by region and State tabulated by the Bureau of Economic Analysis (BEA) for the Statistics of Income Division (SOI). SOI uses these tabulations in its capacity as an IRS office which prepares and publishes statistics on the operations associated with the execution and application of the internal revenue laws. BEA uses geographic coding data obtained from the Nonemployer Statistics program at the Census Bureau to assign tax records to the proper States based on the Zip Codes contained in the IRS record extracts.1 This process also identifies and suppresses any data associated with frequencies of less than three at the State level to ensure that they are disclosure-free. BEA then tabulates the number of returns and the unincorporated business income for SOI by State for partnerships and sole proprietorships. No statistical tabulations or research results are released which would potentially reveal identifiable information about individuals, employers, or establishments.2

This article presents State-level data from partnership and sole proprietorship tax returns that have been tabulated by the Bureau of Economic Analysis (BEA) for the Statistics of Income Division (SOI) of the Internal Revenue Service (IRS). The geographic distribution of selected variables from Form 1065 for partnership returns and Form 1040 Schedule C for sole proprietorship returns is compared to the U.S. population distribution.

This paper has been prepared for presentation to the Federal Economic Statistics Advisory Committee (FESAC) on December 14, 2004. It represents work in progress and does not represent any agency's final positions on issues addressed. The FESAC is a Federal Advisory Committee sponsored jointly by the Bureau of Labor Statistics of the U.S. Department of Labor and by the Bureau of Economic Analysis (BEA) and the Bureau of the Census of the U.S. Department of Commerce.

The Bureau of Economic Analysis (BEA) publishes annual estimates of state disposable personal income, the difference between state personal income and state personal current taxes. BEA also publishes annual estimates of personal income for sub-state areas, but BEA does not publish corresponding estimates of disposable personal income (DPI) due to the absence of estimates of taxes. This paper researches practical and conceptual issues in producing sub-state personal current taxes, investigates source data availability, and presents annual estimates of disposable personal income for the 361 metropolitan areas for 2001 and 2002. The methodology relies on sub-state IRS personal tax data and individual state data. Also, preliminary estimates of DPI are presented for the 179 BEA economic areas in appendix B.

Tables in this paper (XLS)

This paper studied the feasibility of reconciling BEA state personal income (SPI) and IRS adjusted gross income (AGI) at the state level. After reviewing data sources from BEA, IRS, and other agencies, it was concluded that it is feasible to prepare accurate reconciliations of state level wages and salaries. Further work is needed to determine the feasibility and value of reconciling BEA SPI and IRS AGI for other components of personal income—such as proprietors’ income, personal current transfer receipts, and dividends, interest, and rent. A limitation in reconciling these other income components is that BEA relies heavily upon IRS data to make its estimates. Thus, only limited insights might be obtained from the reconciliation.

Tables in this paper (XLS)

The Bureau of Economic Analysis (BEA) publishes annual estimates of state disposable personal income, the difference between state personal income and state personal current taxes. BEA also publishes annual estimates of personal income for sub-state areas, but BEA does not publish corresponding estimates of disposable personal income (DPI) due to the absence of estimates of taxes. This paper uses the methodology presented in an earlier working paper to revise and update the estimates of disposable personal income for the current 363 metropolitan statistical areas for 2001-2004.

Results (XLS)