SB 0879 - Fiscal Note

Fiscal Note - SB 0879 - Provides $100 Tax Credit For Dependents

L.R. NO.  3269-01
BILL NO.  SB 879
SUBJECT:  Income tax: Taxation
TYPE:     Original
DATE:     February 19, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED                 FY 1997         FY 1998         FY 1999

General Revenue         ($54,362,717)  ($136,154,331)  ($136,426,640)

Total Estimated
Net Effect on All
State Funds             ($54,362,717)  ($136,154,331)  ($136,426,640)

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998         FY 1999

None

Total Estimated
Net Effect on All
Federal Funds                      $0              $0              $0

                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998         FY 1999

Local Government                   $0              $0             $0


                              FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Revenue state this proposal would require
revisions to the individual income tax return. It would also require the
additional keying of data from the income tax return. The revisions to the
income tax return and tax systems would be handled by existing personnel. The
Information Systems Division would request one Data Entry Operator II for
five months of the tax processing year to key the additional data from
approximately 500,000 income tax returns that may be affected. State Data
Center costs would be requested for testing and implementation costs.

Oversight assumes the additional workload presented by this proposal could be
handled by existing personnel. However, oversight has allowed the request for
State Data Center costs.

Officials of the Office of Administration (OA) state this proposal provides a
$100 tax credit per dependent. OA staff have assumed this proposal would have
an estimated impact of approximately ($136 million) annually. The estimate is
based on State of Missouri Individual Income Tax data, data from Tax
Expenditure Report, and population projections from the State Demographer, In
calculating the estimate, OA staff assume a marginal tax rate of 6%.

FISCAL IMPACT - State Government       FY 1997        FY 1998        FY 1999
                                      (10 Mo.)
GENERAL REVENUE FUND

Cost to General Revenue Fund
  Department of Revenue
  State Data Center Expense           ($9,691)             $0             $0

Loss to General Revenue Fund
  Additional Income tax credits  ($54,353,026) ($136,154,331) ($136,426,640)

ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND             ($54,362,717) ($136,154,331) ($136,426,640)

FISCAL IMPACT  - Local Government      FY 1997        FY 1998        FY 1999
                                      (10 Mo.)

                                             0              0              0

DESCRIPTION

This act provides a $100 tax credit for each dependent claimed on an
individual's tax return filed on or after January 1, 1997.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.


SOURCES OF INFORMATION

Department of Revenue
Office of Administration