SB 0494 - Fiscal Note

Fiscal Note - SB 0494 - Authorizes county option sales tax on phosphorus-containing products for wastewater treatment purposes

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0072-02

BILL NO.: SB 494

SUBJECT: Natural Resources: Sales Tax

TYPE: Original

DATE: March 22, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	($90,460)	($58,975)	($60,319)
Total Estimated Net Effect on All State Funds *	($90,460)	($58,975)	($60,319)

*Does not include income to General Revenue Fund from 1% collection fee

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government *	$0 to Unknown	$0 to Unknown	$0 to Unknown

*This proposal is permissive. Voter approval would be required before fiscal impact would be realized. Oversight assumes costs would not exceed income resulting in either a zero or positive fund balance annually.

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Natural Resources (DNR) assume no fiscal impact to their department.

Officials of the Department of Agriculture (MDA) assume no fiscal impact to their department.

Officials of the Department of Revenue (DOR) assumes there would be fiscal impact to their department. Officials stated that this legislation will require a large number of number programming changes because it is a tax on a specific product, in a specific area rather than a general state or county wide tax on all products. Certain businesses will have to be identified and coded to pay this tax and those codes remembered by our computer. Such businesses will also have certain locations that are taxable and others that may not be taxable. Officials estimate they would need 2 FTE. Officials assume they would need 2.00 Tax Processing Technologist I to supervise programming functions and sales tax registration. DOR officials estimate salaries for 10 months of FY2000 at $33,640, $41,377 in FY2001 and $42,412 in FY2002.

Fringe benefits total $10,055 in FY2000, $12,368 in FY2001, and $12,677 in FY2002.

Officials stated there would be one-time costs of $41,535 for computer usage for testing and implementing this new system, and overtime costs of $5,230.

Officials stated the number of additional local sales taxes that would be imposed is unknown; therefore, the amount of revenue that would be collected and the 1% collection fee that would be deposited to the General Revenue Fund is unknown.

LOCAL GOVERNMENT

Oversight assumes local governments that would impose a sales tax on certain products, at a rate not in excess of 1%, for the purpose of improved treatment of wastewater and water pollution abatement, including establishment and maintenance of wastewater treatment facilities would have costs of an election, and water pollution programs. Annual income and costs cannot be determined and will be shown as unknown. Oversight assumes annual costs would not exceed annual income resulting in either a net zero or positive fund balance. Fiscal impact will be shown as zero or a positive fund balance to local governments.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
GENERAL REVENUE FUND
Income to General Revenue Fund
From 1% Collection Fee	Unknown	Unknown	Unknown
Cost to Department of Revenue
Personal Service	($33,640)	($41,377)	($42,412)
Fringe Benefits	($10,055)	($12,368)	($12,677)
Expense (one-time)	($41,535)	$0	$0
Equipment	$0	$0	$0
Overtime	$5,230	$5,230	$5,230
ESTIMATED NET PARTIAL
EFFECT TO GENERAL
REVENUE FUND	($90,460)	($58,975)	($60,319)
*Partial effect to General Revenue Fund does not include income from 1% collection fee.
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
COUNTIES
Income to Counties
From local wastewater
treatment sales tax	Unknown	Unknown	Unknown
Cost to Counties
For wastewater
treatment programs	(Unknown)	(Unknown)	(Unknown)
NET EFFECT TO
LOCAL GOVERNMENT*	$0	$0	$0
	to	to	to
	Unknown	Unknown	Unknown
*Oversight assumes costs would not exceed income resulting with either a zero or positive fund balance. This proposal is permissive and would require voter approval before counties would realize fiscal impact.
FISCAL IMPACT - Small Business
If the voters of a county would approve the imposition of a county sales tax on the sale of non-agricultural products containing phosphorus, certain small businesses located in that county could be expected to be fiscally impacted because of costs related to the collection and payment of the sales tax.

DESCRIPTION

This act authorizes an optional county sales tax on the sale of non-agricultural products containing phosphorus at the retail level. Any county, by majority vote of the county, may levy up to a one-percent sales tax at retail on all products containing at least 0.1% elemental phosphorus by weight, except that fertilizers used for agricultural production are exempted.

A county shall use the funds for wastewater treatment or water pollution abatement. The funds may be used as matching funds for obtaining any grants or loans administered by the Clean Water Commission pursuant to chapter 644, RSMo.

Revenues collected by the Director of Revenue on behalf of a county shall be placed in a separate fund and returned each month to the county where collected.

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

Department of Agriculture

Department of Natural Resources

NOT RESPONDING: The County Commissions of: Boone, Greene, Jefferson, Franklin, Warren, Clay, Platte, Callaway, St. Charles, St. Louis and Jackson Counties.

Jeanne Jarrett, CPA

Director

March 22, 1999