This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0005 - Terminates Chapter 147 corporation franchise tax after January 1, 2000
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 0265-01
BILL NO.: SB 5
SUBJECT: Corporations; Secretary of State; Revenue Dept.; Taxation and Revenue-General
TYPE: Original
DATE: January 7, 1999
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| General Revenue | $0 | ($81,852,350) | ($84,848,581) |
| Total Estimated
Net Effect on All State Funds |
$0 | ($81,852,350) | ($84,848,581) |
|
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 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 3 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue (DOR) state this proposal would not fiscally impact their agency.
Officials of the Secretary of State (SOS) assume this proposal would eliminate the collection of Franchise Tax after January 1, 2000. The imposition of Franchise Tax generated revenues in the following amounts in FY97 $72,790,476; FY98 $77,431,188.
In a similar proposal officials of the Office of Administration (COA) estimate was based on the FY99 Consensus Revenue Forecast. Returns for corporations that have a fiscal year that ends December 31st are not due until April 15th. Therefore, corporate franchise tax would still be collected during the second half of FY2000.
Oversight, for purposes of this fiscal note has elected to use the revenue loss estimate of the Office of Secretary of State and will also show the revenue savings to General Revenue for the elimination of the Franchise Tax Division's operation and staff.
This proposal would result in a decrease in Total State Revenues.
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Loss to General Revenue Fund | |||
| Elimination of Corporate Franchise Tax | $0 | ($82,000,000) | ($85,000,000) |
| Savings to General Revenue Fund | |||
| Secretary of State's Office (SOS) | |||
| Elimination of Franchise Tax Division | |||
| Personal Service (5 FTE) | $0 | $101,729 | $104,272 |
| Fringe Benefits | $0 | $30,406 | $31,167 |
| Expense and Equipment | $0 | $15,515 | $15,980 |
| Administrative Savings to SOS | $0 | $147,650 | $151,419 |
|
ESTIMATED NET EFFECT TO | |||
| GENERAL REVENUE FUND | $0 | ($81,852,350) | ($84,848,581) |
| FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| 0 | 0 | 0 | |
| FISCAL IMPACT - Small Business | |||
Small businesses would be expected to be fiscally impacted to the extent they are required to file and pay corporate franchise tax. Small businesses under this proposal would not have to file or pay corporate franchise tax.
DESCRIPTION
This act terminates, for all taxable years beginning on or after January 1, 2000, the corporation franchise tax.
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
Secretary of State
Jeanne Jarrett, CPA
Director
January 7, 1999