COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1772-01
Bill No.: SB 583
Subject: Taxation and Revenue - Income; Tax Credits; Business and Commerce; Agriculture and Animals.
Type: #Updated
Date: March 11, 2003
#Updated based upon Oversight Assumptions
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| #General Revenue | Unknown, Exceeding $100,000 | Unknown, Exceeding $100,000 | Unknown, Exceeding $100,000 |
| #Total Estimated
Net Effect on General Revenue Fund |
Unknown, Exceeding $100,000 | Unknown, Exceeding $100,000 | Unknown, Exceeding $100,000 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| None | |||
| Total Estimated
Net Effect on Other State Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | $0 | $0 | $0 |
ASSUMPTION
Officials from the Department of Economic Development (DED) state that Total State Revenues (TSR) could be impacted positively from this bill. Chapter 135.766 RSMo. was repealed as part of legislation that was formerly codified into law but later declared unconstitutional. DED still projects the impact of this credit in revenue projections (for FY 2004, projections are $200,000 for authorized and $80,000 for redeemed). Therefore, passage of this bill would result in an estimated positive impact on TSR which is tempered by amended returns in FY 04 and 05.
DED assumes no administrative impact on the department resulting from the bill. Current projections are $80,000 redeemed per year. DED assumes positive impact on TSR in the amount of $60,000 in FY 04, $70,000 in FY 05 and $80,000 in FY 06.
Officials from the Department of Revenue assume this proposal would have no administrative impact on their agency.
ASSUMPTION (continued)
Officials from the Department of Agriculture did not respond to our request for fiscal impact.
#Oversight assumes the enabling legislation (HB 139) for this tax credit program was passed in 1999. In the 2000 legislative session, SB 894 was passed that repealed the program, however, this entire bill was declared unconstitutional in 2002. Therefore, the tax credit program is effectively, still on the Missouri Statutes. This proposal attempts to repeal the program once again.
#According to the Small Business Administration, roughly $3.1 million in loan fees were paid by Missourians in the fiscal year ended September 30, 2002. According to the United States Department of Agriculture (USDA), roughly between $150,000 and $300,000 in Rural Development loan guarantee fees are collected in a given year. Also according to the USDA, roughly between $400,000 and $500,000 in Farm Service Agencies loan guarantee fees are collected in a given year.
#With this program, tax credits for these fees could be applied against Missouri taxes due, however, not all payees of these fees will have sufficient tax liability to be able to offset with the tax credit. Since this credit cannot be sold, carried forward or carried back, the amount of tax credits that will be able to be used against Missouri taxes will be somewhat limited. Therefore, Oversight assumes that without this legislation (repeal of the Small Business Guarantee Fee Tax Credit) an unknown amount of tax credits, exceeding $100,000, would be utilized against Missouri income taxes. Therefore, Oversight assumes this repeal will result in a savings to the General Revenue fund of an unknown amount, over $100,000 in each of the three years of the fiscal note.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| #GENERAL REVENUE | |||
|
#Savings - Repeal of the Small Business Guarantee Fee Tax Credit |
Unknown, exceeding $100,000 | Unknown, exceeding $100,000 | Unknown, exceeding $100,000 |
|
#ESTIMATED NET EFFECT TO THE GENERAL REVENUE FUND |
UNKNOWN, EXCEEDING $100,000 | UNKNOWN, EXCEEDING $100,000 | UNKNOWN, EXCEEDING $100,000 |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal repeals the Small Business Guaranty Fee Tax Credit which was repealed by SB 894 (2000). That bill was held unconstitutional for clear title problems and thrown-out by the Supreme Court. This proposal would repeal the tax credit once again.
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 Economic Development
Department of Revenue
NOT RESPONDING: Department of Agriculture
Mickey Wilson, CPA
Director
March 11, 2003