COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1842-01
Bill No.: SB 602
Subject: Taxation and Revenue - Sales and Use; Agriculture and Animals
Type: Original
Date: March 3, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| General Revenue | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on General Revenue Fund |
(UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| School District Trust | (Unknown) | (Unknown) | (Unknown) |
| Conservation | (Unknown) | (Unknown) | (Unknown) |
| Parks and Soil | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on Other State Funds |
(UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | (UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
ASSUMPTION
Officials of the Department of Revenue and the Department of Agriculture assume this proposal would not fiscally impact their agencies.
Officials of the Office of Administration, Budget and Planning (BAP) assume this bill would exempt natural gas used in the production of ethanol from taxation. BAP has no empirical basis for estimating the fiscal impact and thus defers to the Department of Revenue or the Department of Natural Resources for an estimate. This proposal would have no impact on BAP.
Officials from the Department of Natural Resources (DNR) assume this proposal removes the tax on natural gas used in the production or processing of ethanol. The proposed exemption is similar to Section 144.030 (31) and although the amount of natural gas used in the primary process of ethanol is unknown, DNR does not believe it to be significant. DNR assumes the proposal would result in decreased revenue to the Parks and Soils Sales Tax Fund. DNR further assumes the Department of Revenue or the Department of Agriculture would provide the revenue projections.
ASSUMPTION (continued)
Oversight assumes this proposal would potentially decrease revenue as ethanol producers will be allowed an exemption from sales tax on natural gas purchases for the production of the ethanol. The amount is unknown. Oversight will reflect the revenue loss for this proposal as a negative unknown for each year.
This proposal could decrease Total State Revenue.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
|
GENERAL REVENUE FUND |
|||
| Loss - General Revenue | |||
| Sales tax exemption for natural gas used in the production of ethanol | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDS |
(UNKNOWN) |
(UNKNOWN) |
(UNKNOWN) |
| OTHER STATE FUNDS | |||
| Loss - Other State Funds | |||
| Sales tax exemption for natural gas used in the production of ethanol | |||
| School District Trust Fund | (Unknown) | (Unknown) | (Unknown) |
| Conservation Sales Tax Fund | (Unknown) | (Unknown) | (Unknown) |
| Parks and Soil Sales Tax Fund | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON OTHER STATE FUNDS |
(Unknown) |
(Unknown) |
(Unknown) |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| Loss to Political Subdivisions | |||
| Sales tax exemption for natural gas used in the production of ethanol |
(Unknown) |
(Unknown) |
(Unknown) |
| ESTIMATED NET EFFECT ON LOCAL POLITICAL SUBDIVISIONS |
(Unknown) |
(Unknown) |
(Unknown) |
FISCAL IMPACT - Small Business
Only ethanol producers would be expected to be impacted as a result of this proposal.
DESCRIPTION
This proposal establishes an exemption from state and local sales and use taxes for natural gas used in the primary manufacture or processing of ethanol.
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
Budget and Planning
Department of Agriculture
Department of Natural Resources
Mickey Wilson, CPA
Director
March 3, 2003