COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1972-01
Bill No.: SB 677
Subject: Taxation and Revenue - Income
Type: Original
Date: April 14, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| General Revenue | $66,000,000 | $15,000,000 | $0 |
| Total Estimated
Net Effect on General Revenue Fund |
$66,000,000 | $15,000,000 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| 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 |
| 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 of the Office of Administration, Division of Budget and Planning (BAP) assume this bill would "decouple" the state income tax from the federal accelerated depreciation law passed in March 2002 for Fiscal Year 2004 and beyond. This would result in an estimated gain to state general revenue of:
FY 2004 $66.0 million
FY 2005` $15.0 million
This gain would accrue to the corporate income tax. This estimate is based upon an estimate of the impact of the accelerated depreciation on federal revenues provided by the Joint Committee on Taxation of the U.S. Congress.
This proposal would increase total state revenue and would not affect BAP.
Officials of the Department of Revenue (DOR) did not respond to our fiscal note request. However, in response to SB 1248 from the 2002 session, DOR did not have an administrative impact to the similar proposal.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
|
GENERAL REVENUE FUND |
|||
| Income - General Revenue | |||
| Increase in tax due to decoupling from federal accelerated depreciation |
$66,000,000 |
$15,000,000 |
$0 |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDS |
$66,000,000 |
$15,000,000 |
$0 |
| 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 makes the federal accelerated depreciation decoupling from SB 1248 (2002) permanent.
Returns the current income tax law regarding tangible property depreciation to pre-March 2002 law in reference to the September 11, 2001 terrorist attacks. This proposal only affected items purchased between July 1, 2002 to June 30, 2003.
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
Office of Administration
Division of Budget and Planning
NOT RESPONDING: Department of Revenue
Mickey Wilson, CPA
Director
April 14, 2003