COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 3910-01
BILL NO.: SB 843
SUBJECT: Taxation and Revenue - Sales and Use: Revenue Department; Cities, Towns and Villages; Counties
TYPE: Original
DATE: February 1, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | $0 to (Unknown) | $0 to (Unknown) | $0 to (Unknown) |
| Total Estimated
Net Effect on All State Funds* |
$0 to (Unknown) | $0 to (Unknown) | $0 to (Unknown) |
* Subject to voter approval. Lost revenue, if any, could exceed $100,000.
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government* | $0 to (Unknown) | $0 to (Unknown) | $0 to (Unknown) |
* This proposal if permissive. Voter approval would be required before fiscal impact would be realized.
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 3 pages.
ASSUMPTION
Officials of the Department of Revenue (DOR) state this proposal allows local governments to eliminate the sales tax on food. They assume this proposal will not have an administrative impact on their agency and that the fiscal impact is unknown.
In a similar proposal, officials of the Office of Administration (COA) stated this proposal would have no fiscal impact on state revenues. COA staff state it is impossible to estimate the effects on local governments without knowing which local governments will remove their sales tax on food and their local sales tax rate.
Oversight assumes this proposal is permissive. Local governing bodies may adopt an ordinance which shall be submitted to the voters within their political subdivisions to exempt qualified sales of food from local sales tax. It is unknown which local governments would adopt such an ordinance and also which ordinances would pass a vote of the people. Oversight assumes the Department of Revenue would have a reduction of income from the loss of the 1 percent collection fee from collecting sales taxes on food on behalf of the cities and counties.
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(10 Mo.)
GENERAL REVENUE FUND
Loss - Department of Revenue
Loss of 1% collection fee from $0 to $0 to $0 to
sales tax exempted at local level (unknown) (unknown) (unknown)
ESTIMATED NET EFFECT ON $0 to $0 to $0 to
GENERAL REVENUE FUND (UNKNOWN) (UNKNOWN) (UNKNOWN)
FISCAL IMPACT - Local Government FY 2001 FY 2002 FY 2003
(10 Mo.)
CITIES AND COUNTIES
Loss - Reduction in sales tax $0 to $0 to $0 to
revenue from food
Costs - Local election costs $0 to $0 to $0 to
(Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON $0 to $0 to $0 to
CITIES AND COUNTIES (UNKNOWN) (UNKNOWN) (UNKNOWN)
FISCAL IMPACT - Small Business
Small business food retailers could be affected by this proposal.
DESCRIPTION
This proposal authorizes cities and counties that have imposed a sales tax on food to submit the question of the repeal of that tax to the voters.
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
Jeanne Jarrett, CPA
Director
February 1, 2000