COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
LR No.: 1023-13
Bill No.: Truly Agreed to and Finally Passed CCS for HS for SS for SCS for SB 323 and 230
Subject: Community Enhancement District and Tourism Sales Tax, Children's Services
Type: Original
Date: May 29, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| General Revenue * | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds * |
$0 | $0 | $0 |
* The local sales tax proposals are permissive and any income or costs to the State's General Revenue Fund are not reflected in these totals. All local tax propositions require voter approval, therefore, fiscal impact is shown as $0. Please read DOR responses in the Assumption Section of this fiscal note for impact should voters adopt the imposition of a sales tax allowed by this legislation.
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| NONE | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 10 pages
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| City of Branson | Unknown | Unknown | Unknown |
| Local Government* | $0 | $0 | $0 |
* Does not include potential revenue and costs for local sales tax proposals.
ASSUMPTION
Officials of the Department of Transportation stated that this proposal would have no fiscal impact on their department.
Officials of the State Treasurer's Office and the Department of Natural Resources assumes there would be no fiscal impact.
SECTION 67.571 - 67.577: MUSEUM AND CULTURAL HERITAGE SALES TAX
Officials of the Department of Revenue stated that their department generally is not responsible for the collection of tourism funding, however, should this proposal be voter approved the DOR would be able to collect the sales tax, with existing appropriations, provided the sales tax is established along existing boundaries. Oversight assumes that should the voters in the eligible county approve the imposition of a museum, festival, tourism sales tax, and the DOR would collect the sales tax, a 1% collection fee would be retained by the DOR and would be deposited in the State's General Revenue Fund. For the purposes of this fiscal note fiscal impact will be shown as $0. This proposal is enabling legislation and does not mandate the imposition of the sales tax.
SECTION 67.1003-67.1005: TRANSIENT GUEST TAX
Officials of the Department of Revenue (DOR) indicated this proposal would have no fiscal impact since DOR generally does not agree to collect local tourism taxes and they are left up to the political subdivision or municipalities to collect.
SECTION 67.1360: TRANSIENT GUEST TAX
Officials of the Department of Revenue and the Department of Economic Development - Division of Tourism, stated that this proposal would have no administrative or fiscal impact to their departments. Officials of the City of Cuba stated that the transient tax would generate approximately $22,000 annually.
ASSUMPTION (continued)
Oversight assumes this proposal is enabling legislation and would have no state or local fiscal impact. Local government would have no fiscal impact without voter approval. Oversight will show fiscal impact as $0
SECTION 67.1775: COMMUNITY CHILDREN'S SERVICES FUND:
Officials of the Department of Revenue assume there would be no fiscal impact or administrative impact to their department.
Officials of the Department of Social Services stated that it is unknown what impact this legislation would have on the Division of Family Services as the children served may or may not be involved with the agency. Funding for community based services may lead to a decrease in
the need for foster care placements. Officials assume no fiscal impact.
Oversight assumes that the Department of Revenue would not collect the sales tax provided for in Section 67.1775, therefore, there would be no fiscal impact to state funds. Local governments that would adopt the one-quarter cent sales tax would realize some administrative impact in the collection of the sales tax, and would have election costs associated with the approval to levy the sales tax. This Section is permissive. Oversight for the purposes of this fiscal note will show fiscal impact as $0, because this proposal does not mandate the imposition of the sales tax.
SECTIONS: 67.1950 -67.1977:
Tourism Community Enhancement District :
Department of Economic Development officials assume no fiscal impact to their department.
Department of Revenue (DOR) officials stated the DOR's Mainframe sales tax system (MITS) would be able to handle the collections for the district, however, this proposal creates an item tax situation within the district with the exemption of the sales of funeral services within the tourism district. This would require the tax to be collected for the funeral services for state/locals but not for the tourism district sales tax. MITS would need to be modified to all for the creation of items tax. Some current single location accounts would have to report for two locations and in addition, some current two location vouchers filers would now be forced to file a long return. This would generate additional errors and additional key entry. DOR would need one Tax
Processing Tech I for every 34,000 errors generated, a Clerk II for every 184,000 returns impacted for pre-edit, and one Data Entry Operator for every 170,000 returns impacted. Officials estimate costs for 3.0 FTE, with fringe benefits, equipment and expense for FY 2002 ($135,647) , FY 2003 ($89,162), and in FY 2004 ($91,424). These estimates include $36,112 for 1073 hours of Programming costs and State Data Center Costs of $6,981. If the Tourism Community ASSUMPTION (continued)
Enhancement District Board elects to have the DOR collect the sales tax there would be income to the State's General Revenue Fund generated from the 1% collection fee as provided for. The amount of income cannot be estimated and is unknown.
Section 67.1965 of this proposal would allow the district board to enter into an agreement with the County Collector of the county where the majority of the area of the district is situated or with the City Collector of the largest city within the district for sales tax collection. Oversight is not able to determine which collection option a district board would choose, if a district were established, therefore, income to the State's General Revenue Fund will be shown as $0. Establishment of a Community Enhancement District is not mandated by this proposal, and voter approval is required before fiscal impact would occur.
Officials of the Department of Elementary and Secondary Education (DESE) stated that this proposal would have no fiscal impact to their department. Officials stated that Section 67.1968.1(1) requires that ten percent of the revenues generated from the tourism tax be distributed to the school districts within the tourism district based on the revenue collected within each school district. This new revenue would not be a deduction in the state aid formula as defined in Section 163.031, RSMo. The amount of revenue any school district would receive is unknown as it depends on, 1) creation of a Tourism Community Enhancement District; 2) the amount of sales tax approved by voters; and 3) amount of sales within a school district's boundaries.
Oversight assumes that Section 67.1968.2 of this proposal requires that ten percent of the sales tax collected be used for either senior citizen or youth or community enhancement purposes within the district. The board would distribute these funds to the cities within the district based upon the amount of sales tax collected within each city. Section 67.1986.3 requires that seventy-five percent of the revenue is to be used by the Tourism Board for marketing, advertising, and promotion of tourism.
Oversight assumes this proposal is not mandated and requires local approval before there would be fiscal impact, therefore, fiscal impact will be shown as $0.
SECTIONS: 67.1922 - 67.1940 and 67.1300: Economic Development Sales Tax :
The Department of Economic Development, the Department of Transportation, and the Office of Administration assume no fiscal impact.
Department of Revenue officials assume if a sales tax were adopted by any of the counties described in this proposal they would need to update rate tables and distribution on the MITS
system. Officials estimate costs of upgrades for 727 hours of programming at $24,569, and State ASSUMPTION (continued)
Data Center implementation costs at $4,730 for a total one-time cost of ($29,299). DOR officials assume that to expand the sales tax to Caldwell County (Section 67.1300) would have no fiscal impact.
Stone County officials assume there would be no fiscal impact unless voters would approve the sales tax. Officials stated there would be some savings in costs associated with water quality meetings.
Oversight assumes this substitute does not mandate that local governments initiate the provisions in this proposal. However, if an eligible county would receive voter approval to create either a tourism or a Community Enhancement District sales tax, then governmental bodies would realize fiscal impact. Oversight will show fiscal impact to state and local governments as $0
SECTION 1- CAR RENTAL FEE for TOURISM:
Oversight assumes that the Platte County Commission would need voter approval to levy the $1 car rental fee. Oversight assumes that the amendment does not mandate that Platte County initiate the fee, therefore, this proposal is discretionary. Should the County Commission impose the car rental fee, the county would realize an unknown amount of income to be used for only tourism related purposes. Because this amendment is discretionary fiscal impact is shown as $0.
SECTION 94.812 - BRANSON TOURISM TAXES:
Oversight assumes that the change made to Section 94.812, by removing the language that limits the City of Branson from collecting tax on items that are less than $1 in value would increase income generated by those tourism taxes. This would only apply to the taxes established pursuant to Sections 94.802 and 94.805. Oversight does not know if the City of Branson currently collects the taxes provided for in Sections 94.802 and 94.805, however, Oversight assumes that these taxes are currently collected and will show an increase of income from these taxes. Income is unknown.
Officials of the Department of Revenue assume that the repeal of this language would increase the amount of tax that would be generated by those taxes imposed pursuant to Sections 94.802 and 94.805. The amount of increase in revenues is indeterminable. The DOR does not collect transient guest tax for the City of Branson.
Section 94.802- This section provides for a tourism tax that is imposed on the price paid or
charged for rooms or accommodations in hotels, motels, condos, or for admissions to any private tourist attraction.
ASSUMPTION (continued)
Sections 94.805- This Section allows for a tourism tax to be collected on the purchase price paid or charged to any person for food and drinks sold on the premises of any restaurant establishment within the City.
Oversight will show fiscal impact to the City of Branson as a positive Unknown.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| GENERAL REVENUE FUND * | |||
* Oversight assumes the tax provisions contained in this proposal to be permissive, and require voter approval. Please read assumption section Department of Revenue statements to determine fiscal impact should any sales taxes be adopted by voters. DOR does not collect transient guest taxes. Should a sales tax be voter approved that would require the DOR to collect the tax, there would be Income to the State's General Revenue Fund from the 1% collection fee, and depending upon which sales tax would be adopted, the DOR could have Costs as described in the assumption section of this fiscal note.
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| CITY OF BRANSON | |||
| Income - from repeal of tax limitation language in Section 94.812 | Unknown | Unknown | Unknown |
FISCAL IMPACT - Small Business
Small businesses located within a Tourism Community Enhancement District or within a Tourism district, or an Economic Development District that would receive voter approval to impose a sales tax, or transient guest tax would expect to be fiscally impacted to the extent that they would collect and pay the sales tax within those districts. This proposal is not mandated. Small businesses of the hotel/motel industry and businesses that rent boat slips for recreational boating that are located in a city or county that would receive voter approval to impose a transient guest tax would be expected to be fiscally impacted to the extent that they would incur additional administrative duties and costs related to collection of the transient guest tax. Should the voters of Platte County approve the imposition of a $1 fee on car rentals, those businesses would be expected to be fiscally impacted to the extent that they would incur additional FISCAL IMPACT - Small Business
administrative duties and costs related to collection of the car rental tax.
DESCRIPTION
SECTION 67.1360: Transient Guest Tax
This section would allow any city of the third class with a population of more than three thousand but less than four thousand located in a county of the third class without a township form of government with a population of more than eighteen thousand which adjoins both a county of the first class with a population of less than one hundred thousand and at least four counties of the third class to seek voter approval to impose a tax on the charges for all sleeping
rooms paid by transient guest.
SECTION 67.571 - 67.577 : Museum and Festival Tourism Sales Tax:
This section would allow the governing body of Buchanan county to seek voter approval of a tourism sales tax for the purpose of funding museums and festivals.
SECTION 67.1775 and 210.861 : Community Children Services Fund
This act allows, after voter approval, St. Louis City, St. Louis County, St. Charles County, Jefferson County, Franklin County, Warren County and Lincoln County to impose an up to one quarter of one cent sales tax for community services for children. Current law only allows St. Charles County to enact this sales tax.
This act increases the age from eighteen to nineteen for people to benefit from the services funded by this sales tax. The moneys collected from this sales tax will be deposited into the County's Community Children's Service Fund and administered by the Board of Directors. (Section 210.860)
This act modifies the current law that pertains to the Board of Directors who administer the Community Children's Service Fund by allowing St. Louis City, St. Louis County, St. Charles County, Jefferson County, Franklin County, Warren County and Lincoln County to have its Community Mental Health Board of Trustees oversee the Community Children's Services Fund,
not a separate Board of Directors. Current law only allows St. Louis City and St. Charles County to have the Community Mental Health Board of Trustees oversee the fund.
SECTIONS 67.1950 - 67.1979 : Tourism Community Enhancement Districts:
This act provides for the creation of Tourism Community Enhancement Districts by any county DESCRIPTION (continued)
containing any part of a Corps of Engineers lake with a shoreline of at least seven hundred miles and not exceeding a shoreline of nine hundred miles or any, city, town or village located in a county containing any part of a Corps of Engineers lake with a shoreline of at least seven
hundred miles and not exceeding a shoreline of nine hundred miles. At least two percent of the registered voters of a county, city, town or village are required to have signed a petition. The petition is filed with the clerk and notice is provided for a public hearing prior to the governing body passing an order or ordinance creating a Tourism Community Enhancement District. (Section 67.1953)
Each Tourism Community Enhancement District will have a Board of Directors with no less than five members. The makeup of the Board shall be as follows:
1) One member appointed by the governing body of the largest city, town or village, at the inception of the district, within the district;
(2) One member selected by the governing body of the second largest city, town or village, at the inception of the district, within the district, if such exists; or if no such city, town or village
exists, one member selected by the governing body from any unincorporated area of such district;.
(3) Two members shall be selected by the largest convention and visitor's bureau or similar organization at the inception of the district, within the district;
(4) One member shall be selected by the destination marketing organization of the second largest city, town or village at the inception of the district, within the district. Any time the district is expanded, the board membership increases by two with the following requirements:
(1) One member shall be appointed by the governing body of the city, town or village containing the precincts added to the district or by the board for any unincorporated area:
(2) One member shall be appointed by the governing body of the city, town or village with the
largest population at the inception of the district for the first expansion and every odd numbered expansion thereafter, or by the convention and visitor's bureau or similar entity of the largest city, town or village at the inception of the district, for the second expansion and every even numbered expansion thereafter. (Section 67.1956)
The board may submit up to an one percent sales tax to the voters within the district. The revenue received from the sales tax will be deposited in the Tourism Community Enhancement District Sales Tax Trust Fund which is administered by the Department of Revenue. Upon distribution by DESCRIPTION (continued)
the Department of Revenue, the Board will allocate the revenue in the following manner:
(1) Ten percent will be disbursed to the school district or districts within the Tourism Community Enhancement District. This distribution will not affect the calculation of the funding formula for state aid contained in Chapter 163, RSMo.;
(2) Ten percent will be used for senior citizen or youth or community enhancement purposes within the district;
(3) Seventy-five percent will be used by the Board for marketing, advertising and promotion of tourism. Allows the Board to enter into agreement with not-for-profit organizations to develop a
marketing plan for the district;
(4) Two percent will be distributed among the destination marketing organizations within the school district or districts within the district, according to the proportion of the sales tax collected in each school district or districts within the district;
(5) Two percent will be distributed to the not-for-profit organization for administering the marketing plan. (Section 67.1959)
All entities within the district that collect taxes pursuant to Sections 94.802 to 94.805, RSMo. (Branson hotel motel sales tax and restaurant tax) are allowed to reduce the amount that they are responsible for collecting for the Tourism Community Enhancement District sales tax by twenty-five percent of any taxes collected pursuant to Sections 94.802 to 94.805, RSMo. (Section 67.1962)
The process for expanding a Tourism Community Enhancement District is explained in Section 67.1965.
The process for repealing the Tourism Community Enhancement District's sales tax and dissolution of the district are explained in Section 67.1968.
.
The governing body of the city with the largest population at inception of the district, is to act as trustee and oversee the dissolution of the district. Any remaining revenue of a dissolved district will be distributed to the school district or districts within the dissolved district.
SECTIONS 67.1922 and 67.1300 : Economic Development Sales Tax:
This act authorizes Taney, Stone, Barry and Ozark counties or the governing body of any county which borders on or contains part of a lake with not less than one hundred miles of shoreline to DESCRIPTION (continued)
enact sales taxes to fund programs that affect Economic Development. Voters may approve up
to a one and one-half percent sales tax. The money collected from the tax will be distributed equally among programs for water quality, infrastructure and tourism. When at least five percent of the voters who voted in the last gubernatorial election sign a petition requesting the repeal of the tax, the question for repealing the tax will be submitted to the voters. Section 67.1300 would allow Caldwell County to seek voter approval to impose a sales tax for economic development purposes.
Section 1- would allow the Platte County Commission to require each contract covering the rental of a motor vehicle which is rented within such county on a short-term basis to provide a box which the renter may use to indicate that a one dollar fee may be added to the contract. The County Commission would need voter approval prior to imposing the fee. The County Collector would collect the fee. All revenues generated by the fee could only be used for tourism purposes.
Section 94.812- Current law prohibits the City of Branson from collecting sales tax on sales of $1 or less. This proposal deletes the prohibitive language.
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 State Treasurer
Department of Natural Resources
Department of Social Services- Division of Family Services
Department of Transportation
Department of Economic Development- Division of Tourism
Department of Revenue
Department of Elementary and Secondary Education
City of Cuba
Stone County Commission
Jeanne Jarrett, CPA
Director
May 29, 2001