COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1847-01
Bill No.: SB 468
Subject: Estates; Wills and Trusts; Revenue Dept.; Taxation and Revenue - Inheritance
Type: Original
Date: March 6, 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 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials of the Department of Revenue (DOR) state this legislation provides for the repeal of the Missouri Estate Tax upon repeal of the Federal Estate Tax. Currently, the Federal Estate Tax has not been repealed. Therefore, there is little or no administrative impact to the Department of Revenue. If the Federal Estate Tax is ever repealed then the Department anticipates a reduction in revenue and a reduction in FTE.
In a similar proposal, officials of the Office of Administration - Division of Budget and Planning (BAP) stated that currently there has been no change to the Federal Estate Tax. Several proposals to eliminate, phase out, or reduce the federal estate tax have been discussed. If the Federal Estate Tax were eliminated Missouri GR revenues would be reduced by $153 million in FY02, $158.4 million in FY03, and $163.9 million in FY04.
Oversight assumes since the tax base for the state estate tax is derived from the Federal Estate Tax Return, Missouri Estate Tax would be eliminated with the elimination of the Federal Estate Tax. Therefore, the revenue impact is shown as zero for this bill. Oversight notes that according to the Tax Expenditure Report for January 2001, the Missouri Estate Tax revenues for FY97-98 were $100,861,000, FY98-99 were $120,579,000, and FY99-00 were $132,750,000. Oversight assumes that the Department of Revenue would experience an administrative savings of approximately 3 FTE and the associated fringe benefits and expense, due to the repeal of the state estate tax. Savings would be approximately $110,000 annually. Oversight assumes both the revenue loss and administrative savings would be as a result of changes to federal law.
Officials of the Secretary of State (SOS) assume this bill repeals the state tax if and when the Federal Estate Tax is repealed. DOR would promulgate rules to implement this bill. Based on experience with other divisions, the rules, regulations and forms issued by the Department of Revenue could require as many as approximately 4 pages in the Code of State Regulations. For any given rule, roughly half again as many pages are published in the Missouri Register as in the Code because cost statements, fiscal notes and the like are not repeated in the Code. These costs are estimated. The estimated cost of a page in the Missouri Register is $23.00. The estimated cost of a page in the Code of State Regulations is $27.00. Costs for this proposal would be $246.00 for FY 2002. The actual costs could be more or less than the numbers given. The impact of this legislation in future years is unknown and depends upon the frequency and length of rules, filed, amended, rescinded or withdrawn.
Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
If the federal estate tax is ever repealed, there will be a decrease in Total State Revenue.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| GENERAL REVENUE FUND | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $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 bill removes any tax imposed on the transfer of a decedent's estate in Missouri if the federal estate tax is repealed. The effective date of this legislation would be the same as the federal effective date.
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
Division of Budget and Planning
Office of the Secretary of State
Jeanne Jarrett, CPA
Director
March 6, 2001