COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 2462-05
Bill No.: SB 1134
Subject: Taxation and Revenue - General and Sales, Law Enforcement; Drugs and Controlled Substances
Type: Original
Date: February 26, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| General Revenue | Unknown to ($310,547) | Unknown to ($60,264) | Unknown to ($61,777) |
| School District Trust | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
Unknown to ($310,547) |
Unknown to ($60,264) |
Unknown to ($61,777) |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Local Government | Unknown | Unknown | Unknown |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 5 pages.
ASSUMPTION
Officials of the Department of Revenue (DOR) state this legislation requires DOR to create tax stamps for controlled substances (marijuana). It also requires DOR to assess taxpayers who fail to pay the tax due. The ongoing work with various law enforcement agencies will consume most of the FTE's time.
The selling of the stamps for controlled substances can be handled with existing resources. The administrative impact for the Division of Taxation and Collection will be the assessment of the tax when DOR becomes aware of a dealer not paying tax. DOR assumes Business Tax will need 2 Tax Processing Tech I 's to handle the assessments, the inquiries, the follow up and tracking, as well as continually work with law enforcement agencies.
A complete new system will need to be developed to track the tax due, produce assessments, age the delinquency, etc, and a complete system test. DOR estimates that the above changes will require 6,228 hours of programming at an estimated cost of $207,766. The State Data Center cost to implement the proposed legislation will be $40,530.
Officials of the Office of Administration, Division of Budget and Planning, Attorney General's Office, Department of Public Safety, Missouri State Water Patrol, Missouri State Highway Patrol, State Treasurer, Department of Mental Health, Missouri National Guard, Office of Prosecution Services and State Public Defender assume this legislation would not fiscally impact their agencies.
Secretary of State (SOS) officials state this bill creates a stamp tax on controlled substances. The Department of Revenue will 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 12 pages in the Code of State Regulations. For any given rule, roughly half again as many pages are published in the Missouri Register in the Code because cost statements, fiscal notes and the like are not repeated in Code. These costs are estimated to be $738 for FY03. 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. The actual cost 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 appropriations process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
ASSUMPTION (continued)
Officials from the Sheriff Offices of Boone, Greene and Jackson; and the St. Louis County Police Department did not respond to our fiscal note request.
This proposal could increase Total State Revenues.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| GENERAL REVENUE | |||
| Income - General Revenue Fund | |||
| Controlled Substances Stamp Tax | Unknown | Unknown | Unknown |
| Cost - Department of Revenue | |||
| Personal Service | ($35,320) | ($43,444) | ($44,530) |
| Fringe Benefits | ($12,719) | ($15,644) | ($16,035) |
| Expense and Equipment | ($14,212) | ($1,176) | ($1,212) |
| Programming | ($248,296) | $0 | $0 |
| Total Costs - DOR | ($310,547) | ($60,264) | ($61,777) |
| Transfer Out - Schools Money Fund | |||
| 50% of Stamp Tax Revenue | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND |
UNKNOWN to ($310,547) |
UNKNOWN to ($60,264) |
UNKNOWN to ($61,777) |
| SCHOOL DISTRICT TRUST FUND | |||
| Transfer In - School Moneys Fund | |||
| 50% of Stamp Tax Revenue | Unknown | Unknown | Unknown |
| Transfer Out - to Local School Districts | |||
| 50% of Stamp Tax Revenue | (Unknown) | (Unknown) | (Unknown) |
| TOTAL ESTIMATED NET EFFECT ON SCHOOL DISTRICT TRUST FUND |
$0 |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| Income - Local Schools | |||
| 50% of Stamp Tax Revenue | Unknown | Unknown | Unknown |
| Income - Local Law Enforcement | |||
| Controlled Substances Stamp Tax | Unknown | Unknown | Unknown |
| TOTAL ESTIMATED NET EFFECT ON VARIOUS LOCAL FUNDS |
UNKNOWN |
UNKNOWN |
UNKNOWN |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This act requires all controlled substances present in the state to have tax stamps affixed. The Director of the Department of Revenue shall issue these stamps. The person purchasing the stamps may do so anonymously. The value of the stamp that must be affixed varies among the type and form of the controlled substance.
Neither the Director of Revenue may reveal any information gathered in the assessment process, nor may that information be used in a criminal proceeding.
Anyone in possession of a controlled substance that does not have a stamp affixed will be subject to an assessment and applicable penalties and statutory interest. Failure to pay an assessment may result in seizure and sale of property by the Department of Revenue.
Half of all revenue gained from the tax stamps will be deposited in general revenue, with one-half of that amount to be appropriated to fund the foundation formula. The other half of the revenue raised through assessment and delinquent taxes will be sent to the law enforcement agencies that participated in the investigation.
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
Attorney General's Office
Department of Public Safety
Missouri State Water Patrol
Missouri State Highway Patrol
State Treasurer
Secretary of State
Department of Mental Health
Missouri National Guard
Office of Prosecution Services
State Public Defender
NOT RESPONDING: Sheriff Offices of Boone, Greene, Jackson
St. Louis County Police Dept.
Mickey Wilson, CPA
Acting Director
February 26, 2002