COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION



FISCAL NOTE



L.R. No.: 2796-01

Bill No.: SB 928

Subject: Taxation & Revenue-Sales and Use; Entertainment, Sports & Amusement; Health

Type: Original

Date: January 28, 2002




FISCAL SUMMARY



ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 2003 FY 2004 FY 2005
General Revenue ($3,275,000) ($4,230,000) ($4,530,000)
School District Trust ($1,091,667) ($1,410,000) ($1,510,000)
Conservation ($136,458) ($176,250) ($188,750)
Parks and Soil ($109,167) ($141,000) ($151,000)
Total Estimated

Net Effect on All

State Funds





($4,612,292)
($5,957,250) ($6,379,750)


ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 2003 FY 2004 FY 2005
None
Total Estimated

Net Effect on All

Federal Funds

$0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 2003 FY 2004 FY 2005
Local Government ($1,637,500) ($2,115,000) ($2,265,000)

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 4 pages.

FISCAL ANALYSIS



ASSUMPTION



Officials of the Department of Revenue (DOR) state this bill creates an additional sales tax exemption which will reduce revenue to the state and local government. This legislation would have no administrative impact on DOR.



Officials of the Office of Administration, Budget and Planning (BAP) state this proposal provides a sales tax exemption for specified items and services. Using the U.S. Department of Commerce, Bureau of Economic Analysis, BAP estimates the Missouri consumer spending on the category of items specified in the bill to be $131 million for FY03 and $141 million for FY04. BAP assumes that Missouri accounts for 1.8% of the national totals, which is Missouri's share of U.S. Personal Income. BAP assumes the increase in consumer spending for the years 2001-2004 would be approximately the average of the increase for 1999 and 2000.



Using the information provided by BAP and the U.S. Census Bureau, Statistical Abstract of the United States for 2000, Oversight estimates the state and local revenue loss to be $6.2 million in FY03, $8 million in FY04, and $8.6 million in FY05.



This legislation would decrease Total State Revenue.



FISCAL IMPACT - State Government FY 2003

(10 Mo.)

FY 2004 FY 2005



Loss to State Funds:
General Revenue Fund ($3,275,000) ($4,230,000) ($4,530,000)
School District Trust Fund ($1,091,667) ($1,410,000) ($1,510,000)
Conservation Sales Tax Fund ($136,458) ($176,250) ($188,750)
Parks and Soil Sales Tax Fund ($109,167) ($141,000) ($151,000)
ESTIMATED NET EFFECT ON ALL FUNDS

($4,612,292)


($5,957,250)


($6,379,750)









FISCAL IMPACT - Local Government FY 2003

(10 Mo.)

FY 2004 FY 2005
Loss - Cities

Reduction in sales tax revenue from health & fitness centers





($982,500)




($1,269,000)




($1,359,000)
Loss - Counties

Reduction in sales tax revenue from health & fitness centers





($655,000)




($846,000)




($906,000)
ESTIMATED NET EFFECT ON LOCAL GOVERNMENT

($1,637,500)


($2,115,000)


($2,265,000)



FISCAL IMPACT - Small Business



This proposal would eliminate sales tax on dues to health/fitness centers. While small businesses could benefit from the cost savings, this proposal would not appear to have a substantial impact on small businesses.



DESCRIPTION



This act exempts from state sales taxes certain fees and dues paid to health and fitness centers. Fees and dues paid to health and fitness centers are exempt if they are paid solely for health-benefit activities; are separately stated on the bill; and do not include dues or fees for any other activities or services.



The act defines the term "health-benefit activities" and enumerates certain activities which either qualify or do not qualify as a "health-benefit activity".



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

Budget and Planning

U.S. Census Bureau

Statistical Abstract of the United States (2000)









Mickey Wilson, CPA

Acting Director

January 28, 2002