Fiscal Note - SB 0044 - Removes Exemption From Boat Sales Tax, Creates Water Safety Fund
L.R. NO. 0471-01
BILL NO. SB 44
SUBJECT: Lakes; Sales Tax; Public Safety
TYPE: Original
DATE: January 13, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Highway Funds ($7,339) $0 $0
Water Safety $0 $500,000 $500,000
General Revenue $388,608 $69,959 $126,954
School District
Trust $441,821 $648,004 $712,805
Conservation $55,228 $81,001 $89,101
Parks & Soils $44,182 $64,800 $71,280
Total Estimated
Net Effect on All
State Funds $922,500 $1,363,764 $1,500,140
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $656,104 $962,286 $1,058,515
FISCAL ANALYSIS
ASSUMPTION
Officials of the Missouri State Water Patrol (MSWP) stated that this proposal
would create the Water Safety Fund. In FY99 and each subsequent fiscal year
for a period of nine years $500,000 would be transferred from the General
Revenue Fund to the Water Safety Fund. MSWP officials assumed that this
proposal would not result in any additional costs to the their agency.
Officials of the Department of Revenue (DOR) reported this proposal would
remove the sales tax exemption and the in-lieu watercraft fee for watercraft
vessels documented with the U.S. Coast Guard effective October 1, 1997, and
mandate the transfer of $500,000 from General Revenue to the "Water Safety
Fund" for ten years beginning in FY99. This transfer would be subject to
action by the General Assembly through the appropriations process.
The Division of Motor Vehicles & Drivers Licensing assumed that forms and
policies would need to be updated. They assumed they would incur $7,339
total costs to Highway Fund associated with printing, postage and forms
revision.
The Information Systems Division would perform all programming changes with
existing personnel and would absorb any additional State Data Center costs
since these are assumed to be minimal.
The Motor Vehicle Bureau reports $69,550,753 in taxable sales of documented
vessels for FY96. In-lieu watercraft fees collected in FY96 were $1,039,650.
Using these figures and applying a growth rate of 10% annually yields the
revenue impact as shown in this response. These figures have been adjusted
for the correct number of months in FY98 and assume a trade-in allowance of
30% will apply to all transactions.
DOR officials assumed that this proposal would have a net gain in total state
revenues.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
( 9 Mo.)
HIGHWAY FUNDS
Cost-Department of Revenue
postage, printing, forms revision ($7,339) $0 $0
WATER SAFETY FUND
.Income to Water Safety Fund
Transfer from General Revenue $0 $500,000 $500,000
ESTIMATED NET EFFECT TO
WATER SAFETY FUND $0 $500,000 $500,000
GENERAL REVENUE FUND
Income to General Revenue Fund
Marine Sales tax $1,325,463 $1,944,013 $2,138,414
1% Collection fee $6,627 $9,720 $10,692
Loss to General Revenue Fund
In-lieu Watercraft fee ($943,482) ($1,383,774) ($1,522,152)
Cost to General Revenue Fund
Department of Revenue
Transfer to Water Safety Fund $0 ($500,000) ($500,000)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND $388,608 $69,959 $126,954
Income to School District Trust Fund
Marine Sales Tax $441,821 $648,004 $712,805
Income to Conservation Fund
Marine Sales Tax $55,228 $81,001 $89,101
Income to Parks & Soil Fund
Marine Sales Tax $44,182 $64,800 $71,280
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
( 9 Mo.)
Income to Cities
Marine Sales Tax $437,403 $641,524 $705,677
Income to Counties
Marine Sales Tax $218,701 $320,762 $352,838
ESTIMATED NET EFFECT TO
LOCAL FUNDS $656,104 $962,286 $1,058,515
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would remove the "in-lieu watercraft fee" for vessels
documented with the United States Coast Guard and subject those vessels to
sales tax. This proposal would also create the "Water Safety Fund" and
mandate the transfer of $500,000 from General Revenue beginning in FY 99 and
continuing for nine fiscal years.
This proposal has an effective date of October 1, 1997.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space. This proposal would affect total state revenues.
SOURCES OF INFORMATION
Department of Public Safety - Missouri State Water Patrol
Department of Revenue
This Fiscal Note is not an official copy and should not be quoted or cited.