Fiscal Note - SB 0403 - Allows Resident Income Taxpayers Meeting Certain Income Guidelines to Take a $25 Per Dependent Tax Credit
L.R. NO. 1599-01
BILL NO. SB 403
SUBJECT: Taxation and Revenue: Income
TYPE: Original
DATE: February 20, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($1,440,382) ($15,394,808) ($15,425,598)
Total Estimated
Net Effect on All
State Funds ($1,440,382) ($15,394,808) ($15,425,598)
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 $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue (DOR) state this legislation would
require modifications to the individual income tax system, forms, schedules
and add additional information to be key entered. The income tax system
modifications and form/schedule revisions will be handled by existing
staff/resources. The Information Systems Division would request one Data
Entry Operator II for six months of each tax processing year to key the
additional data that is needed to process this credit.
Oversight assumes for purposes of this fiscal note that the Information
Systems Division could handle the volume of work created by this proposal
with existing resources.
Officials of the Office of Administration (COA) assume this proposal would
allow a $25 tax credit per dependent, subject to income guidelines. COA staff
assumed that the tax credit would also be refundable. COA staff assumed that
this proposal would have an estimated impact of approximately $0 in FY98,
($15,394,808) in FY99 and ($15,425,598) in FY2000. COA staff assume that
taxpayers will not adjust their withholding in FY98 to take advantage of the
dependent credit. The estimate is based on the number of qualifying
dependents from Budget and Planning's individual income tax simulator and
population projections from the State Demographer.
Oversight estimates a loss to General Revenue of $1,440,382 for FY 1998 due
to the possibility of reduced withholding and estimated income tax payments
for five months of calendar year 1998. Oversight assumes 25% of taxpayers
would adjust payments, however, it should be noted that this amount could be
less, depending on taxpayers' awareness of the tax credit and their desire to
adjust tax withholdings or estimated payments.
This proposal would result in a decrease in Total State Revenues since the
Individual Income tax collections are included in the calculation of Total
State Revenue.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(6 Mo.)
Loss to General Revenue Fund
Additional tax credit per Dependent ($1,440,382)($15,394,808)($15,425,598)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND ($1,440,382)($15,394,808)($15,425,598)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(6 Mo.)
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 proposal would allow resident income taxpayers a $25 tax credit per
dependent, subject to income guidelines.
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
This Fiscal Note is not an official copy and should not be quoted or cited.