SB 0630 - Fiscal Note

Fiscal Note - SB 0630 - Repeals boat sales tax exemption and creates Water Safety Fund

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2867-01

BILL NO. SB 630

SUBJECT: Boats and Watercraft; Water Patrol; Taxation and Revenue-Sales and Use; Appropriations

TYPE: Original

DATE: February 2, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Water Safety	$500,000	$500,000	$500,000
General Revenue	($78,272)	$126,954	$189,650
School District Trust	$486,003	$712,805	$784,085
Conservation	$60,750	$89,101	$98,011
Parks and Soil	$48,600	$71,280	$78,409
Total Estimated Net Effect on All State Funds	$1,017,081	$1,500,140	$1,650,155

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$721,715	$1,058,515	$1,164,366

FISCAL ANALYSIS

ASSUMPTION

Department of Revenue (DOR) officials report this proposal would remove the sales tax exemption for watercraft vessels documented with the U.S. Coast Guard, remove the in-lieu watercraft fee and mandate the transfer of $500,000 from General Revenue to the "Water Safety Fund" beginning in FY 1999 and continuing for ten years thereafter, for use by the Missouri State Water Patrol. This proposal has an effective date of October 1, 1998.

ADMINISTRATIVE IMPACT:

Division of Motor Vehicles and Drivers Licensing:

Forms and policies would need to be updated.

Information Systems Division:

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.

REVENUE IMPACT:

The Motor Vehicle Bureau reports $69,550,753 in taxable sales for FY 96. In-lieu watercraft fees collected in FY 96 were $1,039,650. Using these figures and applying a growth rate of 10% annually yields the revenue impact as shown in this fiscal note. These figures have been adjusted for the correct number of months in FY 99 and assume a trade-in allowance of 30% would apply to all transactions.

Officials of the Missouri State Water Patrol report that this proposal would not create additional costs for their agency.

This proposal would result in an increase in Total State Revenues.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(9 Mo.)
Income to Water Safety Fund
Transfer from General Revenue	$500,000	$500,000	$500,000
ESTIMATED NET EFFECT TO
WATER SAFETY FUND	$500,000	$500,000	$500,000
Income to General Revenue Fund
Marine Sales tax	$1,458,010	$2,138,414	$2,352,256
1% Collection fee	$7,290	$10,692	$11,761
Loss to General Revenue Fund
In-lieu Watercraft fee	($1,037,831)	($1,522,152)	($1,674,367)
Cost to General Revenue Fund
Department of Revenue
Expense & Equipment	($5,741)	$0	$0
Transfer to Water Safety Fund	($500,000)	($500,000)	($500,000)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND	($78,272)	$126,954	$189,650
Income to School District Trust Fund
Marine Sales Tax	$486,003	$712,805	$784,085
Income to Conservation Fund
Marine Sales Tax	$60,750	$89,101	$98,011
Income to Parks & Soil Fund
Marine Sales Tax	$48,600	$71,280	$78,409
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(9 Mo.)
Income to Cities
Marine Sales Tax	$481,143	$705,677	$776,244
Income to Counties
Marine Sales Tax	$240,572	$352,838	$388,122
ESTIMATED NET EFFECT TO
LOCAL FUND	$721,715	$1,058,515	$1,164,366
FISCAL IMPACT - Small Business

Small businesses would be expected to be fiscally impacted to the extent that they were exempt from state sales tax for coast guard registered vessels.

DESCRIPTION

This act repeals the exemption from state sales taxes for coast guard registered vessels,

and it creates a Water Safety Fund. $500,000 shall be placed in the Water Safety Fund for each

of the next 10 fiscal years, though spending is subject to appropriation. It has an effective date of

October 1, 1998.

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

Missouri State Water Patrol

Jeanne Jarrett, CPA

Director

February 2, 1998