This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0724 - Earmarks estimated income tax revenue on nonresident athletes and entertainers to certain funds
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 3166-06
BILL NO. Truly Agreed and Finally Passed HCS for SS for SB 724
SUBJECT: Taxation and Revenue-Income: Sports and Amusements
TYPE: Original
DATE: May 5, 1998
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS Net Effect on All State Funds *Monies deposited in the Missouri Investment Trust Fund shall remain in the fund until January 2,
2009. ESTIMATED NET EFFECT ON FEDERAL FUNDS Net Effect on All Federal Funds
FUND AFFECTED
FY 1999
FY 2000
FY 2001 General Revenue
$0
($4,754,800)
($4,992,540) Missouri Arts Council
Trust
($14,000,000)
$950,960
$998,508 Missouri Humanities
Council Trust
($215,000)
$950,960
$998,508 Missouri Investment Trust
*
$14,215,000
$0
$0 Missouri State Library
Networking
$0
$950,960
$998,508 Missouri Public Television
Broadcasting Corporation
Special
$0
$950,960
$998,508 Missouri Historical
Preservation Revolving
$0
$950,960
$998,508 Total Estimated
$0
$0
$0
FUND AFFECTED
FY 1999
FY 2000
FY 2001 None
Total Estimated
$0
$0
$0
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 6 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue assumed that this proposal would have no fiscal impact to their agency.
Officials of the Secretary of State's Office assume that this proposal would result in approximately $950,960 in FY2000 and $998,508 in FY2001 of additional funds from General Revenue to the Missouri State Library Networking Fund.
Officials of the Department of Natural Resources (DNR) assume that the DNR Missouri Historic Preservation Revolving Fund would receive approximately $1,000,000 in FY2000 and $1,050,000 in FY2001 of additional funds from General Revenue as a result of this proposal.
Officials of the Department of Economic Development - Missouri Arts Council (MAC) stated that the 1998 annual estimate of income tax generated from nonresident entertainers and professional athletes was $9,056,766. Assuming a 5% growth rate, the fiscal impact of this proposal would be approximately $4,754,800 and $4,992,540 in FY2000 and FY2001, respectively.
ASSUMPTION (continued)
Oversight assumes that the 1998 annual estimate of income tax generated from nonresident entertainers and professional athletes was $9,056,766 and assuming a 5% growth rate the following annual estimates would apply: 1999 - $9,509,604; 2000 - $9,985,084; and 2001 - $10,484,338. Currently, the Missouri Arts Council Trust Fund receives 50% of the estimated income tax. This proposal would increase that percentage to 60%. The additional 10% deposited in the Missouri Arts Council Trust Fund would be $950,960 in FY2000 and $998,508 in FY2001. It would also distribute 10% each of the estimated income tax, or $950,960 in FY2000 and $998,508 in FY2001, to the following funds outlined in the proposal: Missouri Humanities Council Trust Fund; Missouri State Library Networking Fund; Missouri Public Television Broadcasting Corporation Special Fund; and Missouri Department of Natural Resources Missouri Historical Preservation Revolving Fund. Twenty-five percent of the 10% to Missouri Public Television Broadcasting Corporation Special Fund, or $237,740 in FY2000 and $249,627 in FY2001 would go to Public Radio and the remaining 75% of that amount would go to Public Television, or $713,220 in FY2000 and $748,881 in FY2001. There would be long-term fiscal impact through FY2009 in the form of loss to General Revenue Fund and income to the funds outlined in the proposal for a net fiscal impact to state funds of $0.
Based on information received from the Missouri Arts Council staff, Oversight assumes that the balance at the end of 1998 for the Missouri Arts Council Trust Fund and the Missouri Humanities Council Trust Fund would be conveyed to the Missouri investment trust on January 1, 1999. The Missouri Arts Council Trust Fund balance has been estimated to be $14 million and the Missouri Humanities Council Trust Fund has been estimated to be $215,000 at the end of 1998.
Oversight assumes that this proposal would not have any overall effect on Total State Revenues as it reallocates an existing revenue stream.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Loss-General Revenue Fund Transfers to: | |||
| Missouri Arts Council Trust Fund | $ 0 | ($950,960) | ($998,508) |
| Missouri Humanities Council Trust Fund | $ 0 | ($950,960) | ($998,508) |
| Missouri State Library Networking Fund | $ 0 | ($950,960) | ($998,508) |
| Missouri Public Television Broadcasting | |||
| Corporation Special Fund | $ 0 | ($950,960) | ($998,508) |
| Missouri Historical Preservation Revolving Fund | $ 0 | ($950,960) | ($998,508) |
| Total Loss-General Revenue Fund | $ 0 | ($4,754,800) | ($4,992,540) |
| NET EFFECT TO GENERAL REVENUE FUND | $ 0 | ($4,754,800) | ($4,992,540) |
| MISSOURI ARTS COUNCIL TRUST FUND | |||
| Income-Transfer from General Revenue Fund | |||
| Additional 10% of income tax revenues | $ 0 | $950,960 | $998,508 |
| Loss-Balance Conveyed to | |||
| Missouri Investment Trust | ($14,000,000) | $0 | $0 |
| NET EFFECT TO MISSOURI ARTS | |||
| COUNCIL TRUST FUND | ($14,000,000) | $950,960 | $998,508 |
| MISSOURI HUMANITIES | |||
| COUNCIL TRUST FUND | |||
| Income-Transfer from General Revenue Fund | |||
| 10% of income tax revenues | $ 0 | $950,960 | $998,508 |
| Loss-Balance Conveyed to | |||
| Missouri Investment Trust | ($215,000) | $0 | $0 |
| NET EFFECT TO MISSOURI | |||
| HUMANITIES TRUST FUND | ($215,000) | $950,960 | $998,508 |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (Continued) | (10 Mo.) | ||
| MISSOURI INVESTMENT TRUST | |||
| Income-Balance Conveyed from | |||
| Missouri Arts Council Trust Fund | $14,000,000 | $0 | $0 |
| Income-Balance Conveyed from | |||
| Missouri Humanities Council Trust Fund | $215,000 | $0 | $0 |
| NET EFFECT ON MISSOURI | |||
| INVESTMENT TRUST FUND | $14,215,000 | $0 | $0 |
| MISSOURI STATE LIBRARY | |||
| NETWORKING FUND | |||
| Income-Transfer from General Revenue Fund | |||
| 10% of income tax revenues | $ 0 | $950,960 | $998,508 |
| MISSOURI PUBLIC TELEVISION | |||
| BROADCASTING CORPORATION | |||
| SPECIAL FUND | |||
| Income-Transfer from General Revenue Fund | |||
| 10% of income tax revenues | |||
| Public Television | $ 0 | $713,220 | $748,881 |
| Public Radio | 0 | 237,740 | 249,627 |
| Total Income-Transfer from General Revenue Fund | $ 0 | $950,960 | $998,508 |
| MISSOURI HISTORIC PRESERVATION | |||
| REVOLVING FUND | |||
| Income-Transfer from General Revenue Fund | |||
| 10% of income tax revenues | $ 0 | $950,960 | $998,508 |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 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
Under current law, 50% of the revenues generated from the state income tax on nonresident athletes and entertainers, as estimated by the Commissioner of Administration, is earmarked to the Missouri Arts Council Trust Fund until the year 2004. This proposal increases the percentage to 60% and extends the earmarking to the year 2008. In addition, the proposal earmarks each year the remaining estimated revenue from this tax in 4 equal amounts until the year 2008 to the Missouri Humanities Council Trust Fund, the Missouri State Library Networking Fund, the Missouri Public Television Fund and certain public radio stations qualified by the Corporation for Public Broadcasting, and the Missouri Historical Preservation Revolving Fund. Finally, the proposal requires any person who pays compensation to a nonresident entertainer to deduct, withhold, and remit 2% of the total compensation paid to the Department of Revenue. As authorized pursuant to subsection 2 of section 30.953, RSMo, it is the intention and desire of the general assembly that the state treasurer convey, to the Missouri investment trust on January 1, 1999, up to 100% of the balances of the Missouri arts council trust fund and the Missouri humanities council trust fund. The funds shall be reconveyed to the state treasurer by the investment trust on January 2, 2009.
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
Department of Economic Development
Department of Natural Resources
Office of Secretary of State
Jeanne Jarrett, CPA
Director
May 5, 1998