SB 0715 - Fiscal Note

Fiscal Note - SB 0715 - Exempts adjuvants from sales/use tax, pesticide carriers used to enhance effect of pesticides

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3172-01

BILL NO. SB 715

SUBJECT: Agriculture and Animals; Revenue Dept.; Taxation and Revenue-Sales and Use

TYPE: Original

DATE: February 9, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue	(unknown)	(unknown)	(unknown)
School District Trust	(unknown)	(unknown)	(unknown)
Conservation	(unknown)	(unknown)	(unknown)
Parks and Soil	(unknown)	(unknown)	(unknown)
Total Estimated Net Effect on All State Funds	(expected to exceed $500,000)	(expected to exceed $500,000)	(expected to exceed $500,000)

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

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	(unknown)	(unknown)	(unknown)

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Agriculture and the Missouri Department of Transportation state this proposal would not fiscally impact their agencies.

Officials of the Department of Revenue (DOR) state this proposal would expand the current sales and use tax exemption for pesticides to include adjuvants such as crop oils, surfactants, wetting agents and "other assorted pesticide carriers" used to improve or enhance the effect of pesticides and foam markers used in pesticide application. DOR staff state that this proposal would have a minimal administrative impact on their agency. The revenue impact is unknown.

Oversight assumes this proposal would have a negative unknown impact to the General Revenue Fund, School District Trust Fund, Conservation Fund and Parks & Soil Fund as well as local governments since sales tax revenues would decrease. While data is not available to accurately estimate total affected sales, the 1997 Tax Expenditures Report shows for 1995 expenditures for agricultural pesticides/poisons were $4.8 million. Assuming that adjuvants would makeup 10% of additional expenditures, Oversight assumes that the revenue loss as a result of this proposal would exceed $500,000 annually.

This proposal would result in a decrease in Total State Revenues.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
Loss to General Revenue Fund
Adjuvants Sales Tax Exemption	(unknown)	(unknown)	(unknown)
Loss to School District Trust Fund
Adjuvants Sales Tax Exemption	(unknown)	(unknown)	(unknown)
Loss to Conservation Fund
Adjuvants Sales Tax Exemption	(unknown)	(unknown)	(unknown)
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
(Continued)	(10 Mo.)
Loss to Parks & Soils Fund
Adjuvants Sales Tax Exemption	(unknown)	(unknown)	(unknown)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
Loss to Cities and Counties	(unknown)	(unknown)	(unknown)
FISCAL IMPACT - Small Business

Small businesses would be expected to be fiscally impacted to the extent that they purchase adjuvants for pesticides application. Small businesses could purchase the adjuvants exempt from sales/use tax.

DESCRIPTION

This act clarifies the current exemption from sales and use tax of pesticides to include adjuvants such as crop oils, surfactants, wetting agents, and other pesticide carriers which improve or enhance the effect of a pesticide.

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 Agriculture

Missouri Department of Transportation

Jeanne Jarrett, CPA

Director

February 9, 1998