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 0075 - Exempts several items from sales and use tax; allows tax credit for contributions to a scholarship charity
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 0577-03
BILL NO.: Perfected SS for SCS for SB's 75, 381 and 204
SUBJECT: Taxation and Revenue-General-Sales and Use; Television: Revenue Dept.
TYPE: Original
DATE: April 26, 1999
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| General Revenue | ($2,250,044) | ($2,401,229) to ($7,401,229) | ($2,378,078) to ($7,378,078) |
| Water Safety | $500,000 | $500,000 | $500,000 |
| School District Trust | ($513,555) | ($567,683) | ($567,683) |
| Conservation | ($64,195) | ($70,961) | ($70,961) |
| Parks and Soil | ($51,355) | ($56,768) | ($56,768) |
| Partial Estimated
Net Effect on All State Funds* |
($2,379,149) | ($2,596,641) to ($7,596,641) | ($2,573,490) to ($7,573,490) |
*The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect to State Funds. Such amounts are expected to exceed $1,000,000 annually.
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 16 pages.
|
PARTIAL ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| Local Government* | ($770,332) | ($851,524) | ($851,524) |
FISCAL ANALYSIS
ASSUMPTION
SECTION-67.1720-County Option Sales tax on Phosphorus
Officials of the Department of Revenue (DOR) assumes there would be fiscal impact to their department. Officials stated that this legislation will require a large number of programming changes because it is a tax on a specific product, in a specific area rather than a general state or county wide tax on all products. Certain businesses will have to be identified and coded to pay this tax and those codes remembered by our computer. Such businesses will also have certain locations that are taxable and others that may not be taxable. Officials estimate they would need 2 FTE. Officials assume they would need 2.00 Tax Processing Technologist I to supervise programming functions and sales tax registration. DOR officials estimate salaries for 10 months of FY2000 at $33,640, $41,377 in FY2001 and $42,412 in FY2002.
Fringe benefits total $10,055 in FY2000, $12,368 in FY2001, and $12,677 in FY2002.
Officials stated there would be one-time costs of $41,535 for computer usage for testing and implementing this new system, and overtime costs of $5,230.
Officials stated the number of additional local sales taxes that would be imposed is unknown; therefore, the amount of revenue that would be collected and the 1% collection fee that would be deposited to the General Revenue Fund is unknown.
LOCAL GOVERNMENT
Oversight assumes local governments that would impose a sales tax on certain products, at a rate not in excess of 1%, for the purpose of improved treatment of wastewater and water pollution abatement, including establishment and maintenance of wastewater treatment facilities would have costs of an election, and water pollution programs. Annual income and costs cannot be determined and will be shown as unknown. Oversight assumes annual costs would not exceed annual income resulting in either a net zero or positive fund balance. Fiscal impact will be shown as zero or a positive fund balance to local governments.
ASSUMPTION (continued)
SECTION-136.300-Burden of Proof
Officials of the Department of Revenue (DOR) state this portion of the proposal would place the ultimate burden of proof on the taxing authority. The impact of this proposal is a negative unknown, but is expected to exceed $100,000 annually.
SECTION-144.010-Sales tax exemption for Research
Officials of the Department of Revenue (DOR) state this legislation provides a sales tax exemption for research or experimentation activities and defines a research or experimentation activity. It is not anticipated that the Department of Revenue would be impacted by this legislation, but the revenue impact would be an unknown loss to state and local sales tax funds.
According to the 1998 U.S. Statistical Abstract table No. 991, Missouri represents approximately 1.32% of R&D Industry expenditures. Table No. 1000 captures 1995 R&D Scientists and Engineers-Employment and Cost, by Industry. Using this data, Oversight estimates the taxable receipts of research and development in Missouri to be approximately $31,847,798 annually.
SECTION-144.014-Definition of Food for Sales tax purposes
Officials of the Department of Revenue (DOR) and Office of Administration state this legislation simplifies the definition of food for sales tax purposes. It somewhat narrows the definition, but should simplify the application of the exemption.
REVENUE IMPACT: DOR staff state that there may be a slight increase in State Revenues because the exemption is narrowed in a very minor fashion. This amount is unknown.
ADMINISTRATIVE IMPACT: The new definition of food would exclude some and may even add others to the list of those able to sell food tax exempt. To accommodate this change, modifications to DOR's MITS/MOST computer programs would be necessary. This would require 363 overtime programming hours at a cost of $4,524 and the State Data Center would charge $2,363 for program change time and test time.
ASSUMPTION (continued)
SECTION-144.030-Various sales tax exemptions
2 (2)-Officials of the Department of Revenue (DOR) state this legislation would exempt coke, coke breeze and reagents, which are ingredients of steel or lead products and would also provide a sales tax exemption for timber production equipment including transportation equipment. DOR
staff state this portion of the proposal would not fiscally impact their agency.
DOR staff state the revenue impact of this portion of the proposal is an unknown loss expected to exceed $100,000 annually.
2 (37)-Officials of the Department of Revenue (DOR) state this legislation exempts sales tax on hotel rooms if rented over 30 days. The revenue impact would be negative, unknown and expected to exceed $100,000 annually.
2 (38)-Officials of the Department of Conservation, Department of Agriculture and the Department of Revenue state this proposal would not administratively impact their agencies. This legislation exempts certain bird hunting fees and certain purchases of feed and equipment for birds. Officials of these agencies assume the revenue impact of this proposal is a minimal unknown loss to state and local sales tax funds.
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.
SECTION-144.051-Sales tax exemption on Broadcasting Equipment
Officials of the Department of Revenue (DOR) state this legislation provides for a state and local sales tax exemption on new broadcasting equipment purchased by radio and TV stations. This exemption includes digital type equipment that will be purchased as a result of a federal mandate. Information received from the Missouri Broadcasters Association indicates 28 TV stations and 225 radio stations are affected by this mandate.
The Missouri Broadcasters Association has furnished information to the Department of Revenue indicating that the conversion of broadcast signals from analog to digital will occur in phases over a period of 15 years. New digital equipment will be purchased in two phases during the first 10 years of the period. Phase one is year 1 thru 3 and phase 2 is years 4 thru 10. Since this fiscal note covers only the first phase DOR will not address phase 2. The Missouri Broadcasters Association provided the following information:
ASSUMPTION (continued)
Projected purchases per TV Station $2,000,000
Times 28 Stations $56,000,000
Projected purchases per Radio Station $75,000
Times 225 Stations $16,875,000
Purchases subject to Sales tax absent the exemption $72,875,000
Times 4.225% State Sales Tax Rate $3,078,968
Times 1.775% approx. Local Rate $1,293,531
Total projected Sales Tax loss during phase 1 $4,372,499
Since phase one covers 3 years each year is assumed to be equal so
$4,372,499 / 3 is $1,457,499. The projected State and Local loss of
Sales Tax revenue is $1,457,499 per year for the first 3 years of this project.
Also since DOR does not know if all of this equipment will be purchased
the first year or the third DOR has not applied any growth rate factors.
Oversight assumes the average local sales tax rate would be 1.5 cents. With 60% of the 1.5 cents going to cities and 40% of the 1.5 cents going to county government.
SECTION-144.190-EEDP 2% Discount
Officials of the Department of Revenue (DOR) state this legislation allows taxpayers on the electrical energy direct pay authorization to take the 2% discount. DOR staff state this proposal would not fiscally impact their agency. DOR staff state that their approximately 72 accounts that would benefit from this proposal. DOR staff estimate that the 2% discount would allow those taxpayers to retain approximately $500 per account.
SECTION-144.518-Exempts parts for Vending Machines from sales tax
Officials of the Department of Revenue (DOR) state this legislation exempts the sale of vending machines and coin operated amusement devices and their related parts. DOR staff state this proposal would not fiscally impact their agency. DOR staff state the revenue impact of this proposal is unknown.
Oversight estimates the revenue loss from this proposal would exceed $1 million annually for
ASSUMPTION (continued)
state funds and approximately $350,000 for local funds. This estimate is based on one distributor of vending machines stating that they pay approximately $360,000 in sales tax annually. These amounts will not be included in the fiscal impact estimates. Oversight has footnoted the affected funds.
SECTION-144.605-Definition of Storage exemption
Officials of the Department of Revenue (DOR) state this legislation codifies the temporary storage exemption/exclusion that has already been recognized by DOR on an administrative basis. DOR staff state no administrative impact from this proposal and since this exemption/exclusion is already recognized, no revenue impact is forecast.
Oversight, for purposes of this fiscal note, assumes the fiscal impact of this portion of the proposal would be zero.
SECTION-306.017-Water Safety Fund
The Department of Revenue (DOR) assumes this portion of the proposal provides that $500,000 shall be transferred annually from the General Revenue Fund to the Water Safety Fund each year for ten years.
SECTION-1-Sales tax refunds directly to purchasers:
The Department of Revenue (DOR) state this portion of the proposal would allow sales tax refunds directly to purchasers. This proposal would be very troublesome to DOR since they do not keep a record of which customer paid what amount of sales tax to a seller/retailer. Without a very expensive system to track this information duplicate or erroneous refunds are a distinct possibility. To implement this proposal would require a very expensive integrated tax system and would complicate return preparation for almost all taxpayers.
Oversight assumes an unknown cost to General Revenue Fund for DOR implementation expenses.
SECTION-2-Exempts airline food from sales tax:
Officials of the Department of Revenue (DOR) state this portion of the proposal would have no administrative impact on their agency and the revenue impact is unknown but very small and less than $100,000 annually.
ASSUMPTION (continued)
These amounts will not be included in the fiscal impact estimates. Oversight has footnoted the affected funds.
SECTION-3-Scholarship Charity tax credit
Officials of the Department of Economic Development (DED) state this portion of the proposal requires DED to approve 501 c(3) organizations as Scholarship charities, allocate credits to these entities and approve tax credits of $5 million per year. The credit is given to individuals and businesses that donate to the charities and they are allowed a 50% credit which can be carried forward 4 subsequent years if unused. DED is to establish a procedure to reallocate unused credits as well as a procedure to notify the general public of organizations that are approved as Scholarship charities. DED will have to audit the charities to insure that funds are used appropriately for scholarships and that they are not directed to the donors children.
DED assumes that the $5 million in credits would be issued each year. DED would request one Economic Development Coordinator at range 26 step L - $36,888 and one Auditor I at range 21 step L - $30,060 to administer the program and conduct audit activities.
Department of Revenue (DOR) officials state the number of taxpayers eligible for this credit is unknown at this time. The Division of Taxation and Collection would need one (1) Tax Processing Technician I for every 3,680 credits claimed per year. One (1) Tax Processing Technician I would be needed for every 20,000 additional income tax errors and one (1) Tax Processing Technician I for every 12,000 additional corporate tax errors generated from this proposal.
DOR state the proposal would require modifications to the income tax system and credit application system. The Division of Taxation and Collections estimates the modifications, including programming changes, would require 692 hours of overtime at a cost of $20,808. Modifications to the income tax return and schedules would be completed with existing resources. State Data Center charges would increase due to the additional storage and fields to be captured. Funding in the amount of $4,503 would be requested for implementation costs.
Officials from the Office of Administration (COA) state there is no data available that would indicate how much would be donated under this proposal. COA assumes the amount of credits is capped at $5 million per fiscal year. COA ranges the fiscal impact from $0 to ($5,000,000) annually.
ASSUMPTION (continued)
SECTION-3.1 (1)-Contract Audits
Officials from the Department of Revenue (DOR) state this to be a political subdivision issue and forecasts no impact from an administrative or revenue standpoint.
Oversight, for purposes of this fiscal note, assumes the fiscal impact of this portion of the proposal would be zero.
This proposal would result in a decrease in Total State Revenues.
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Income to General Revenue Fund | |||
| From 1% Collection Fee (Phosphorus) | Unknown | Unknown | Unknown |
| Income to General Revenue Fund | |||
| Sales tax on food charged at a higher rate | |||
| for certain establishments | unknown | unknown | unknown |
| Cost to Department of Revenue (DOR) | |||
| Personal Service(2 FTE) | ($33,640) | ($41,377) | ($42,412) |
| Fringe Benefits | ($10,055) | ($12,368) | ($12,677) |
| Expense (one-time) | ($41,535) | $0 | $0 |
| Equipment | $0 | $0 | $0 |
| Overtime | ($5,230) | ($5,230) | ($5,230) |
| Administrative Costs DOR | ($90,460) | ($58,975) | ($60,319) |
| Cost to General Revenue Fund | |||
| Department of Revenue (DOR) | |||
| Expense and Equipment | ($6,887) | $0 | $0 |
| Reprogramming costs(Scholarship charity) | $0 | ($27,391) | $0 |
| Sales tax refunds directly to purchasers | (unknown) | (unknown) | (unknown) |
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (Continued) | (10 Mo.) | ||
| Loss to General Revenue Fund | |||
| Burden of Proof | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Research and Experimentation | ($796,195) | ($955,434) | ($955,434) |
| Sales tax exemption for | |||
| Broadcast equipment | ($728,750) | ($728,750) | ($728,750) |
| 2% Discount for EEDP | ($15,721) | ($18,865) | ($18,865) |
| Transfer to Water Safety Fund | ($500,000) | ($500,000) | ($500,000) |
| Income tax credits for scholarships | $0 | $0 to | $0 to |
| ($5,000,000) | ($5,000,000) | ||
| Cost to General Revenue Fund | |||
| Department of Economic Development (DED) | |||
| Personal Service (2 FTE) | ($57,162) | ($70,337) | ($72,096) |
| Fringe Benefits | ($17,469) | ($21,495) | ($22,033) |
| Expense and Equipment | ($37,220) | ($19,982) | ($20,581) |
| Total Administrative Costs DED | ($111,851) | ($111,814) | ($114,710) |
| PARTIAL NET EFFECT ON | |||
| GENERAL REVENUE FUND* | ($2,401,229) | ($2,378,078) | |
| to | to | ||
| ($2,250,044) | ($7,401,229) | ($7,378,078) | |
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (Continued) | (10 Mo.) | ||
| *Partial effect to General Revenue Fund does not include income from 1% collection fee or the sales tax on food. The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect to General Revenue Fund. Such amounts are expected to exceed $1,000,000 annually. | |||
| WATER SAFETY FUND | |||
| Income - Water Patrol | |||
| Transfer from General Revenue Fund | $500,000 | $500,000 | $500,000 |
| Loss to School District Trust Fund | |||
| Sales tax exemption for | |||
| Research and Experimentation | ($265,398) | ($318,478) | ($318,478) |
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Broadcast equipment | ($242,917) | ($242,917) | ($242,917) |
| 2% Discount for EEDP | ($5,240) | ($6,288) | ($6,288) |
| PARTIAL NET EFFECT ON | |||
| SCHOOL DISTRICT TRUST FUND* | ($513,555) | ($567,683) | ($567,683) |
| *The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect on School District Trust Fund. | |||
| Loss to Conservation Fund | |||
| Sales tax exemption for | |||
| Research and Experimentation | ($33,175) | ($39,810) | ($39,810) |
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (Continued) | (10 Mo.) | ||
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Broadcast equipment | ($30,365) | ($30,365) | ($30,365) |
| 2% Discount for EEDP | ($655) | ($786) | ($786) |
| PARTIAL NET EFFECT ON | |||
| CONSERVATION FUND* | ($64,195) | ($70,961) | ($70,961) |
| *The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect on Conservation Fund. | |||
| Loss to Parks and Soil Funds | |||
| Sales tax exemption for | |||
| Research and Experimentation | ($26,540) | ($31,848) | ($31,848) |
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Broadcast equipment | ($24,291) | ($24,291) | ($24,291) |
| 2% Discount for EEDP | ($524) | ($629) | ($629) |
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (Continued) | (10 Mo.) | ||
| PARTIAL NET EFFECT ON | |||
| PARKS AND SOIL FUNDS* | ($51,355) | ($56,768) | ($56,768) |
| *The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect on Parks and Soil Funds. | |||
| FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| Loss to Cities | |||
| Sales tax exemption for | |||
| Research and Experimentation | ($238,858) | ($286,630) | ($286,630) |
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Broadcast equipment | ($218,625) | ($218,625) | ($218,625) |
| 2% Discount for EEDP | ($4,716) | ($5,659) | ($5,659) |
| COUNTIES | |||
| Income to Counties* * | |||
| From local wastewater | |||
| treatment sales tax (Phosphorus) | Unknown | Unknown | Unknown |
| Cost to Counties* * | |||
| For wastewater | |||
| treatment programs (Phosphorus) | (Unknown) | (Unknown) | (Unknown) |
| **Oversight assumes costs of waste water treatment programs would not exceed income resulting with either a zero or positive fund balance. Portions of this proposal is permissive and would require voter approval before counties would realize fiscal impact. | |||
| FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
| (Continued) | (10 Mo.) | ||
| Loss to Counties | |||
| Sales tax exemption for | |||
| Research and Experimentation | ($159,239) | ($191,087) | ($191,087) |
| Sales tax exemption for | |||
| Coke and Timber production | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Hotel rooms | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Certain game birds | (unknown) | (unknown) | (unknown) |
| Sales tax exemption for | |||
| Broadcast equipment | ($145,750) | ($145,750) | ($145,750) |
| 2% Discount for EEDP | ($3,144) | ($3,773) | ($3,773) |
| PARTIAL NET EFFECT TO | |||
| LOCAL GOVERNMENT* | ($770,332) | ($851,524) | ($851,524) |
| *The unknown revenue losses due to the various sales and use tax exemptions are not reflected in the partial net effect to Local Government. Such amounts are expected to exceed $350,000 annually. | |||
| FISCAL IMPACT - Small Business | |||
| Small businesses could be impacted by this proposal. | |||
DESCRIPTION
SECTION-67.1720-County Option Sales tax on Phosphorus
This act authorizes an optional county sales tax on the sale of non-agricultural products containing phosphorus at the retail level. Any county, by majority vote of the county, may levy up to a one-percent sales tax at retail on all products containing at least 0.1% elemental phosphorus by weight, except that fertilizers used for agricultural production are exempted.
A county shall use the funds for wastewater treatment or water pollution abatement. The funds may be used as matching funds for obtaining any grants or loans administered by the Clean Water Commission pursuant to chapter 644, RSMo.
Revenues collected by the Director of Revenue on behalf of a county shall be placed in a separate fund and returned each month to the county where collected.
SECTION-136.300-Burden of Proof
Shifts burden of proof to the taxing authority.
SECTION-144.010-Sales tax exemption for Research
This act defines, for purposes of sales and use tax, "research and experimentation activities" and then exempts from tax the sale of tangible personal property for use or consumption directly or predominantly in those activities.
SECTION-144.014-Definition of Food for Sales tax purposes
This act excludes from the definition of food, for purposes of the reduced sales tax rate, food or drink where the gross receipts of selling that food constitutes more than eighty percent of the total gross receipts of that establishment. Food sold in establishments in which the gross receipts from food is under eighty percent, and food sold in vending machines, would be subject to the lower sales tax rate.
SECTION-144.030-Various Sales tax exemptions
2 (2)-This act exempts from sales and use tax sales of coke, coke breeze, and reagents which become ingredient or component parts in steel or lead products. And also provides a sales tax exemption for timber production equipment including transportation equipment.
2 (37)-Exempt sales tax on hotel rooms if rented over 30 days.
2 (38)-This bill exempts from state and local sales and use taxes all admission fees charged for the hunting and taking of certain game birds on licensed shooting areas and all sales of feed and equipment used in the production of certain game birds by licensed wildlife breeders.
DESCRIPTION (Continued)
SECTION-144.051-Sales tax exemption on Broadcasting Equipment
This act exempts from state and local sales and use tax purchases of equipment by a federally licensed commercial or public broadcast station if the purchase is made as a result of a federal mandate and resulting technological change.
SECTION-144.190-EEDP 2% Discount
Under current law, businesses which have annual purchases subject to state and local sales and use tax may remit the taxes directly through agreements with the Department of Revenue. The businesses under the agreements are not allowed to retain 2% of the taxes for administrative purposes as is allowed for normal retailers. This bill allows the businesses subject to direct pay agreements to retain 2% of the tax they remit.
SECTION-144.518-Exempts parts for Vending Machines from sales tax
This act exempts from sales and use tax sales of machines and parts used in commercial, coin-operated amusement and vending businesses if sales tax is paid on the gross receipts
from the machines.
SECTION-144.605-Storage Exemption
Under current law, storage of tangible personal property is exempt from state and local use tax. This bill expands the definition of storage to include property stored in the state for subsequent use solely outside the state.
SECTION-306.017-Water Safety Fund
This portion of the proposal creates the Water Safety Fund. This proposal provides that $500,000 shall be transferred annually from the General Revenue Fund to the Water Safety Fund each year for ten years, though spending is subject to appropriation. This section of the proposal has an effective date of October 1, 1999.
SECTION-1-Sales tax refunds directly to purchasers
This portion of the proposal allows a sales tax refund directly to the purchaser if the refund is not requested by the person collecting and remitting the tax.
SECTION-2-Exempts airline food from sales tax
This portion of the proposal would exempt airline food from sales tax.
SECTION-3-Scholarship Charity tax credit
This proposal would authorize a state income tax credit for donations to scholarship charities, as determined by this proposal. A scholarship charity is a tax-exempt charitable organization which
DESCRIPTION (Continued)
would allocate at least 90% of its annual revenue for scholarships to children to allow them to attend a public or non-discriminatory private elementary or secondary school. The credit would not be refundable, but may be carried forward and applied to future tax liabilities for up to four years. The total annual amount of credits would be limited to $5 million. The Director of the Department of Economic Development would determine which organizations qualify as scholarship charities. Credits would be allocated equally at the beginning of each year to all scholarship charities and those not used by a date determined under rules of the Director may be reallocated by the Director to ensure the maximum amount of credits are used each year.
SECTION-3.1 (1)-Contract audits
This bill prohibits the state, any county, or any other political subdivision from entering into a contract or arrangement for the examination of a taxpayer's books and records if the compensation for the service is contingent upon or otherwise related to the amount of tax, interest, court cost, or penalty assessed or collected from the taxpayer.
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
Office of Administration-Budget and Planning
Department of Conservation
Department of Agriculture
Jeanne Jarrett, CPA
Director
April 26, 1999