This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0204 - Repeals boat sales tax exemption and creates Water Safety Fund
SB 204 - Fiscal Note

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 1025-01

BILL NO.: SB 204

SUBJECT: Water Craft Taxes

TYPE: Original

DATE: February 9, 1999

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
General Revenue $72,269 $386,679 $519,680
Conservation Fund $79,829 $122,405 $140,766
School District Trust $638,635 $979,240 $1,126,126
Parks & Soils $63,863 $97,924 $112,612
Water Safety $500,000 $500,000 $500,000
Total Estimated

Net Effect on All

State Funds

 $1,354,596 $2,086,248 $2,399,184



ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
None $0 $0 $0
Total Estimated

Net Effect on All

Federal Funds

 $0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
Local Government $948,372 $1,454,171 $1,672,297



Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

The Department of Revenue (DOR) assumes this proposal eliminates the in lieu tax on water craft and makes them subject to sales and use tax. The proposal also provides that $500,000 shall be transferred annually from the General Revenue Fund to the Water Safety Fund each year for ten years.

The DOR assumes they will need to change procedures in branch offices, and notify approximately 13,000 Boat and Motor Vehicle Dealers of this change. Printing and distribution costs are estimated to be $6,000.

The DOR kept track of the actual sales on vessels to which the In-Lieu-of Tax applied through 1998. The DOR used those sales figures and projected a 15% increase each year to arrive at the sales figures for the fiscal note period. Those sales figures were used to arrive at the sales tax figures, and the In-lieu-of tax was then deducted.

The Department of Public Safety - Water Patrol assumes this proposal would not add any additional duties to the Water Patrol.



FISCAL IMPACT - State Government FY 2000 FY 2001 FY 2002
(9 Mo.)
GENERAL REVENUE FUND
Income
Sales tax $1,915,904 $2,937,719 $3,378,377
Collection fee 1% $9,579 $14,688 $16,891
Loss
In-lieu Water craft fee ($1,347,214) ($2,065,728) ($2,375,588)
Cost - DOR
Printing, postage and forms ($6,000) $0 $0
Transfer to Water Safety Fund ($500,000) ($500,000) ($500,000)
Estimated Net Effect on
GENERAL REVENUE FUND $72,269 $386,679 $519,680
FISCAL IMPACT - State Government FY 2000 FY 2001 FY 2002
(continued) (9 Mo.)
SCHOOL DISTRICT TRUST FUND
Income - Marine Sales tax $638,635 $979,240 $1,126,126
CONSERVATION FUND
Income - Marine Sales tax $79,829 $122,405 $140,766
PARKS & SOILS FUND
Income - Marine Sales tax $63,863 $97,924 $112,612
WATER SAFETY FUND
Income - Water Patrol
Transfer from General Revenue Fund $500,000 $500,000 $500,000
FISCAL IMPACT - Local Government FY 2000 FY 2001 FY 2002
(9 Mo.)
Income - Sales tax
Cities $569,023 $872,503 $1,003,378
Counties $379,349 $581,669 $668,919
$948,372 $1,454,171 $1,672,297
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

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, 1999.

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 9, 1999