COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 0739-01
Bill No.: SB 211
Subject: Taxation and Revenue - Sales and Use; Prisons and Jails
Type: Original
Date: February 4, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| General Revenue | (Unknown) to Unknown | (Unknown) to Unknown | (Unknown) to Unknown |
| Total Estimated
Net Effect on General Revenue Fund |
(UNKNOWN) to UNKNOWN | (UNKNOWN) to UNKNOWN | (UNKNOWN) to UNKNOWN |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Various State Funds | Unknown | Unknown | Unknown |
| Total Estimated
Net Effect on Other State Funds |
UNKNOWN | UNKNOWN | UNKNOWN |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 5 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | UNKNOWN | UNKNOWN | UNKNOWN |
ASSUMPTION
Officials of the Office of Administration, Budget and Planning (BAP) assume this bill would require sales at prison stores be subject to sales tax. BAP has no basis for estimating the value of sales at prison stores. BAP defers to the Department of Corrections for an estimate of the fiscal impact. This proposal would have no impact on the BAP.
Officials of the Department of Conservation (MDC) state this proposal specifics that sales at prison stores are subject to sales tax. MDC assumes this proposed legislation would have a positive effect on MDC funds, because of an increase in sales tax revenue. The amount of fiscal impact is unknown.
Officials of the Department of Revenue (DOR) assume that additional sales tax revenue will be collected when the prison stores are added to the non-exempt status in the statutes. The Division of Taxation and Collection will register and process the collection of sales tax by prison stores. No additional administrative impact is expected by DOR.
Officials of the Department of Elementary and Secondary Education and the Department of Natural Resources assume this proposal could increase total state revenue. Both agencies defer to DOR or DOC for an estimate of the revenue impact.
ASSUMPTION (continued)
Officials of the Department of Corrections (DOC) assume this bill specifies that sales at prison stores are subject to sales tax.
DOC canteens are operated in the institutions to provide a means for inmates to purchase their necessary hygiene products and items they may require to access the legal system, i.e., paper, envelopes, stamps and ink pens, etc. Two-thirds of the inmates have a fixed income of $7.50 to $8.50 per month to spend in the canteen, on child support, repayment of debt to the state of Missouri as restitution and court fees. A payment of sales tax would directly reduce the canteen amount spent by a like percentage of the sales tax rate. Different percentage rates would be charged in the separate counties where institutions are located throughout the state. Reduction in their spending would reduce religious, educational, recreational and spiritual activities that are funded from canteen profits. Results from inmate unrest due to provisional cuts is always a potential threat. DOC assumes General Revenue Funds may be required to supplement the shortfall to continue to provide the necessary programs within the institutions.
If this proposal were passed into law, DOC would require upgrades to the existing computer system and cash registers used in the canteens. FTE would be required to establish and maintain tax reporting/accounting to DOR.
In summary the fiscal impact for the DOC is unknown but has the potential to be significant.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| GENERAL REVENUE FUND | |||
| Income - General Revenue | |||
| Sales tax on prison store sales | Unknown | Unknown | Unknown |
| Cost - Dept. of Corrections | |||
| Personal Service | (Unknown) | (Unknown) | (Unknown) |
| Fringe Benefits | (Unknown) | (Unknown) | (Unknown) |
| Expense and Equipment | (Unknown) | (Unknown) | (Unknown) |
| Total cost - DOC | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND |
(UNKNOWN) to UNKNOWN | (UNKNOWN) to UNKNOWN | (UNKNOWN) to UNKNOWN |
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| OTHER STATE FUNDS | |||
|
Income - School District Trust Fund |
|||
| Sales tax on prison store sales | Unknown | Unknown | Unknown |
|
Income - Conservation Fund |
|||
| Sales tax on prison store sales | Unknown | Unknown | Unknown |
| Income - Parks and Soil Funds | |||
| Sales tax on prison store sales | Unknown | Unknown | Unknown |
|
ESTIMATED NET EFFECT TO ALL OTHER STATE FUNDS |
UNKNOWN |
UNKNOWN |
UNKNOWN |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| Income - Cities
Sales tax on prison store sales |
Unknown |
Unknown |
Unknown |
| Income - Counties
Sales tax on prison store sales |
Unknown |
Unknown |
Unknown |
| ESTIMATED NET EFFECT TO
LOCAL GOVERNMENT |
UNKNOWN |
UNKNOWN |
UNKNOWN |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal clarifies and specifies that sales of food, meals, drinks and tangible personal property at prison canteens are subject to the statewide sales tax on those items. The existing sales tax provisions concerning collection and remittance of such taxes will apply to items made taxable by this proposal.
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
Office of Administration
Division of Budget and Planning
Department of Conservation
Department of Corrections
Department of Natural Resources
Department of Secondary and Elementary Education
Mickey Wilson, CPA
Director
February 4, 2003