Sales and use tax exemption-manufacturing equipment.

04LSO-0024.C1

                                                         

FISCAL NOTE (HB0044)

 

 

While there is no method currently available to calculate the actual cost of the exemption the department did contact the state of Georgia as to how they track the cost of the exemption.  According to the Administrator of their Sales and Use Tax Division the exemption costs approximately $100 million per year.  That represents approximately 1.07 percent of the total revenue collected annually based on $9.298 Billion in sales tax revenue.  Applying the same percentage to Sales tax revenue in Wyoming would result in a cost to the state of $5,830,000 annually.  However, Wyoming’s Manufacturing sector comprises 3 percent of the labor force of the state where Georgia’s manufacturing sector comprises 11 percent of the labor force.  Assuming that the labor force correlates well with the total taxes avoided by the exemption we estimate that the initial cost of the exemption would be approximately $1.6 to $2.0 million annually.  As the sector grows so will the reduction in revenue.

 

 

Prepared by:   Dan Noble, Dept. of RevenuePhone:   777-5220