Sales tax on food exemption-sales tax increase.

04LSO-0140.L3

                                                         

FISCAL NOTE (HB0175)

This bill contains an appropriation of $12,000,000 from the GENERAL FUND.

 

FY 2005

FY 2006

FY 2007

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase:

 

 

 

GENERAL FUND

23,750,000

24,770,000

25,630,000

LOCAL SOURCES FUND

10,670,000

11,130,000

11,510,000

Source of revenue increase: Increase in the state sales and use tax rate by 0.3 percent to a total of 4.3 percent.

 

Assumptions:

 

The above increases are net of the proposed exemption on food. The above estimates are based on January 2004 CREG projections. The above estimates are based on the current distribution percentages of 69 percent to the General Fund and 31 percent to local governments.

 

FY 2005

FY 2006

FY 2007

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Decrease:

 

 

 

GENERAL FUND

(15,610,000)

(16,280,000)

(16,840,000)

LOCAL SOURCES FUND

(10,670,000)

(11,130,000)

(15,460,000)

Source of revenue decrease: Exemption from sales and use tax of food for domestic home consumption.

 

Assumptions:

 

Local governments are held harmless in FY05 and FY06 thanks to the appropriation in the bill. The revenue decreases for FY05 and FY06 are offset by the appropriation to equal the revenue increases from the change in tax rate, thus bringing the net impact on local governments to zero.

 

Estimates derived from FY 2003 Distribution by Minor Business Class Report and are reduced by 25 percent to estimate non-food sales by grocers. The above decreases are based on January 2004 CREG projections.

 

Prepared by:   Dean Temte, LSO    Phone:   777-7881

(Information provided by Dan Noble, Dept. of Revenue; phone 777-5220)

 

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements. As introduced, the bill does not modify any state agency budget or current personnel authorizations.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

Department of Revenue

Department of Audit