Sales tax on food-exemption.

06LSO-0007.L4

                                                         

FISCAL NOTE

 

This bill contains an appropriation of $46,600,000 from the GENERAL FUND to the Department of Revenue.

 

 

FY 2007

FY 2008

FY 2009

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

GENERAL FUND

(25,490,000)

(26,120,000)

(51,090,000)

LOCAL SOURCES FUND

0

0

50,000

 

Sources of revenue increase (decrease): Sales and use tax exemption on food for domestic home consumption, effective July 1, 2006. Change in sales and use tax distribution percentages, effective July 1, 2008 (fiscal year 2009).

 

Assumptions:

Local governments are held harmless in FY 2007 and FY 2008 by the appropriation in the bill, and in FY 2009 by the change in the sales and use tax distribution percentages. The estimated revenue decreases for local governments ($23,000,000 in FY 2007, $23,570,000 in FY 2008, and $24,210,000 in FY 2009) are offset by the appropriation and change in distribution percentages. Local governments are estimated to receive a revenue increase of $50,000 in FY 2009 due to the change in distribution percentages.

 

Assumed that food for domestic home consumption does not include prepared food. The above estimates are based on FY 2005 sales and use tax reported by grocers, convenience stores, department stores and other general merchandise stores. The amount of food sold by grocers was assumed to be 75% of all sales while the other categories were estimated at 25%. The revenue decreases (and revenue increase) were projected from FY 2005 actual totals using January 2006 CREG sales and use tax projections.

 

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

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

 

NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED

 

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