Consumer tax relief.

06LSO-0259.L5

                                                         

FISCAL NOTE

This bill contains an appropriation of $67,100,000 from the GENERAL FUND to the State Treasurer.

 

TOTAL

FY 2007

FY 2008

FY 2009

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue

Increase (Decrease):

 

 

 

GENERAL FUND

(36,620,000)

(37,700,000)

(51,090,000)

LOCAL SOURCES FUND

0

0

50,000

 

Sources of revenue increase (decrease): (1) Sales and use tax exemption on food for domestic home consumption, effective July 1, 2006; (2) Change in the sales and use tax distribution percentages effective July 1, 2008 (FY 2009); (3) Sales & use tax exemption on sale or purchase of gas, electricity or heat for domestic consumption from July 1, 2006 through June 30, 2008. The above estimates reflect the total projected revenue increases and decreases from both exemptions and the change in distribution percentages.

 

Assumptions:

Total revenue decrease to local governments from both exemptions in FY 2007-08 is estimated at $67,100,000 ($33,050,000 in FY07 and $34,020,000 in FY08). Local governments will receive twenty-four monthly distributions from the $67.1 million appropriation in the bill to offset the anticipated revenue decrease. The FY 2009 revenue decrease to local governments from the food exemption is offset by a revenue increase from change in distribution percentages, resulting in a net revenue increase of $50,000 in FY 2009.

 

Assumptions for food exemption:

Assumed that food for domestic home consumption does not include prepared food. The estimates for the food exemption in the table below 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 were projected from FY 2005 actual totals using January 2006 CREG sales and use tax projections. The estimated revenue decreases for local governments ($23,000,000 in FY07, $23,570,000 in FY08, and $24,210,000 in FY 2009), are offset by the appropriation and change in distribution percentages. The $24,210,000 revenue decrease in FY 2009 is offset by an estimated $24,260,000 revenue increase from the change in distribution percentages, resulting in a revenue increase of $50,000 in FY09.

Food Exemption

 

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

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Assumptions for utility exemption:

The estimates for the utility exemption in the table below are based on 204,200 households in Wyoming, from data provided by the Division of Economic Analysis. Average fuel bill for each household, with an anticipated 30% increase, is assumed to be $160. Assumed a statewide average sales and use tax rate of 5.2%.

 

204,200 x $160 x 12 x 5.2% = $20,387,000 annual sales and use tax for domestic consumption. This represents 56% of all power taxed for the state. Revenue decreases for FY07 and FY08 were projected forward based on the projected population growth rates and projected inflation rates provided by the Division of Economic Analysis. Revenue decrease to local governments from utility exemption is estimated at $20,500,000 ($10,050,000 in FY07 and $10,450,000 in FY08), and is offset by appropriation in the bill.

 

The sales and use tax exemption on gas, electricity, or heat for domestic consumption begins July 1, 2006 and ends June 30, 2008.

 

Utility Exemption

 

FY 2007

FY 2008

FY 2009

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue (Decrease):

 

 

 

GENERAL FUND

(11,130,000)

(11,580,000)

0

 

 

 

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

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

Wenlin Liu, Division of Economic Analysis; phone 777-7504)

 

 

 

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

 

 

 

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