Excise tax-vendor compensation.

11LSO-0227.L3

FISCAL NOTE

	FY 2012	FY 2013	FY 2014
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
GENERAL FUND	105,000
GENERAL FUND	(12,162,000)	(12,622,000)	(12,786,000)

Source of revenue increase: By paying the sales and use taxes due 15 days early, the state will receive a one-time increase in interest on this money.

Assumptions:

Assumed that the state will receive the prime rate each year as published by the State Treasurer.  The 2010 rate used in this calculation is 3.665% annually.  Payments made after the fifteenth of the month are approximately $70,000,000 monthly. There is no ongoing effect as the money will typically be received earlier as long as the compensation is in place.

Source of revenue decrease: The discount provided for in this bill will be paid directly from sales and use taxes reported by each vendor, from the share of the tax distributed to the General Fund. Local government distribution is unaffected.

Assumptions:

Assumed 95% of all vendors will take advantage of the discount.  On any given month there are approximately 5% of all vendors that report late. This exemption has two tiers, the first of which provides a discount of 1.95% to virtually all vendors for the first $50,000 of tax collected or paid in a given month or filing period.  Anyone collecting in excess of $50,000 would be able to deduct 1% of the amount over $50,000, with the total compensation limited to $2,500 monthly.  The only data available for calculating this impact is from FY 2009, and is limited to sales tax. Therefore the vendor compensation on use tax is not included in the above estimate. An extract of each vendor’s FY 2009 sales was pulled from the Department of Revenue database and used to calculate compensation by vendor. Of the entire vendor force, only 213 vendors would qualify for the additional lower discount of 1%.

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

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

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