COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3242-01

Bill No.:          SB 823

Subject:           Taxation and Revenue - Sales and Use

Type:              Original

Date:               February 14, 2008

Bill Summary:            Would create a state and local sales and use tax exemption for sales of weather radios.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 6 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of Administration, Division of Budget and Planning (BAP) assume this proposal would exempt radios primarily designed to receive weather transmissions from sales and use tax. The proposal would not result in additional costs or savings to BAP. There would however be an unknown loss of sales tax revenue to the state as a result of the proposal.

Officials from the Department of Elementary and Secondary Education defer to the Office of Administration, Division of Budget and Planning or the Department of Revenue as to the fiscal impact of this proposal.

Officials from the Department of Conservation (MDC) assume this proposal would appear to have a negative fiscal impact on MDC funds since it would exempt certain radios from sales tax. Although the impact is likely to be minimal, MDC is unable to provide an estimated amount and will reply on DOR for the fiscal impact of this legislation.

Officials from the Department of Natural Resources (DNR) assume this proposal would exempt sales of radios, designed for the primary purpose of receiving transmissions of weather forecasts and warnings provided by the National Oceanic and Atmospheric Administration, from state and local sales and use tax. The Department's Parks and Soils Tax Fund is derived from a one-tenth of one percent sales and use tax. The exemption in this proposal by itself would not be

expected to have a significant fiscal impact, but taken in the aggregate with sales and use tax exemptions in past and future legislative sessions would result in some loss to the Parks and Soils Tax Fund.

ASSUMPTION (continued)

Officials from the Department of Revenue, East Central College, Linn State Technical College, the Metropolitan Community Colleges, St. Louis County, and the City of Kansas City assume this proposal would have no fiscal impact on their organizations.

Officials from Cass County assume this proposal would cost their organization $140 per year in lost sales tax revenue.

Officials from the City of Centralia assume this proposal would result in lost sales tax revenues for their organization of $6 in 2009, and $17 in 2010 and 2011.

Officials from the City of Webb City and the City of West Plains assume there would be minimal fiscal impact to their organizations as a result of this proposal.

Oversight has researched the available information on weather radio sales and found a wide range of prices for individual radios but no information as to unit sales. Oversight concludes that enactment of this proposal would result in an unknown loss of sales tax revenue to the state General Revenue Fund and to other state funds that receive sales tax revenues, and to local governments.

FISCAL IMPACT - Small Business

This proposal could have a direct fiscal impact to small businesses which sell weather radios.

FISCAL DESCRIPTION

This proposal would create a state and local sales and use tax exemption for sales of weather radios.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of Administration

            Division of Budget and Planning

Department of Elementary and Secondary Education

Department of Conservation

Department of Natural Resources

Department of Revenue

East Central College

Linn State Technical College

Metropolitan Community Colleges

Cass County

St. Louis County

City of Centralia

City of Kansas City

City of Webb City

City of West Plains

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                February 13, 2008