Colorado Legislative Council Staff
STATE and LOCAL
REVISED FISCAL IMPACT
(replaces fiscal impact dated April 28, 1999)
Drafting Number: Prime Sponsor(s): |
LLS 99-0946 Rep. Young Sen. Wattenberg |
Date: Bill Status: Fiscal Analyst: |
April 30, 1999 Senate Appropriations Harry Zeid (303-866-4753) |
TITLE: CONCERNING THE EXEMPTION OF COMPOUNDS USED IN THE PRODUCTION OF AGRICULTURAL PRODUCTS FROM THE STATE SALES AND USE TAX.
Fiscal Impact Summary |
FY 1999/2000 |
FY 2000/2001 |
State Revenues General Fund |
-$2,653,191 |
-$2,653,191 |
State Expenditures General Fund |
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|
FTE Position Change |
0.0 FTE |
0.0 FTE |
Other State Impact: TABOR Impact |
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Effective Date: July 1, 1999 |
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Appropriation Summary for FY 1999-2000: None |
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Local Government Impact: Statutory cities and counties may exempt sales tax on compounds used in the production of agricultural products. Other districts that are statutorily authorized to impose a sales tax will experience a revenue reduction in the collection of local sales tax revenue on items exempted by the bill. Home rule cities would be unaffected by the bill. |
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Summary of Legislation
Effective July 1, 1999, this bill, as amended by the Senate Finance Committee, permanently creates a state sales and use tax exemption for all sales and purchases of pesticides that are registered by the Commissioner of Agriculture for use in the production of agricultural and livestock products pursuant to the provisions of the "Pesticide Act", and offered for sale by dealers licensed to sell the pesticides. The bill also requires the Commissioner of Agriculture to make recommendations to the Senate and House Agriculture Committees regarding the elimination of the sales and use tax on other agricultural compounds used in the production of agricultural and livestock products.
State Revenues
The Department of Revenue indicates that 236 companies are registered with the Department of Agriculture to sell the types of pesticides identified in the bill. While no specific data is available to identify the value of the items that would be exempted from the sales tax base, the best estimate of the state sales tax revenue reduction that would occur is $2,653,191 annually beginning in FY 1999-00.
State Expenditures
State expenditures would be unaffected by the bill.
Other State Impacts
Under current law, SB97-1 requires the diversion of 10 percent of sales tax revenues to the Highway User Tax Fund for use on highway projects. This bill will reduce state sales tax revenues beginning in FY 1999-00, and will therefore, reduce the amount of state funds available for the SB 97-1 diversion. Additionally, the reduced state revenues will mean a reduction of the amount of future state funds required to be refunded to taxpayers under the terms of TABOR. Table 1. summarizes the net impact of this bill on these state obligations. The changes in Table 1. are changes from a base that includes continuing capital construction projects.
Table 1. Additional Impact of HB 99-1381 (millions of dollars)
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FY 1999-00 |
FY 2000-01 |
General Fund Revenue SB 97-1 Diversion Excess General Fund Reserve Federal Income Taxes Paid by Colorado Taxpayers TABOR Refund (from prior year) |
-$2.65 -0.27 -2.38 0.00 0.00 |
-$2.65 -0.27 -2.38 0.00 -2.65 |
Local Government Impact
Statutory cities and counties may exempt sales tax on compounds used in the production of agricultural products. Other districts that are statutorily authorized to impose a sales tax will experience a revenue reduction in the collection of local sales tax revenue on items exempted by the bill since they follow the state sales tax base. Home rule cities would be unaffected by the bill.
State Appropriations
The fiscal note implies that no new spending authority or appropriations are required for FY 1999-00 to implement the bill.
Departments Contacted
Revenue Legislative Council Staff