NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.
Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.
| SPONSOR: | Ingle | DATE TYPED: | 02/04/00 | HB | |||
| SHORT TITLE: | Agricultural Processing Tax Deduction | SB | 287 | ||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY00 | FY01 | |||
| $ (410.0) | Recurring | General Fund | ||
| $ (15.0) | Recurring | County Govt. | ||
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HB319
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
This bill adds "transporting unprocessed agricultural products for the producer or nonprofit marketing association" to the list of agricultural services allowed a gross receipts deduction. This list includes reaping, harvesting, ginning, etc..
FISCAL IMPLICATIONS
The estimated impact to the general fund in FY01 is $410.0 (recurring). The estimated impact to county government in FY01 is $15.0 (recurring).
The 1992 Economic Census of Transportation Industries indicates that in 1992, 306M ton-miles of primary, unprocessed agricultural commodities were hauled in the state. 49% of the value of these crops, animals and produce were hauled by for-hire carriers, with an additional 7% of the value hauled by mixed private and for-hire modalities. Using 6¢ per ton-mile for agricultural short-hauls, indicates that 1992 for-hire revenues were about $10.3 million. An estimated 80% of this revenue was in intrastate commerce, and therefore taxable. The remaining 20% is deductible under an existing deduction from gross receipts tax for receipts from hauling in interstate commerce. This leads to an $8.2 million tax base for this proposed deduction. No adjustment was made for any change in data since 1992. This is likely to result in an underestimate of fiscal impacts. Under current law, there is no local option gross receipts tax rate applied to hauling goods across city or county lines. Thus, the impact of this bill is almost solely state general fund. Industry representatives have testified that compliance with the gross receipts tax on hauling agricultural commodities is probably pretty poor and that most, if not all, the legally imposed taxes have not been remitted to the state.
ADMINISTRATIVE IMPLICATIONS
Minimal impact on Taxation and Revenue Department.
DUPLICATION
House Bill 319
OTHER SUBSTANTIVE ISSUES
The Taxation and Revenue Department report that this bill is in response to an audit and assessment of a for-hire milk hauler. TRD reports that his bill will not affect the outcome of the protest of this issue.
JBE/gm