Brief(1)
H.B. 2048, as amended by the House Committee of the Whole, would provide a sales tax exemption for certain sales of tangible personal property and real property damaged or destroyed in the state as a result of weather-related events or occurrences declared to be federal disasters by the President of the United States when federal grants have been authorized. No such sales would be exempt unless they occurred within three years of the date of the weather-related disaster declaration.
Refunds would be authorized for any sales taxes paid for such purposes on and after October 1, 1998, but prior to the effective date of the bill, provided the claims are filed on or before July 1, 2000. Refunds would be authorized on all such sales which occur after weather-related disasters but before disaster declarations, provided claims are made within nine months.
The bill also would reduce the state sales tax rate on food for human consumption from 4.9 percent to 3.3 percent on July 1, 1999, and to 2.2 percent on July 1, 2001. The state tax on such purchases would be totally exempt on July 1, 2002. Local sales taxes on food for human consumption would be retained.
Sales tax demand transfers to the Local Ad Valorem Tax Reduction Fund (LAVTRF) and County and City Revenue Sharing Fund (CCRSF) are adjusted with the intent of holding such transfers harmless relative to the food tax provisions. The State Highway Fund (SHF) demand transfer would be increased to offset (1) the impact of the food tax provisions on the demand transfer; and (2) the impact of the food tax provisions on the 0.25 percent sales and compensating (use) tax deposited directly in the SHF.
Background
The House Committee amendments were suggested by Representative Palmer after consulting with the Department of Revenue.
The House Committee of the Whole added the food tax and demand transfer provisions.
The bill would be expected to affect the State General Fund as follows:
| ($ in millions) | |||
| Food Tax | |||
| Disaster | Provisions | Total | |
| Relief | Net SGF | SGF | |
| SGF Impact
|
Impact
|
Impact
| |
| FY 2000 | ($1.500) | ($74.839) | ($76.339) |
| FY 2001 | ($1.702) | ($77.832) | ($79.534) |
| FY 2002 | ($1.770) | ($136.596) | ($138.366) |
| FY 2003 | ($1.841) | ($257.812) | ($259.653) |
| FY 2004 | ($1.914) | ($268.124) | ($270.038) |
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html