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F I S C A L I M P A C T R E P O R T





SPONSOR: Lyons DATE TYPED: 02/08/01 HB
SHORT TITLE: Investment Coins Gross Receipts Deduction SB 106
ANALYST: Eaton


REVENUE



Estimated Revenue
Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY01 FY02
unknown negative see narrative Recurring General Fund
unknown negative see narrative Recurring Local Govt.



(Parenthesis ( ) Indicate Revenue Decreases)



SOURCES OF INFORMATION



Taxation and Revenue Department (TRD)



SUMMARY



Synopsis of Bill



This bill provides a gross receipts tax deduction for the sale of investment coins and investment bullion.



FISCAL IMPLICATIONS



The Taxation and Revenue Department has no information on the value of investment bullion and coins sold which are currently subject to gross receipts tax.



ADMINISTRATIVE IMPLICATIONS



Minimal.



TECHNICAL ISSUES



The Taxation and Revenue Department (TRD) suggest that the definition of "investment bullion" could be improved with some reference to the metal having been assayed and stamped with a mark as to purity. Such a definition would improve the bill's current definition which appears to focus on the issue of differentiating bullion from jewelry.



OTHER SUBSTANTIVE ISSUES



The Taxation and Revenue Department (TRD) is concerned that if this bill is passed, soon there may be challenges of the department's regulation regarding taxation of the sale of (collectible) postage stamps and "investment grade tangibles". TRD is concerned that this may consume considerable resources within the department.



The Taxation and Revenue Department TRD) warns that the long run consequence of moving in the direction of exempting "investment grade tangibles" could be revenue losses approaching $10 million.



JBE/njw