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F I S C A L I M P A C T R E P O R T
SPONSOR Whitaker
DATE TYPED 2/04/05
HB 433
SHORT TITLE Local Government Gross Receipts Time Limits
SB
ANALYST Hadwiger
SOURCES OF INFORMATION
LFC Files
Responses Received From
Taxation and Revenue Department (TRD)
Department of Finance and Administration (DFA)
FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
SUMMARY
Synopsis of Bill
This bill amends Sections 7-19D-12 and 7-20E-21 to remove the sunset dates by which time a
municipality or county could enact an ordinance imposing the municipal or county capital outlay
gross receipts tax. The bill includes an emergency clause. Under present law, an ordinance to
impose either of the taxes would have to be enacted prior to July 1, 2005.
Significant Issues
The municipal capital outlay gross receipts tax may be imposed in increments of 1/16
th
of one
percent (0.0625 percent) but cannot exceed a total of 1/4
th
of 1 percent (0.25 percent). The
county capital outlay gross receipts tax may be imposed in increments of 1/16
th
of one percent
(0.0625 percent) but cannot exceed a total of 1/4
th
of 1 percent (0.25 percent). Both capital out-
lay gross receipts taxes require voter approval. Revenues received from both capital outlay gross
receipts tax options can be used for a wide variety of projects.
DFA indicated that removal of these sunset dates is a statewide, immediate and serious problem
for many local governments due to their financial condition and the slow economy. DFA further
noted that it is important to allow local governments the option to enact ordinances to seek local
option taxes on a continuing basis so that they can start, continue and complete projects that are
important. These enacted ordinances must still pass public referendums in order to take effect
and local governments must have already imposed all of their respective general, infrastructure
and supplemental (municipalities) gross receipts tax increments before they are eligible to im-
pose these options.