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F I S C A L I M P A C T R E P O R T
SPONSOR Carraro
DATE TYPED 02/04/05 HB
SHORT TITLE Municipal Gross Receipts Tax Credit
SB 48
ANALYST Taylor
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
($147,000.0)
($154,000.0) Recurring
General Fund
3
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to: Senate Bill 50, HB 81
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
SUMMARY
Senate Bill 48 provides a credit for municipal gross receipts taxes paid. The credit is equal to
one-half percent if the municipality has imposed a total municipal gross receipts tax rate of at
least one-half percent and one-fourth percent if the municipality has imposed a municipal gross
receipts tax rate of one-fourth percent.
The bill’s effective date is July 1, 2005.
FISCAL IMPLICATIONS
TRD reports that all municipalities have imposed at least a 0.5 percent municipal gross receipts
tax rate, implying that the credit imposed by this bill would be 0.5 percent. They also indicate
that in FY06 taxable gross receipts in municipal areas are estimated to be $29.4 billion, about 75
percent of total state-wide taxable gross receipts. Multiplying the one-half percent credit by
$29.4 million equals $147 million, the estimated revenue loss to the general fund.
The subsequent year impact increases the initial impact by 4.5 percent, the expected growth rate
for gross receipts tax revenues.