Bill Summary – FastDemocracy

State of Alaska
                                                         Fiscal Note
                                                                                        Bill Version:                    CSHB 96(FIN)
 2018 Legislative Session
                                                                                        Fiscal Note Number:              3
                                                                                        (H) Publish Date:                2/28/2018
 Identifier:        HB096-DOR-TAX-02-17-2018                              Department:       Department of Revenue
 Title:             TAXES;DEDUCTIONS;FEES;TAX STAMP                       Appropriation: Taxation and Treasury
                    DISCOUNT                                              Allocation:       Tax Division
 Sponsor:           THOMPSON                                              OMB Component Number:              2476
 Requester: House Finance
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                          (Thousands of Dollars)
                                                 Included in
                                    FY2019       Governor's
                                Appropriation      FY2019                                      Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2019        FY 2019       FY 2020                FY 2021           FY 2022            FY 2023       FY 2024
 Personal Services
 Travel
 Services
 Commodities
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                            0.0           0.0          0.0                      0.0                0.0              0.0            0.0
 Fund Source (Operating Only)
 None
 Total                                           0.0         0.0                 0.0            0.0                0.0              0.0            0.0
 Positions
 Full-time
 Part-time
 Temporary
 Change in Revenues
 None                                            ***                             ***            ***                ***              ***            ***
 Total                                           0.0         0.0                 0.0            0.0                0.0              0.0            0.0
 Estimated SUPPLEMENTAL (FY2018) cost:            0.0               (separate supplemental appropriation required)
 (discuss reasons and fund source(s) in analysis section)
 Estimated CAPITAL (FY2019) cost:                 0.0               (separate capital appropriation required)
 (discuss reasons and fund source(s) in analysis section)
 ASSOCIATED REGULATIONS
 Does the bill direct, or will the bill result in, regulation changes adopted by your agency?           Yes
 If yes, by what date are the regulations to be adopted, amended or repealed?                           12/31/18
 Why this fiscal note differs from previous version/comments:
 Initial version
 Prepared By:             Dan Stickel, Chief Economist                                                        Phone:         (907)465-3279
 Division:                Tax Division                                                                        Date:          02/16/2018 01:00 PM
 Approved By:             Mike Barnhill                                                                       Date:
                                                                                                                      OUT OF 02/17/18
 Agency:                  OOC                                                                               REPORTED
Printed 2/28/2018                                                  Page 1 of 2                               HFC 02/27/2 018
                                                                                                                      Control Code: RaBql
                                                                                             CSHB 96(FIN) - Fiscal Note 3
                                                 FISCAL NOTE ANALYSIS
 STATE OF ALASKA
 2018 LEGISLATIVE SESSION
 Analysis
    Bill Overview and Revenue Impact
    This bill would make changes to several indirect expenditures in the State of Alaska. The revenue impact of this
    bill for the Tax Division is indeterminate because the Department of Revenue does not collect information
    needed to estimate the impact of one of the provisions of the bill. However for the provisions we can estimate,
    this bill is estimated to increase revenue by approximately $339,500 in FY 2019 decreasing to approximately
    $314,150 in FY 2024, based on the Fall 2017 revenue forecast. Of those additional revenues, the unrestricted
    General Fund would receive about $219,150 in FY 2019 decreasing to approximately $213,600 in FY 2024.
    Following are the specific changes that would impact the Tax Division, and their estimated revenue impacts
    based on the Fall 2017 revenue forecast:
    1. Repeals the deduction for accounting and filing expenses for the Tobacco Products Tax under AS 43.50.330(b).
    This deduction is four-tenths of one percent of the tax due. The revenue impact of this deduction was $55,941 in
    FY 2017, and is estimated to be $62,950 in FY 2019 rising to $83,000 in FY 2024 based on the forecasted increase
    in tobacco products wholesale value.
    2. Repeals deduction for expenses of affixing stamps to packs for the Cigarette Tax under AS 43.50.540(c). This
    deduction allows for a discount of 3% of the first $1,000,000 and 2% of the second $1,000,000 in tax stamps
    purchased, up to a maximum deduction of $50,000 per taxpayer. The revenue impact of this deduction was
    $376,516 in FY 2017, and is estimated to be $276,550 in FY 2019, falling to $231,150 in FY 2024 based on declines
    in cigarette consumption.
    Cigarette Tax revenue is deposited into the School Fund and the General Fund, with a portion of the General
    Fund money directed to the Tobacco Use Education and Cessation sub-fund. Of the $276,550 Cigarette Tax
    Stamp Discount impact estimated in FY 2019, $105,100 would be deposited in the School Fund, $15,250 in the
    Tobacco Use Education and Cessation sub-fund, and $156,200 in the unrestricted General Fund. It is estimated in
    FY 2024 that there would be about $87,800 deposited into the School Fund, around $12,750 into the Tobacco
    Use Education and Cessation sub-fund, and $130,600 to the General Fund.
    3. Repeals the deduction for federal taxes paid for the Large Passenger Vessel Gambling Tax under AS 43.35.210.
    This deduction allows federal taxes to be deducted in arriving at "adjusted gross income" for purposes of
    calculating the tax liability. The fiscal impact of this provision is indeterminate because the Department of
    Revenue does not collect this information.
    Expenditures
    The department can implement the provisions of this bill using existing resources.
    Regulations
    The department anticipates that it will need to repeal, amend, and adopt regulations for the tax types impacted
    by
    repealed credits and deductions. Regulations should be effective by December 31, 2018.
 (Revised 9/26/17 OMB/LFD)                                                                                           Page 2 of 2
HB096-DOR-TAX-02-17-2018                               Page 2 of 2                                        Control Code: RaBql
Statutes affected: 
HB0096A, AM HB 96, introduced 02/01/2017: 43.35.210, 43.50.590
HB0096B, AM CSHB 96(FIN), introduced 02/28/2018, passed House 03/05/2018: 43.35.210, 43.50.590