Fiscal Note

HB0403 - Sales and Use Tax and Income Tax Amendments

State Impact:
Enactment of this bill restores the sales tax on food to the state rate. This increases revenue to the General Fund by $145,358,600 in FY 2010 and by $150,402,500 in FY 2011. Restricted revenues will also increase by $16,478,400 in FY 2010 and by $17,048,300 in FY 2011. Total funding increases resulting from the food tax provisions will be $161,837,000 in FY 2010 and $167,450,800 in FY 2011. The bill also provides for a refundable income tax credit equal to 6 percent of the federal earned income tax credit. This will result in a revenue loss of $19,400,000 in FY 2010 and by $20,176,000 in FY 2011. An appropriation from the General Fund will be made to the Education Fund to hold education harmless.

Individual, Business and/or Local Impact:
Enactment of this bill could increase costs to individuals and businesses for food purchases. Low income individuals could receive a benefit from the income tax credit authorized in the bill. Local governments could see increases in restricted revenues of $48,643,500 in FY 2010 and by $50,331,000 in FY 2011.