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Fiscal Note

SB0023S01 - Income Taxation of Pass-through Entities and Pass-through Entity Taxpayers

State Impact:
Enactment of this bill could increase revenue to the Education Fund by $678,300 in FY 2010 and $710,000 in FY 2011. Beginning in FY 2012, there will be a loss in revenue to the Education Fund of $2,200,000 annually. The Tax Commission will require an appropriation of $80,000 to enforce the provisions of the bill. This would be one auditor.

Funding SourceFY 2009
Approp.
FY 2010
Approp.
FY 2011
Approp.
FY 2009
Revenue
FY 2010
Revenue
FY 2011
Revenue
General Fund$0$45,500$45,500$0$0$0
Education Fund$0$34,500$34,500$0$710,000$710,000
Education Fund, One-Time$0$0$0$0($31,700)$0
   Total
$0

$80,000

$80,000

$0

$678,300

$710,000

Individual, Business and/or Local Impact:
Individuals with built in and other gains could experience a decrease in taxes owed of $3,000,000 beginning in FY 2012. Non-resident individuals will be subject to withholding. If the non-resident taxpayers decide not to file for the withholding that has taken place during the year, there could be an increase in taxes on these individuals of $678,300 in FY 2010 and $710,000 in FY 2011. S-Corporation businesses with non-resident shareholders will be required to withhold. Businesses structured as s-corporations with built in and other gains could experience a decrease of the amount mentioned above. Locals are unaffected.

2/18/2009, 10:27:25 AM, Lead Analyst: Young, T.Office of the Legislative Fiscal Analyst