SOUTH DAKOTA LEGISLATIVE RESEARCH COUNCIL

FISCAL NOTE, 2004 LEGISLATIVE SESSION


FISCAL NOTE 2004-HB1283A

HB 1283 exempt certain purchases of material used in the production of greenhouse, nursery, and ornamental plants from sales and use taxes.

House Bill 1283, as introduced, specifically exempts from both the sales tax and the use tax the "purchase of any fertilizer, growth regulator, soil, container, and plant shine that is used in the production of greenhouse, nursery, and ornamental plants intended to be sold ultimately at retail." The bill pertains only to greenhouses, businesses "primarily engaging in ornamental floricultural and nursery products," Standard Industry Code (SIC) No. 0181.

After consultation with the Department of Revenue and Regulation, it is estimated that HB 1283 would have the following impact on the state's finances:


Agency/Item  
General Fund   Federal Funds   Other Funds   Total   FTE  
Revenue:   ($5,000)   $0   $0   ($5,000)    
Expenses:   $0   $0   $0   $0   0.0  
Net Impact   ($5,000)   $0   $0   ($5,000)   0.0  

Assumptions:

This fiscal note assumes that the use tax paid by greenhouses is for items delineated in this bill. The Department of Revenue and Regulation has no SIC for the suppliers of these items to greenhouses. The agency cannot determine the amount of sales tax paid by greenhouses for these items. The Department does know that greenhouses paid $1,797 and $3,043 in use taxes in Calendar Years 2002 and 2003 (to date), respectively, but the agency cannot determine if all of that tax was from the purchase of the items covered in this bill.

APPROVED BY:_______________________________________ DATE:____________