Revenue & Taxation- House

Sample bill that takes the time to ask for a credit for a vehicle that you sold against a trading in from forty five days to sixty and that's all the bill does And there is no fiscal impact. Thank you represent Cavenaugh members in questions. Anybody wants to speak for against the bill for the bill. If a the talking thing you get to emotion the motion to pass Christian these all of favor say aye. Regulation best bill thank you so much. Lowery ready. Members we don't care what type one bill out of order here because represent large gotta get back to different committee. Hello. A past member the. Thank you Mr chair and there is an amendment to the bill. This has to be the simplest Amendment ever accepted the change in one word so I I guess you'll see what that is Larry this will be House Bill ten twenty three look at the member provided just a moment first year. Members this is the bill that we the to combat the week or so ago a couple weeks ago I guess and we held up but the effect is work with persons allowed to get costs down and with the mood of the committee I think. We have a motion documented but but also This is a bill that we know the mood of the committee and will of committee I think we've had a problem with this bill out of committee but that's obviously up to the committee discretion as to go in regular okay the Amendment that is both of before you deals with a one word change online thirty of page one the ward. Or services instead of four it should be by services by a parent teacher organization parent teacher association. Members your visor the the. The Amendment any questions. I have a motion for passage induction. All in favor say aye. Festered when presented bill okay thank you to at an institute chairman Jett said that this is the the bill that I presented several weeks ago and I appreciated the move to the committee that this is something that that we should enable parent teacher organizations not having to pay sales tax on their revenues that they collect for their school so I won't belabor it to but I certainly appreciate a good a good vote out of this committee Paul. Paul you'll you'll speak to the police. Public hearing Arkansas department of finance administration good Sir thank you Mister chair thank you represented Lowery Elbridge Lowery discussed house bill two and twenty three last week and try to figure out a way to reduce the revenue impact as the bill was originally introduced the exemption extended to all purchases by a qualified PTA PTO or other school organization and so that really would be very very broad exemption and of course the if they just want to rewrite the bill but if we can figure out a way to get the revenue impact down so it's about a less of an impact on the state budget we want to be able to be available to do so so represent of Larry talked about changing the language of the bill so that it would only be exemption would only extend to win the PTA or PTO is making sales so when they the PTA or the PTO was making purchases of items of tangible personal property or services only what would be exempt on a resale would be the the items that they're going to sell such as the food items maybe they're going to have merchandise that they're gonna resale as a part of a franchise fundraiser but if the PTA had other otherwise taxable purchases for their overhead type expenses L. computer equipment office supplies things of that nature we didn't want that the bill to extend to that exemption because that will it's going to make the in revenue impact larger we're going to prepare a formal fiscal impact statement for the bill based upon the bill as amended by the committee however we don't have that ready here today but we do have the number it would reduce the revenue impact of the bill the range to approximately sixty eight thousand of sale state sales tax loss on the low end to up to three hundred seventy two thousand on the high end of certainly there's a lot of organizations that could qualify for this exemption coming up with a of a a bottom line figure would be very difficult until we actually see what the effective the exemption after the fact but certainly that ranges lower. than we originally scored the bill be happy to answer any questions thank you Palmer's any questions. Covers Mayberry. Thank you just curious eighty eight I know it says specifically parent teacher organization or similar organization so I'm just trying to think outside the box our school district now has a class where they are making and designing apparel and they're selling it like in their arena. Something like that does not qualify under this is is in my reading that right it would just be kind of a parent teacher type of thing. Or is it I'm just trying to understand because I'll be asked about it and I'm just trying to understand the scope of of what that means by by fundraising because that the term similar. Similar organizations similarly open and open it up quite a bit I know in the instance that I presented to the committee we had to individual classrooms would produce something that could be sold at a carnival to to benefit the parent teacher organization so for instance if they were making making something like you're talking about they could resell it at a carnival I don't know this is an ongoing type thing you know every basketball game they have their own little store and they're selling apparel they're selling T. shirts and things with Sheridan yellowjackets on it and I'm just trying to figure out of that type of thing is considered sure sure sure ready I'm getting way too in the weeds there but I'm just trying to figure out where where is the line on what we are talking about and certainly in the the language of the bill as originally filed and the similar organization and that has to be in organizations that the five oh one C. three organization so I'm not sure if your organization is organized as a nonprofit five oh one see three but I certainly eight it sounds very similar to a PTA or PTO for what they're doing okay so like at a dance booster group dance team has a the band to booster would that all be considered to and and certainly I think that if this bill were to become law in our rulemaking we would want to get a lot of public comment on the types of organizations out there because we just don't know all the different organization that might be a similar organization we want to make sure the spirit of the of the bill is being accomplished in our rulemaking but certainly as. I can't promise you what what money of chili dinner tickets and barbecue tickets and you know just trying to see how what what's the scope of it and it's very helpful to these groups and and certainly our rule making would be subject to legislative approval so anything that we put our rulemaking would have to be approved by the General Assembly for whatever we're trying to accomplish as the intent. For. He finished now yes thank you Hodges. Thank you for J. going back to two Mavyret question then so with that with that in the the. With that make it that would that would that have an effect on the fiscal the the the impact by the B. and broaden of because you just mentioned that is looking on looking at the the revenue the revenue impact on this on this list we have based on the amendment it would be reduced tremendously that correct well and and certainly the represent Hodges the revenue impact was decrease based upon that there's going to be a small universe of items that could be purchased exempt by the organization but as we did in the revenue but we had to do this as a range because we had a number of schools in Arkansas that we use as our our bases and we under and we know that that one school may have a small number of exempt arches were as another school may have a very large and we have so and there may be other type similar organizations that exist at one school that's why we came up with the range that we provided for this bill but certainly by limit by this amendment that represent Lowery has put on the bill this afternoon that's bringing the universe of types of items and services that could be purchased exempt so that's why the revenue impact was decrease but certainly we don't think that in a rule making that we would be expanding the the revenue impact by including more organizations that that we think should be included in the scope of the exemption. Thank you resume wouldn't have a question Sir. The. We're we're opening Pandora's box for the FAA to be able to interfere in the school district's local business operations here I may not agree with. Thank the scope of the bill at this point should be for parent teacher organizations BT use and that that thing when you know when you get into when you get into the of badger shop which we have and the manager of the store in the whatever your school storm up the we're open up we're open up a whole nother dimension. Mr Gehring can you tell me how many school districts you're saying a thousand forty six. A little over the again that number can you tell me where you get that letter of represent what we we discuss it the last thing that was a typo and we were not intending for to identify that is the number so but either way can you tell me how many of the stores in the schools or how many chili suppers are how many a pancake dealers or practices or whatever they've had to collected sales tax so we don't have that type of data service so you really don't know how many is out there. No Sir so you really can't give us a fiscal impact we have to argue this over time you'll come up here. About the fiscal impacts. What we provide I mean yeah you and you did you went back and did due diligence and came up with basically zero. But I think the scope of the bill when we when you all start talking about rulemaking over there is scares me scares me for a school district. The people will go. Are you gonna require school districts to report the sales from the stores from these chili suppers if they would be an exempt organization they would not be required to have a sales and use tax permit no Sir. My concern Mr chairman thank you. Okay with the bill as it was written originally. I'm just worried about what we're opening up when we start letting them run the rules and regulations that affect our local school districts they're struggling on the thank you Mr chairman thank you Sir written warning. Not represent will not please turn my coffin of thinking turns on. They're gonna. Okay this may be a combination for both represent Lowery and you as well Paul but the. I'm curious here. All right so we're. This is say. Are you just now trying to accept school organizations if not Paul where have you been getting. The revenue that you're referencing what what have you been taxing. Thank you represent warrant and that's a very good question so what we have in our sales tax rules rule G. R. twenty four for parent teacher organizations and associations the way the law works right now is that a PTA or PTO they can sell exempt currently under our rules and the issue is they have to pay sales tax on those purchases so when they go to the retailer or the wholesaler to buy their food items they pay tape they pay sales tax or use tax on the supplier of those items and then when they resell them at this at the school level they are rules provide for exemption so what this would do is allow the the when the sales are made by the PTA or PT they're going to be exempt at the state level but they're also going to have the benefit of the sales for resale exemption at any other reseller would have so this would essentially apply the sale for resale exemption to the PTA the PTO was purchase of this purchases of items for resale and then when they're resold they're going to be exempt under the bill as amended. Okay so you're just basically talking when they buy the products that they're going to sell. At their benefit. That's when they're taxed when they pop died from this when they purchase the products they're going to in turn sale that's right correct that's how it works now okay so if they go to a Sam's or whoever. They get hit at that point. That's right the sales the purchase and that's what the challenge of having data as to the what the collections are because where that retailer or wholesaler that selling the food items or drinks they're not reporting to us to their customers are they're only giving us their aggregate sales on their sales and use tax report we're not it's not I'm not identified by by customer type so that's that's the challenge of providing an actual data because the PTA is the PTO is they're not reporting to us what their sales are they're just going to the stores they're buying their items for resale and the taxes being collected and and we don't have that information because it's not reported to us thank you. General questions. I'm sorry did somebody. You're recognized thank you just a quick question in here can you give us the total revenue and collect all sales tax from PTO and PTA used in the State. What they have paid in no Sir as I just mentioned to represent warrant windows PDAs and PO's or making purchases whether there for their own consumption or for resale they're they're paying sales tax at the time of sale to the retailer or to the wholesaler that selling the items so their that's not actually reported to us by those sellers that are collecting the tax okay I just try to. I understand the rationalization how you can provide me with the revenue impact if you can't give me the total amount collected right in there and there certainly are circumstances where we are able to provide a revenue impact based upon the actual data that is within DFA spares tax system their self or circumstances where we will we have that information but there's also information that we draw upon statistical information from from our economic analysis syntax research section where they can draw national data or state wide data for economic activity and we have to use that best available information for fiscal impact statement so it is it isn't an estimate and it is a range and this is the best available estimate that we can we can provide okay and and just for clarification so I got the number right because I was reading what you were we're talking earlier that the revision or try to make this more restrictive basically would be a seventy eight thousand dollar read reduction and the impact to be a a range of okay you don't know all the all the you know your your math maybe correct all that I brought was that that the low end would be sixty eight hi in would be to seventy two in the state sales tax that sounds the math in my head sounds that you're you're about this class just track the numbers you gave me right out I would. I would deal that that's probably correct but I'm using your estimates and so I guess money somebody favor the bill and I don't see any need to revise it and I would think that this is probably just a rounding error in the BFA calculations and not going to have much of an impact at all. Well it certainly will have an impact and we as as I stated we we only can use the best available economic data to to derive the revenue impact if there is if there is greater data available we'd be happy to review at if you'd like before anyone would like to provide it to us on what the PDAs are actual purchases are we just don't we still have it. Thank you. Yes Sir. SO our main concern is on the tax that would be it would be exempt when they purchased items to resale is it not to in excuse me if I'm not not enough of it if if you're going to buy a product to resale don't argue issued a tax number in order to do that would not allow you to track that exactly how much it is we we have for traditional retailer they are going to obtain a sales and use tax permit from DFA file an application paid a fifty dollar fee for other organizations that are able to sell exempt from sales tax we give them a different format please call the S. T. three ninety one form that we provide a charitable organizations and that's what we would provide for entities that that would not have to get a formal sales tax permit in order to buy exempt as a sales for resale thank you Paula Mr we don't ask that so they would have the organization would have to to take action to get that form form from you I'm assuming and I would say that most parents that are baking cookies and doing that kind of stuff or not we're just going to go buy the products to pay the taxes they're giving to their school so I'm also questioning that the impact would be very little bit thank you very much yes Sir. Thank you Sir general questions. Seeing none Jim by the artist will speak against the bill. For the bill. Regional are you closing your bill Sir I am close as thank you members for your questions that just to me demonstrate your real concern for the PTOs and the the great work that they're doing I didn't intend for this to take as long as we did but I'm I'm glad we got clarification I appreciate a good vote thank sure members we have motion remember. The motion to pass any debate members. A sum start do pass as amended any debate members. All in favor say aye. Those register pastor bill Paula does take so long but no no problem that thank you members of the. It was a very still with us. I feel like an extendable attention. Thank you Mr chairman represent a Mark Berry. DO in presenter bill Sir the members this is house bill thirteen sixty. Thank you Mr chairman and colleagues of this bill it this is a great bill in my mind because it provides it's zero impact on general revenue excuse me to Texas mascot but what it allows for is the establishment of the law enforcement check off program tax check off program as well as the law enforcement trust fund for families family really so what it does is that it will allow taxpayers to contribute their own dollars that they're choosing to the law enforcement family relief trust fund in the event that we have a law enforcement officer killed in the line of duty or terminal illness the secretary of public safety would be would have funds available to pay out up to of whatever amount that the Secretary the rules that they determine especially take into consideration the law of a lot of our law enforcement officers in the state of Arkansas their salaries run between anywhere between twenty five and thirty five thousand dollars on average in that you they have a a lot on officers killed in the line of duty is very difficult during a difficult time to be able to afford funeral expenses and expenses at the prime family might need so this bill would allow the secretary to meet we pay funds available to the family upon the death of a law enforcement officer killed in the line of duty and I believe you should have the impact statement on there and it's negative impact on revenue and be happy to take any questions one thing I might add we did this and I was a secretary the military we had a very similar problem is the US soldiers and sailors family trust fund and we were able to accumulate over two hundred thousand dollars in that fund to be able to provide relief to soldiers and and airmen during times of of need and I really think because our committee today is very pro law. On for Smith that we have the opportunity to be able to provide funds to our fallen officers families at a time when they need it most and I'd be happy to take any questions Mister chairman thank you thinkers and the members any questions. A good bill anybody will speak against a bill. For the bill for you close for you bill I appreciate your consideration and thank you Mr chairman for allowing me to present the bill. The motion to pass any debate all in favor say aye those registry pastor bill thank you Mr chairman thank you thank you for your patience. All right. Robert Hass June two years. Members will be House Bill thirteen eighty three. This recognize yourself Mr Johnson would start. Thank you Mr chair. Enter Spencer Hawks and I'd like this lady friend from the association of counties to come down for the bill as well. Yeah this bill would recognize your shop now. Thank you Mr chair Lindsay Bailey French association of Arkansas counties. How to answer. I think it was chair and thank you committee HB thirteen eighty three the purpose of this bill like set is brought by the association of counties to me minutes bill that we've seen a lot of here lately in fact I think one ran on the house floor earlier today but is to allow certain documents to be transmitted between county officials electronically and to create efficiency and reduce waste between county tax officials and clarify who that is the custodian tax records so it's a lot of clarification of who's actually been doing the job and who needs to be in statute and then again the ability to transfer these documents electronically if you guys have questions I would be open to that I do wanna explain because I ask miss French about the. Chart. In there I said you know we don't typically have charts in our bill so just before we get to any questions and kudos to BLR for being able to put a chart in the bill that is an existing code and all that they're doing you'll see this throughout the document is are changing county Clerk to the preparer of the tax books so that's reason that that document is in there and and you'll see that change made throughout thirty again it just goes to go with the the roles and who is doing what in county business. Not be open for any questions because we measured installation the bill any questions. Good he will speak against a bill. For the bill. Three bill Sir I'm close with motion to pass the motion to passionate but members. All in favor say aye opposed registry passed a bill. Thank Mister thank you Committee it was easy. Personal brochure in a room. Your brushes your first bill. They were never. US one point that out to the committee. We're gonna have fun now guys. Sure that's a good thing or bad thing it ain't public. A couple of all represented Hawks example here and make it quick and easy thank you Mr chair present to members this is going to House Bill thirteen forty five. I thank you my name is Keith Brooks Representative thirty one appreciate you Mr chairman and committee for many bring this bill this is brought to us as well by the association counties it is a relatively straightforward bill so currently property taxes are collected in the law it says they must be are as shall be collected from March the first through October fifteenth however there are a number of counties that go ahead and collect those early and so this is simply amending the law to allow them should they want to it is permissible language is not to require anything would allow them should they want to collect prior to March the first they would be able to do that currently there's a couple counties that do it so we've got representatives from Pulaski in garland county here today And plastic county since October the fourth has collected just a little over a million dollars in property taxes which they can go ahead and find on down to schools which is a positive thing I think we all say and then Garland County just yesterday collected a little over two hundred thousand dollars so again just permissive language within this amending the law to to allow to be done should counties have the ability want to do so we have to take any questions on the bill remeber. Thank you. I got to ask a question because you know your first bill or whatever but I really did I really am kind of curious if you're saying it's already being done in Pulaski and and did you say Hot Spring County religious Harland Garland County okay how are they able to do it if we haven't already passed the bill I'm just kind of curious that will be your question and if you would allow me to defer to one of our county collectors are to be glad to to bring about if you don't mind Mr. Thank you for the question of senator recognizes of mail. I repeat thank you Mr chair Rebecca Talcher Garland County tax collector I have actually worked in the collector's office since nineteen ninety eight and when I started in the office that's how they did it we mail them out over president's weekend somewhere along the way they were something in the law that said we could do it over that weekend and we always did well somewhere something changed in the law and it start changed March first. it's a new collectors have come in and pointed that out and said I don't know if you're breaking the law. So. It doesn't say we can't collected earlier anything is what we've always said but we just thought well the schools want the money early I would be. Ran out of town. If my school districts did not get that check in March. That's just what they're used to in our county. Okay any other questions members. Thank you ma'am anybody not as we speak against a bill. For the bill you have motion. The most reprimand corolla any debate members of their staff. Those regulations treated an outstanding job on the very first bill thank you Mister chair committee I appreciate you you have to do that but what Lane Jean to do and he's been here for like fifty years. I've been recording him and just watching his videos over and over so with that I understand. Eight is probably black and white right. All right members represent Collins you in room. Members will be the last one day's gonna be house bill thirteen seventy four. Thirteen seventy four. Thank you Mr chair thanks committee this bill thirteen seventy four myself and represent Jensen DISMANG. It's a wooden you can see would just strike out on that second page three and replace it with ten so that would allow charitable organization hold up to ten events before it has to start collecting sales tax on things like food and drinks that it sells at the events the general rule is that charities are tax exempt entities that don't collect sales tax after events but there is this line in code that deems them to be competing with a for profit business after a certain number of events so after they hit that number they have to start collecting sales tax and that number is the number that we would like to move to ten the reasons for them first the charity that is having a handful of events like this is just not as a practical matter competing with the continuous for profit businesses we have charities that do a handful of events and it's not the same as operating something on a permanent basis or even on a frequent basis like every weekend or something like that so it's not really serving the purpose of the law and the second reason to increase the cap is of course we want to be encouraging these events fund raising is is the way that these charities can't exist they serve a public purpose by definition they're often a more efficient local private stand in for government and then of course the events themselves are good for communities every dollar spent goes into the economy the events bring people out of then go buy things and patronize all businesses in the area and it's the kind of grassroots economic activity that we often talk about and want for our small towns in for a big towns. there's a DFA has a small fiscal impact it's based on a static scoring so it doesn't include the economic activity in this the tax revenue that these events generate fit word to be scored dynamically I've no doubt that we'd be coming out ahead both in terms of revenue and of course more importantly in terms of the life that we're breathing into our neighborhoods in our small businesses so that's the the goal to remove a roadblock to allow these charities to do the work that they do in our communities and I'd be happy to answer any questions. It worsened age of question thank you represent colleges noticed on the impact statement says it does not have an effective date is on purpose well it wasn't something that was requested by B. O. R. and the drafting of it I think that's if you're changing the sales tax rate you do have to have an effective date in this case we're not this is something that is accumulation of a number of events over the course of years I don't think that we need an effective date on this on my take on it. No general questions. All you want to speak to this rule the movers one reason why I would you know we talk about homes in these bills up because it cost cost being a costume one reason why we agreed run this bill is because we feel like this is if the if I was score dynamically which I don't and that we've always said if I score static but who is a dynamic scoring with a lot of this money to actually bring money back into the local communities says one reason why we we won't put this bill from the Committee Paul you'll speak to that Sir hi thank you Mr chair Paul Goehring DFA. Of and just when a letter of the committee know that represent Collins in the constituencies that would be affected by this bill we had conversations about that the draft language and we this is kind of how we arrived on how to accomplish the ability for these terrible organizations to have more opportunities to have fund raising events throughout the year. so but we did perfect prepare a fiscal impact statement for FY twenty two in FY twenty three as required as an easy noted this does not have an effective date of this would be effective ninety days after adjournment civil we used a a revenue impact it assumed that the effective date would be October one which would provide for eight months of of reduce collections and in the next fiscal year which resulted in a in one hundred four thousand dollars in reduced daily sales tax revenues. For FY twenty three for full fiscal year we provided the impact to be of a hundred fifty six thousand in law state sales tax revenue as represent Collins mentioned in the in the presentation this is a stack impact the under Arkansas Code 26-52-430 terrible organization is unable to sell exempt if they are competing with for profit businesses we certainly understand that when these fundraising events may occur in the form of a of a festival or fair they are quite often are are designed to draw people to a neighborhood where there are other for profit businesses operating and if we're doing a fiscal impact statement it is based upon is a static score not a dynamic score and the information that we used from our system was used in derived from this impact as opposed to the the last bill that we discussed were we were using more statistical information rather than actual reported sales by these types of organizations I'd be happy to answer any questions regarding the fiscal impact or and any other questions that the committee might have thank Paul really questions. You may also speak against the bill. For the bill. The college will close rebuilder sure I'm not close to the bill and I appreciate a good vote thank members heard the explosion of the bill we have a motion. The motion do pass any debate all in favor say aye. Posed red Lacy passed bill thank you Committee welcome thank members obligated to within good work today thank as well five six bills will. So yes we will take it next Thursday we're taking the House Bill ten sixty five and that's the. A Representative Thank Pinkerton's bill. And we're not we'll take a vote on that this one because it's got I think that the cost on that a couple million dollars so but he's we was going to present this bill anyway Committee and sort of take that up next Thursday and also we're taking a kind of a special bill to representatives it's the patient law and I think a lot of folks knows the situation with his granddaughter so although has does have costs with that just out of respect for a. Russian leaves in this family will take the bill up and so in with the windows to bills next Thursday coming back one quick thing everybody understands the debt Fortner is not here today represent Fortner his wife is going through some pretty per pretty brutal bad stuff so please keep him his family and his wife and all prayers are there anything else. The meeting thirty days Tuesday. Our. This this coming Thursday this is coming Thursday would be the next Thursday. All right were made were made were made in this case and we're meeting this coming Thursday all