ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 1248

STATE OF NEW JERSEY

DATED: NOVEMBER 6, 1997

      The Assembly Appropriations Committee reports favorably Senate Bill No. 1248 (1R).

      Senate Bill No. 1248 (1R) exempts from the tax imposed under the "Sales and Use Tax Act" those receipts realized from sales of tangible personal property purchased by farmers for use and consumption directly and primarily in the production of agricultural and horticultural commodities. Under current law, the exemption only applies for tangible personal property used directly and exclusively on farms.

      As reported, this bill is identical to Assembly Bill No. 2942 (LeFevre/Blee).

FISCAL IMPACT:

      In a fiscal estimate prepared by the Office of Legislative Services (OLS), the OLS notes that there are no data available to estimate the precise cost to the State of the broadened exemption. The data that are available suggest the change would have a negligible impact on sales tax revenue. Based on a number of assumptions concerning farm equipment purchases used more than 50 percent but less than 100 percent of the time in agricultural production, the annual sales tax loss at any given time may range between $300,000 and $600,000.