Committee advances bill to create statewide electronic filing for municipal B&O taxes

The Senate Committee on Government Organization voted to report House Bill 44-18 to the full Senate with the recommendation that it pass and be first referred to the Finance Committee. Counsel told the committee the bill would require the Tax Commissioner to design and implement an electronic data processing system to facilitate filing and collection of municipal business and occupation (B&O) taxes once participating municipalities representing an aggregate $30,000,000 in anticipated annual B&O tax revenue have committed to participate.

Counsel said the Tax Commissioner would not be required to implement the system until the $30 million threshold is reached and that the system must be available for use the July 1 following at least 12 months after that determination. The bill authorizes the Tax Commissioner to retain a 1% administrative fee of gross collections for each participating municipality to help offset operating costs.

A fiscal note provided by the Tax and Revenue Department on an earlier, broader version estimated annual costs of about $196,000; counsel explained that, with the 1% administrative fee generating approximately $300,000 in the committee substitute, the fee could entirely offset the commissioner's estimated costs. Senator from Summers asked whether the bill permits new municipal B&O taxes; counsel clarified the measure is strictly a payment mechanism and does not authorize new B&O taxes or increase rates. The committee adopted the motion to report the bill to the full Senate.