Fiscal Note & Local Impact Statement

125 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43215-6136 ˛ Phone: (614) 466-3615

˛ Internet Web Site: http://www.lsc.state.oh.us/

BILL:

Am. Sub. S.B. 164

DATE:

May 26, 2004

STATUS:

As Enacted—Effective June 17, 2004

SPONSOR:

Sen. Schuler

LOCAL IMPACT STATEMENT REQUIRED:

No —

No local cost

 


CONTENTS:

Allows liquor agency stores to sell spirituous liquor on Sunday, allows for the transfer of D-4 permits in certain conditions, and declares an emergency

 

State Fiscal Highlights

 

STATE FUND

FY 2005

FY 2006

FUTURE YEARS

General Revenue Fund

     Revenues

Potential gain from an increase in liquor profits and processing fees transferred from Fund 043

Potential gain from an increase in liquor profits and processing fees transferred from Fund 043

Potential gain from an increase in liquor profits and processing fees transferred from Fund 043

     Expenditures

-0-

-0-

-0-

Liquor Control Fund (Fund 043)

     Revenues

Potential gain from an increase in liquor sales and processing fees from transferred D-4 permits

Potential gain from an increase in liquor sales and processing fees from transferred D-4 permits

Potential gain from an increase in liquor sales and processing fees from transferred D-4 permits

     Expenditures

Potential minimal increase for liquor merchandise and agency commission

Potential minimal increase for liquor merchandise and agency commission

Potential minimal increase for liquor merchandise and agency commission

Note:  The state fiscal year is July 1 through June 30.  For example, FY 2005 is July 1, 2004 – June 30, 2005.

 

·        This will increase the amount of spirituous liquor sales in the state, resulting in an increase in revenue to the Liquor Control Fund (Fund 043).  The Liquor Control Fund is used to fund the operating expenses of the Division of Liquor Control and the Liquor Control Commission and is used to pay debt service on certain Department of Development bonds.  Any money not used for these purposes is then transferred to the GRF.  An increase in sales will likely require an increase in merchandise purchased by the state and an increase in commission paid to agency stores.  However, an increase in sales will offset any increase in expenditures.

·        This bill allows a D-4 permit holder to transfer a permit to a new location.  The processing fee to transfer a liquor permit is $100.  The processing fee is deposited in the Liquor Control Fund.  The Liquor Control Fund is distributed among agency store commissions, taxes, operating costs for the Division of Liquor Control, and the General Revenue Fund.

 

·        Depending on the number of agency stores that would qualify for Sunday sales and would get to do so, the bill could increase liquor profits by millions of dollars annually.

Local Fiscal Highlights

 

·        No direct fiscal impact on political subdivisions.

 


 

Detailed Fiscal Analysis

 

This bill allows the sale of spirituous liquor on Sundays by liquor agency stores.  However, this will only apply to agency stores in precincts where the voters approve the sale of spirituous liquor on Sundays.  Currently, there are a total of 407 agency stores.  This will increase the amount of spirituous liquor sales in the state, resulting in a revenue gain in the Liquor Control Fund and the GRF.  Liquor profits are deposited in the Liquor Control Fund (Fund 043).  The Liquor Control Fund is used to fund the operating expenses of the Division of Liquor Control and the Liquor Control Commission and is used to pay debt service on certain Department of Development bonds.  Any money not used for these purposes is then transferred to the GRF.  In FY 2003, for example, the Division transferred $112 million to the GRF.  An increase in sales will likely require an increase in merchandise purchased by the state and an increase in commission paid to agency stores.  However, an increase in sales will offset any increase in expenditures.

Additional Liquor Profits and Sales Tax Estimates from Sunday Sales of Liquor

 

Liquor sales are already available on Sundays in certain establishments such as bars, restaurants, and other venues with appropriate licenses.  The additional purchases would occur in other locations where liquor sales are currently prohibited on Sundays.  The Legislation Service Commission estimates that the bill may potentially increase state revenues by about $12.4 million per year.  Liquor profits would increase by about $9.2 million annually.  State sales taxes will increase by $2.0 million per year.  The liquor gallonage tax is expected to increase by up to $1.2 million per year.

 

These estimates are based on daily sales of liquor, adjusted for sales already occurring on Sundays in establishments allowed to sell liquor.  Estimates are also based on liquor profits as a percentage of sales, average sales tax per gallon and liquor gallonage taxes applied to the additional purchases.  However, estimated additional revenues will be limited by the number of precincts where the voters approve the sale of spirituous liquor on Sundays.

 


Transfer of a D-4 Permit to a New Location

 

            A D-4 permit is issued to a private club and allows for the sale of beer and any intoxicating liquor to members only for on premises consumption only, until 1:00 am.  This bill allows the holder of a D-4 permit to transfer the location of the permit and sell beer and wine at a new location if that location is in an election precinct in which the sale of beer and wine is permitted.  The Division of Liquor Control charges a $100 processing fee for the transfer of a liquor permit, which is deposited into the Liquor Control Fund (Fund 043), which is then distributed among agency store commissions, taxes, operating costs for the Division of Liquor Control, and the General Revenue Fund.

 

 

 

LSC fiscal staff:  Jeremie Newman, Budget Analyst

                         Jean Botomogno, Economist

 

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