Texas House Bill HB2187

Texas 2011 - 82nd Regular

• Out of House Committee: 5/9/11
• Introduced: 3/4/11
• Refer: 3/8/11
• Report Pass: 4/28/11

Caption

Relating to the imposition of and a limitation on the sales tax imposed on certain vessels.

Impact

The enactment of HB 2187 would alter existing tax liabilities associated with the sale of recreational vessels in Texas, specifically targeting those preparing for out-of-state transactions. By instituting an $18,000 cap on sales tax for taxable boats or motors, the bill aims to lessen the financial burden on consumers who purchase boats. It is expected to encourage more transactions in the state, facilitating an economic environment that supports the boating industry while also protecting the state's fiscal interests related to tax collection.

Summary

House Bill 2187 aims to address the taxation of vessels by imposing and limiting the sales tax on certain boat transactions. The bill modifies the Parks and Wildlife Code and the Tax Code to provide specific exemptions for vessel repairs and modifications. It establishes that sales taxes will not apply if a boat or motor is sold in Texas for use in another state or nation and is taken out of Texas within a specified time frame. Additionally, if a vessel is docked for repairs and later removed from the state, those transactions will also enjoy tax exemption under certain conditions.

Contention

Debate surrounding HB 2187 centers on concerns regarding revenue implications for the state and local governments. Supporters advocate its potential to boost the boating industry and increase sales by making Texas a more favorable marketplace for vessel purchases. Conversely, critics worry that limiting sales tax revenue could impact public services and infrastructure funding, leading to discussions on the long-term sustainability of such tax policies. Potential adjustments in the allocation of tax proceeds from the amended sales tax structure could also emerge as contentious areas during legislative discussions.