LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 4, 2011 TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3509 by Villarreal (Relating to the computation of taxable margin for purposes of the franchise tax by a taxable entity principally engaged in Internet hosting.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3509, As Introduced: an impact of $0 through the biennium ending August 31, 2013. The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,000,000) for the 2012-13 biennieum. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 4, 2011
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3509 by Villarreal (Relating to the computation of taxable margin for purposes of the franchise tax by a taxable entity principally engaged in Internet hosting.), As Introduced
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB3509 by Villarreal (Relating to the computation of taxable margin for purposes of the franchise tax by a taxable entity principally engaged in Internet hosting.), As Introduced
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB3509 by Villarreal (Relating to the computation of taxable margin for purposes of the franchise tax by a taxable entity principally engaged in Internet hosting.), As Introduced
HB3509 by Villarreal (Relating to the computation of taxable margin for purposes of the franchise tax by a taxable entity principally engaged in Internet hosting.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3509, As Introduced: an impact of $0 through the biennium ending August 31, 2013. The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,000,000) for the 2012-13 biennieum. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3509, As Introduced: an impact of $0 through the biennium ending August 31, 2013. The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,000,000) for the 2012-13 biennieum. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3509, As Introduced: an impact of $0 through the biennium ending August 31, 2013.
The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,000,000) for the 2012-13 biennieum. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 $0 2013 $0 2014 $0 2015 $0 2016 $0
2012 $0
2013 $0
2014 $0
2015 $0
2016 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2012 ($2,000,000) 2013 ($2,000,000) 2014 ($2,000,000) 2015 ($2,000,000) 2016 ($2,000,000)
Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2012 ($2,000,000) 2013 ($2,000,000) 2014 ($2,000,000) 2015 ($2,000,000) 2016 ($2,000,000)
2012 ($2,000,000)
2013 ($2,000,000)
2014 ($2,000,000)
2015 ($2,000,000)
2016 ($2,000,000)
Fiscal Analysis
This bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, by changing the definition of a receipt from business done in Texas for certain taxpayers. The bill would define "cloud computing service" and "cloud computing service provider." The bill would provide that a receipt from cloud computing services is a Texas receipt if the customer to whom the service is provided is located in this state. The bill would take effect on September 1, 2011 and apply to a report due on or after that date.
Methodology
Under current law the business receipt for providing a service is sourced to where the service is performed. This bill would change the procedure for taxable entities providing cloud computing services. The estimated fiscal impact is based on the information from the Comptroller's franchise tax database.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KK, SD
JOB, KK, SD