LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION May 2, 2013 TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3742 by Lavender (To repeal certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration; providing penalties.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3742, As Introduced: a negative impact of ($81,387,439,000) through the biennium ending August 31, 2015. The imposition of a state Value Added Tax would offset some of these losses; however the amount of revenue collections from the state VAT cannot be determined at this time.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
May 2, 2013
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3742 by Lavender (To repeal certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration; providing penalties.), As Introduced
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3742 by Lavender (To repeal certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration; providing penalties.), As Introduced
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB3742 by Lavender (To repeal certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration; providing penalties.), As Introduced
HB3742 by Lavender (To repeal certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration; providing penalties.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3742, As Introduced: a negative impact of ($81,387,439,000) through the biennium ending August 31, 2015. The imposition of a state Value Added Tax would offset some of these losses; however the amount of revenue collections from the state VAT cannot be determined at this time.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3742, As Introduced: a negative impact of ($81,387,439,000) through the biennium ending August 31, 2015.
The imposition of a state Value Added Tax would offset some of these losses; however the amount of revenue collections from the state VAT cannot be determined at this time.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2014 ($39,465,916,000) 2015 ($41,921,523,000) 2016 ($41,921,523,000) 2017 ($41,921,523,000) 2018 ($41,921,523,000)
2014 ($39,465,916,000)
2015 ($41,921,523,000)
2016 ($41,921,523,000)
2017 ($41,921,523,000)
2018 ($41,921,523,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromAll Other Non-GR Related Funds Probable Revenue (Loss) fromLocal Property Taxes Probable Revenue (Loss) fromLocal Sales Taxes and other Non-Property Taxes 2014 ($39,465,916,000) ($5,666,696,000) $0 ($7,209,059,000) 2015 ($41,921,523,000) ($5,419,700,000) ($47,427,748,000) ($7,499,827,000) 2016 ($41,921,523,000) ($5,419,700,000) ($49,671,789,000) ($7,793,507,000) 2017 ($41,921,523,000) ($5,419,700,000) ($52,145,657,000) ($8,098,933,000) 2018 ($41,921,523,000) ($5,419,700,000) ($54,741,588,000) ($8,416,577,000)
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromAll Other Non-GR Related Funds Probable Revenue (Loss) fromLocal Property Taxes Probable Revenue (Loss) fromLocal Sales Taxes and other Non-Property Taxes 2014 ($39,465,916,000) ($5,666,696,000) $0 ($7,209,059,000) 2015 ($41,921,523,000) ($5,419,700,000) ($47,427,748,000) ($7,499,827,000) 2016 ($41,921,523,000) ($5,419,700,000) ($49,671,789,000) ($7,793,507,000) 2017 ($41,921,523,000) ($5,419,700,000) ($52,145,657,000) ($8,098,933,000) 2018 ($41,921,523,000) ($5,419,700,000) ($54,741,588,000) ($8,416,577,000)
2014 ($39,465,916,000) ($5,666,696,000) $0 ($7,209,059,000)
2015 ($41,921,523,000) ($5,419,700,000) ($47,427,748,000) ($7,499,827,000)
2016 ($41,921,523,000) ($5,419,700,000) ($49,671,789,000) ($7,793,507,000)
2017 ($41,921,523,000) ($5,419,700,000) ($52,145,657,000) ($8,098,933,000)
2018 ($41,921,523,000) ($5,419,700,000) ($54,741,588,000) ($8,416,577,000)
Fiscal Analysis
The bill would make substantial modification to the state and local tax system. The bill would be entitled the "Texas Tax Reform Act of 2013". Article 1 of the bill would repeal the state sales and use tax, the motor vehicle sales and rental taxes, the cigarette tax, the cigar and tobacco product tax, the hotel occupancy tax, the manufactured housing sales tax, the controlled substances tax, the boat and boat motor sales tax, the fireworks tax, the motor fuels taxes, the franchise tax, the cement production tax, all miscellaneous gross receipts taxes, the mixed beverage tax, all business permit taxes, the natural gas production tax, the oil production tax, the sulphur production tax, and the inheritance tax effective on September 1, 2013. Article 2 - 4 of the bill would impose a state Value Added Tax at the rate of 7 percent and allow local taxing entities to impose a local option municipal Value Added Tax of up 3 percent. Article 5 of the bill would bar the state and most political subdivisions of the state from levying property taxes. Article 6 of the bill would make various amendments to the Education Code regarding the school finance system.
The bill would make substantial modification to the state and local tax system. The bill would be entitled the "Texas Tax Reform Act of 2013".
Article 1 of the bill would repeal the state sales and use tax, the motor vehicle sales and rental taxes, the cigarette tax, the cigar and tobacco product tax, the hotel occupancy tax, the manufactured housing sales tax, the controlled substances tax, the boat and boat motor sales tax, the fireworks tax, the motor fuels taxes, the franchise tax, the cement production tax, all miscellaneous gross receipts taxes, the mixed beverage tax, all business permit taxes, the natural gas production tax, the oil production tax, the sulphur production tax, and the inheritance tax effective on September 1, 2013.
Article 2 - 4 of the bill would impose a state Value Added Tax at the rate of 7 percent and allow local taxing entities to impose a local option municipal Value Added Tax of up 3 percent.
Article 5 of the bill would bar the state and most political subdivisions of the state from levying property taxes.
Article 6 of the bill would make various amendments to the Education Code regarding the school finance system.
Methodology
The above tables represent the revenue loss associated with repealing the state taxes specified in the bill. The imposition of a state Value Added Taxes would offset some of these losses; however the amount of revenue collections from the state VAT cannot be determined at this time.
Technology
There would be substantial technology costs associated with reprogramming the Comptroller of Public Accounts and Texas Education Agencies IT systems to implement the provisions of the bill.
Local Government Impact
The above tables represent the revenue loss associated with repealing local jurisdiction taxes specified in the bill. The imposition of a local option municipal Value Added Taxes would offset some of these losses; however the amount of revenue collections from the local VAT cannot be determined at this time.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD