LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION April 17, 2013 TO: Honorable Tommy Williams, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB781 by Hinojosa (Relating to the exclusion of certain transportation services costs in determining total revenue for purposes of the franchise tax.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB781, As Introduced: an impact of $0 through the biennium ending August 31, 2015. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,688,000) for the 2014-15 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
April 17, 2013
TO: Honorable Tommy Williams, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB781 by Hinojosa (Relating to the exclusion of certain transportation services costs in determining total revenue for purposes of the franchise tax.), As Introduced
TO: Honorable Tommy Williams, Chair, Senate Committee on Finance
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB781 by Hinojosa (Relating to the exclusion of certain transportation services costs in determining total revenue for purposes of the franchise tax.), As Introduced
Honorable Tommy Williams, Chair, Senate Committee on Finance
Honorable Tommy Williams, Chair, Senate Committee on Finance
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB781 by Hinojosa (Relating to the exclusion of certain transportation services costs in determining total revenue for purposes of the franchise tax.), As Introduced
SB781 by Hinojosa (Relating to the exclusion of certain transportation services costs in determining total revenue for purposes of the franchise tax.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB781, As Introduced: an impact of $0 through the biennium ending August 31, 2015. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,688,000) for the 2014-15 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for SB781, As Introduced: an impact of $0 through the biennium ending August 31, 2015.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,688,000) for the 2014-15 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2014 $0 2015 $0 2016 $0 2017 $0 2018 $0
2014 $0
2015 $0
2016 $0
2017 $0
2018 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2014 ($2,339,000) 2015 ($2,349,000) 2016 ($2,393,000) 2017 ($2,351,000) 2018 ($2,331,000)
Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2014 ($2,339,000) 2015 ($2,349,000) 2016 ($2,393,000) 2017 ($2,351,000) 2018 ($2,331,000)
2014 ($2,339,000)
2015 ($2,349,000)
2016 ($2,393,000)
2017 ($2,351,000)
2018 ($2,331,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, to add an exclusion from total revenue for certain taxable entities primarily engaged in transporting commodities by waterways. The exclusion would apply to taxable entities that do not subtract cost of goods sold from total revenue in computing taxable margin. The exclusion would be for the direct costs of providing inbound and outbound transportation services by intrastate or interstate waterways to the same extent a taxable entity selling real or tangible personal property would be authorized to subtract those costs as costs of goods sold. The bill would take effect January 1, 2014, and apply to reports due on or after that date.
Methodology
The estimate is based on information in the Comptroller's franchise tax data files on taxable entities engaged in water transportation and on an estimate of the additional subtractions the bill would provide taxable entities that currently do not subtract cost of goods sold to calculate franchise tax liability.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD