LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 6, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB351 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB351, As Introduced: a negative impact of ($1,240,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($680,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 6, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB351 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB351 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB351 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
HB351 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB351, As Introduced: a negative impact of ($1,240,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($680,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
Estimated Two-year Net Impact to General Revenue Related Funds for HB351, As Introduced: a negative impact of ($1,240,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($680,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
General Revenue-Related Funds, Six-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2015 ($80,000) 2016 ($560,000) 2017 ($600,000) 2018 ($640,000) 2019 ($680,000) 2020 ($720,000)
2015 ($80,000)
2016 ($560,000)
2017 ($600,000)
2018 ($640,000)
2019 ($680,000)
2020 ($720,000)
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($80,000) 2017 ($600,000) 2018 ($640,000) 2019 ($680,000) 2020 ($720,000)
2016 ($80,000)
2017 ($600,000)
2018 ($640,000)
2019 ($680,000)
2020 ($720,000)
All Funds, Six-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2015 ($80,000) $0 $0 $0 2016 ($560,000) ($100,000) ($40,000) ($20,000) 2017 ($600,000) ($110,000) ($40,000) ($20,000) 2018 ($640,000) ($110,000) ($40,000) ($20,000) 2019 ($680,000) ($110,000) ($40,000) ($20,000) 2020 ($720,000) ($110,000) ($40,000) ($20,000) The above table assumes the bill takes immediate effect. The table below assumes the bill takes effect on September 1, 2015. Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($80,000) $0 $0 $0 2017 ($600,000) ($110,000) ($40,000) ($20,000) 2018 ($640,000) ($110,000) ($40,000) ($20,000) 2019 ($680,000) ($110,000) ($40,000) ($20,000) 2020 ($720,000) ($110,000) ($40,000) ($20,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015. Methodology U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. Effects on units of local government were estimated proportionally. If the bill were to take immediate effect, the additional items would be eligible for exemption during the August 2015 tax holiday. This would principally impact fiscal 2016 revenues, but there would be some effect in fiscal 2015 due to estimated prepayments of tax. If the bill were to take effect September 1, 2015 the first affected tax holiday would be that of August 2016. Local Government Impact There would be a proportional loss of sales and tax revenue from local taxing jurisdictions. Source Agencies:304 Comptroller of Public Accounts LBB Staff: UP, KK
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2015 ($80,000) $0 $0 $0 2016 ($560,000) ($100,000) ($40,000) ($20,000) 2017 ($600,000) ($110,000) ($40,000) ($20,000) 2018 ($640,000) ($110,000) ($40,000) ($20,000) 2019 ($680,000) ($110,000) ($40,000) ($20,000) 2020 ($720,000) ($110,000) ($40,000) ($20,000)
2015 ($80,000) $0 $0 $0
2016 ($560,000) ($100,000) ($40,000) ($20,000)
2017 ($600,000) ($110,000) ($40,000) ($20,000)
2018 ($640,000) ($110,000) ($40,000) ($20,000)
2019 ($680,000) ($110,000) ($40,000) ($20,000)
2020 ($720,000) ($110,000) ($40,000) ($20,000)
The above table assumes the bill takes immediate effect. The table below assumes the bill takes effect on September 1, 2015.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($80,000) $0 $0 $0 2017 ($600,000) ($110,000) ($40,000) ($20,000) 2018 ($640,000) ($110,000) ($40,000) ($20,000) 2019 ($680,000) ($110,000) ($40,000) ($20,000) 2020 ($720,000) ($110,000) ($40,000) ($20,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015. Methodology U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. Effects on units of local government were estimated proportionally. If the bill were to take immediate effect, the additional items would be eligible for exemption during the August 2015 tax holiday. This would principally impact fiscal 2016 revenues, but there would be some effect in fiscal 2015 due to estimated prepayments of tax. If the bill were to take effect September 1, 2015 the first affected tax holiday would be that of August 2016.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($80,000) $0 $0 $0 2017 ($600,000) ($110,000) ($40,000) ($20,000) 2018 ($640,000) ($110,000) ($40,000) ($20,000) 2019 ($680,000) ($110,000) ($40,000) ($20,000) 2020 ($720,000) ($110,000) ($40,000) ($20,000)
2016 ($80,000) $0 $0 $0
2017 ($600,000) ($110,000) ($40,000) ($20,000)
2018 ($640,000) ($110,000) ($40,000) ($20,000)
2019 ($680,000) ($110,000) ($40,000) ($20,000)
2020 ($720,000) ($110,000) ($40,000) ($20,000)
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015.
Methodology
U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. Effects on units of local government were estimated proportionally. If the bill were to take immediate effect, the additional items would be eligible for exemption during the August 2015 tax holiday. This would principally impact fiscal 2016 revenues, but there would be some effect in fiscal 2015 due to estimated prepayments of tax. If the bill were to take effect September 1, 2015 the first affected tax holiday would be that of August 2016.
Local Government Impact
There would be a proportional loss of sales and tax revenue from local taxing jurisdictions.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK
UP, KK