LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION May 9, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3923 by Wray (relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities that transport ready-mixed concrete; adding a provision subject to a criminal penalty.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB3923, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,628,000) for the 2016-17 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, 84TH LEGISLATIVE REGULAR SESSION
May 9, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3923 by Wray (relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities that transport ready-mixed concrete; adding a provision subject to a criminal penalty.), Committee Report 1st House, Substituted
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3923 by Wray (relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities that transport ready-mixed concrete; adding a provision subject to a criminal penalty.), Committee Report 1st House, Substituted
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
HB3923 by Wray (relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities that transport ready-mixed concrete; adding a provision subject to a criminal penalty.), Committee Report 1st House, Substituted
HB3923 by Wray (relating to the computation of cost of goods sold for purposes of the franchise tax by taxable entities that transport ready-mixed concrete; adding a provision subject to a criminal penalty.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB3923, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,628,000) for the 2016-17 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 HB3923, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,628,000) for the 2016-17 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 2016 $0 2017 $0 2018 $0 2019 $0 2020 $0
2016 $0
2017 $0
2018 $0
2019 $0
2020 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2016 ($1,301,000) 2017 ($1,327,000) 2018 ($1,353,000) 2019 ($1,380,000) 2020 ($1,408,000)
Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2016 ($1,301,000) 2017 ($1,327,000) 2018 ($1,353,000) 2019 ($1,380,000) 2020 ($1,408,000)
2016 ($1,301,000)
2017 ($1,327,000)
2018 ($1,353,000)
2019 ($1,380,000)
2020 ($1,408,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, by adding a provision for determining cost of goods sold for taxable entities that transport ready-mixed concrete. The added provision would allow such taxable entities to subtract as a cost of goods sold distribution costs regardless of whether the taxable entities own the ready-mix concrete. Current law in Section 171.1012(e)(3) excludes distribution costs from cost of goods sold. This bill would provide an exception to that provision for taxable entities that transport ready-mixed concrete. The bill would take effect January 1, 2016 and apply only to reports due on or after that date.
Methodology
The estimated fiscal impact is based on information from the Texas Aggregates & Concrete Association and on the Comptroller's franchise tax data bases.
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