LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION April 25, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1682 by Bohac (Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1682, As Introduced: a negative impact of ($5,900,000) through the biennium ending August 31, 2019.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
April 25, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1682 by Bohac (Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB1682 by Bohac (Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.), 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
HB1682 by Bohac (Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.), As Introduced
HB1682 by Bohac (Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1682, As Introduced: a negative impact of ($5,900,000) through the biennium ending August 31, 2019.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1682, As Introduced: a negative impact of ($5,900,000) through the biennium ending August 31, 2019.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 $0 2019 ($5,900,000) 2020 ($6,100,000) 2021 ($6,300,000) 2022 ($6,600,000)
2018 $0
2019 ($5,900,000)
2020 ($6,100,000)
2021 ($6,300,000)
2022 ($6,600,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities 2018 $0 ($5,200,000) ($1,000,000) ($300,000) 2019 ($5,900,000) $0 ($1,100,000) ($400,000) 2020 ($6,100,000) $0 ($1,200,000) ($400,000) 2021 ($6,300,000) $0 ($1,200,000) ($400,000) 2022 ($6,600,000) $0 ($1,300,000) ($400,000) Fiscal Year Probable Revenue (Loss) fromCounties & Special Districts 2018 ($200,000) 2019 ($200,000) 2020 ($200,000) 2021 ($200,000) 2022 ($200,000)
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities 2018 $0 ($5,200,000) ($1,000,000) ($300,000) 2019 ($5,900,000) $0 ($1,100,000) ($400,000) 2020 ($6,100,000) $0 ($1,200,000) ($400,000) 2021 ($6,300,000) $0 ($1,200,000) ($400,000) 2022 ($6,600,000) $0 ($1,300,000) ($400,000)
2018 $0 ($5,200,000) ($1,000,000) ($300,000)
2019 ($5,900,000) $0 ($1,100,000) ($400,000)
2020 ($6,100,000) $0 ($1,200,000) ($400,000)
2021 ($6,300,000) $0 ($1,200,000) ($400,000)
2022 ($6,600,000) $0 ($1,300,000) ($400,000)
Fiscal Year Probable Revenue (Loss) fromCounties & Special Districts 2018 ($200,000) 2019 ($200,000) 2020 ($200,000) 2021 ($200,000) 2022 ($200,000)
2018 ($200,000)
2019 ($200,000)
2020 ($200,000)
2021 ($200,000)
2022 ($200,000)
Fiscal Analysis
The bill would amend Section 151.328 of the Tax Code relating to sales and use taxation of aircraft. The bill would amend Subsection (b) to provide that repair, remodeling, and maintenance services to all aircraft are exempt. Current law limits this exemption to services performed with respect to aircraft used as certificated or licensed carriers of persons or property, used for flight instruction, or used for certain agricultural purposes. The bill would amend Subsections (d) and (e) to provide that machinery, tools, supplies, and equipment used exclusively in the repair, remodeling, or maintenance of all aircraft are exempt, as well as tangible personal property affixed, attached, or placed in all aircraft. Current law limits these exemptions to aircraft used as certificated or licensed carriers of persons or property or used for flight instruction. This bill would take effect September 1, 2017.
Methodology
The fiscal implications were estimated based on data from Comptroller tax files and industry sources on amounts subject to Texas sales and use tax of businesses performing aircraft repair and maintenance.Pursuant to Proposition 7 (2015), any sales tax collections in excess of $28 billion and less than$30.5 billion will be deposited into the State Highway Fund. Because total 2018 collections areprojected to fall in that range, the 2018 revenue loss is from the State Highway Fund instead ofGeneral Revenue.
Local Government Impact
There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions. The estimates of those losses are displayed in the above tables.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD