LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION May 2, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2250 by Darby (relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB2250, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,561,000) for the 2018-19 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, 85TH LEGISLATIVE REGULAR SESSION
May 2, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2250 by Darby (relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), Committee Report 1st House, Substituted
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2250 by Darby (relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), 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
HB2250 by Darby (relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), Committee Report 1st House, Substituted
HB2250 by Darby (relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB2250, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,561,000) for the 2018-19 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 HB2250, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($2,561,000) for the 2018-19 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 2018 $0 2019 $0 2020 $0 2021 $0 2022 $0
2018 $0
2019 $0
2020 $0
2021 $0
2022 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2018 $0 2019 ($2,561,000) 2020 ($2,628,000) 2021 ($2,693,000) 2022 ($2,760,000)
Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund304 2018 $0 2019 ($2,561,000) 2020 ($2,628,000) 2021 ($2,693,000) 2022 ($2,760,000)
2018 $0
2019 ($2,561,000)
2020 ($2,628,000)
2021 ($2,693,000)
2022 ($2,760,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, to amend the definition for activities engaged in retail trade for purposes of the franchise tax by including activities involving the rental of industrial uniforms, industrial garments, and industrial linen supplies that are classified as linen supply and industrial launderers in the 1987 Standard Industrial Classification Manual. The bill would take effect January 1, 2019.
Methodology
The estimated fiscal impact is based on franchise tax data for taxable entities in the included activities and on the Comptroller's 2018-2019 Biennial Revenue Estimate. Under the bill, taxable entities would calculate their tax liability using the 0.375 percent rate instead of 0.75 percent under current law.
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