LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION March 21, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2381 by Frullo (Relating to the applicability of the sales and use tax to certain insurance services.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2381, As Introduced: a negative impact of ($30,000) through the biennium ending August 31, 2019.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
March 21, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2381 by Frullo (Relating to the applicability of the sales and use tax to certain insurance services.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2381 by Frullo (Relating to the applicability of the sales and use tax to certain insurance services.), 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
HB2381 by Frullo (Relating to the applicability of the sales and use tax to certain insurance services.), As Introduced
HB2381 by Frullo (Relating to the applicability of the sales and use tax to certain insurance services.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2381, As Introduced: a negative impact of ($30,000) through the biennium ending August 31, 2019.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2381, As Introduced: a negative impact of ($30,000) 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 ($30,000) 2020 ($30,000) 2021 ($30,000) 2022 ($30,000)
2018 $0
2019 ($30,000)
2020 ($30,000)
2021 ($30,000)
2022 ($30,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 2018 $0 ($20,000) 2019 ($30,000) $0 2020 ($30,000) $0 2021 ($30,000) $0 2022 ($30,000) $0
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromState Highway Fund6 2018 $0 ($20,000) 2019 ($30,000) $0 2020 ($30,000) $0 2021 ($30,000) $0 2022 ($30,000) $0
2018 $0 ($20,000)
2019 ($30,000) $0
2020 ($30,000) $0
2021 ($30,000) $0
2022 ($30,000) $0
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxation of certain insurance services. Section 151.0039 would be amended to exclude from the definition of "insurance service", and thus from taxability, a service performed by a licensed certified public accountancy firm, if less than one percent of the firm's revenue in a calendar year is from services that otherwise constitute insurance service. The bill would take effect January 1, 2018.
Methodology
The fiscal implications were estimated based on Comptroller data for sales tax remittances from certified public accountancy firms and audit experience regarding provision of taxable insurance services by such firms.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. Fiscal implications for units of local government would be negligible.
Local Government Impact
No significant 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