LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION April 14, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2692 by Wray (relating to taxes and fees imposed on cigarettes and other tobacco products, including an exemption to the cigarette tax, related administrative matters, and the elements of certain related offenses.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB2692, Committee Report 1st House, Substituted: a positive impact of $11,974,000 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,149,000 for the 2018-19 biennium. Any gain to the Property Tax Relief Fund will reduce an equal amount of General Revenue cost needed to fund the Foundation School Program.However, any revenue gain to the state in the 2018-19 biennium will be offset by a corresponding loss in the following biennium.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
April 14, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2692 by Wray (relating to taxes and fees imposed on cigarettes and other tobacco products, including an exemption to the cigarette tax, related administrative matters, and the elements of certain related offenses.), Committee Report 1st House, Substituted
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2692 by Wray (relating to taxes and fees imposed on cigarettes and other tobacco products, including an exemption to the cigarette tax, related administrative matters, and the elements of certain related offenses.), 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
HB2692 by Wray (relating to taxes and fees imposed on cigarettes and other tobacco products, including an exemption to the cigarette tax, related administrative matters, and the elements of certain related offenses.), Committee Report 1st House, Substituted
HB2692 by Wray (relating to taxes and fees imposed on cigarettes and other tobacco products, including an exemption to the cigarette tax, related administrative matters, and the elements of certain related offenses.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB2692, Committee Report 1st House, Substituted: a positive impact of $11,974,000 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,149,000 for the 2018-19 biennium. Any gain to the Property Tax Relief Fund will reduce an equal amount of General Revenue cost needed to fund the Foundation School Program.However, any revenue gain to the state in the 2018-19 biennium will be offset by a corresponding loss in the following biennium.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2692, Committee Report 1st House, Substituted: a positive impact of $11,974,000 through the biennium ending August 31, 2019.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,149,000 for the 2018-19 biennium. Any gain to the Property Tax Relief Fund will reduce an equal amount of General Revenue cost needed to fund the Foundation School Program.However, any revenue gain to the state in the 2018-19 biennium will be offset by a corresponding loss in the following biennium.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 $0 2019 $11,974,000 2020 ($11,974,000) 2021 $0 2022 $0
2018 $0
2019 $11,974,000
2020 ($11,974,000)
2021 $0
2022 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain fromGeneral Revenue Fund1 Probable Revenue Gain fromProperty Tax Relief Fund304 2018 $0 $0 2019 $11,974,000 $1,149,000 2020 ($11,974,000) ($1,149,000) 2021 $0 $0 2022 $0 $0
Fiscal Year Probable Revenue Gain fromGeneral Revenue Fund1 Probable Revenue Gain fromProperty Tax Relief Fund304 2018 $0 $0 2019 $11,974,000 $1,149,000 2020 ($11,974,000) ($1,149,000) 2021 $0 $0 2022 $0 $0
2018 $0 $0
2019 $11,974,000 $1,149,000
2020 ($11,974,000) ($1,149,000)
2021 $0 $0
2022 $0 $0
Fiscal Analysis
The bill would amend Subchapter V of Chapter 161 of the Health and Safety Code, regarding the fee on non-settling manufacturers' cigarettes and other tobacco products. Section 161.604, regarding the rate of that fee, would be amended to set the effective date of the annual revised fee rates at February 1. Section 161.605, regarding distributor reports and payment of the fee, would be amended to remove compliance with the provisions of the cigarette tax recovery trust fund as a requirement for a distributor to receive the 3 percent stamping allowance discount. The bill would amend Chapter 154 of the Tax Code, regarding the cigarette tax, to exempt from the tax all cigarettes used exclusively for research purposes and to move the due date for distributor reports from the last day to the 25th day of the month. The bill would amend Chapter 155 of the Tax Code, regarding cigars and tobacco products taxes, to move the due date for distributor reports from the last day to the 25th day of the month. The bill would take effect September 1, 2017.
Methodology
While exempting cigarettes for research could lead to a revenue loss, the amount is not expected to be substantial. The date change for cigar and tobacco products distributor reports also changes the due date for tax payments to the 25th of each month. Under current law, when a month ends on a weekend, the payment is due the next business day. Fiscal 2019 ends on a weekend which will shift revenue received in the last month of that year to the first month of fiscal 2020. The bill's provisions would move that revenue back into 2019.
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