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:HB976 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB976, As Introduced: a negative impact of ($690,000) through the biennium ending August 31, 2019.
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:HB976 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB976 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), 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
HB976 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
HB976 by Giddings (Relating to the exemption from the sales tax for certain school art supplies during limited periods.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB976, As Introduced: a negative impact of ($690,000) through the biennium ending August 31, 2019.
Estimated Two-year Net Impact to General Revenue Related Funds for HB976, As Introduced: a negative impact of ($690,000) 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 ($690,000) 2020 ($720,000) 2021 ($760,000) 2022 ($800,000)
2018 $0
2019 ($690,000)
2020 ($720,000)
2021 ($760,000)
2022 ($800,000)
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 $0 2019 ($690,000) 2020 ($720,000) 2021 ($760,000) 2022 ($800,000)
2018 $0
2019 ($690,000)
2020 ($720,000)
2021 ($760,000)
2022 ($800,000)
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 ($660,000) ($130,000) ($40,000) 2019 ($690,000) $0 ($130,000) ($50,000) 2020 ($720,000) $0 ($140,000) ($50,000) 2021 ($760,000) $0 ($150,000) ($50,000) 2022 ($800,000) $0 ($150,000) ($50,000) Fiscal Year Probable Revenue (Loss) fromCounties & Special Districts 2018 ($20,000) 2019 ($20,000) 2020 ($30,000) 2021 ($30,000) 2022 ($30,000) The above tables assume the bill takes immediate effect. The tables below assume an effective date of September 1, 2017. Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts 2018 $0 $0 $0 $0 2019 ($690,000) ($130,000) ($50,000) ($20,000) 2020 ($720,000) ($140,000) ($50,000) ($30,000) 2021 ($760,000) ($150,000) ($50,000) ($30,000) 2022 ($800,000) ($150,000) ($50,000) ($30,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017. Methodology U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. If the bill were to take effect immediately, the additional items would be eligible for exemption during the August 2017 tax holiday. In the event the bill fails to take immediate effect, the first exemption period would be in August 2018.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 in the first Scenario is from the State Highway Fund instead of General Revenue. Local Government Impact There would be a proportional loss of sales and use tax revenue from units of local government. The estimated losses are displayed in the above tables. Source Agencies:304 Comptroller of Public Accounts LBB Staff: UP, KK, SD
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 ($660,000) ($130,000) ($40,000) 2019 ($690,000) $0 ($130,000) ($50,000) 2020 ($720,000) $0 ($140,000) ($50,000) 2021 ($760,000) $0 ($150,000) ($50,000) 2022 ($800,000) $0 ($150,000) ($50,000)
2018 $0 ($660,000) ($130,000) ($40,000)
2019 ($690,000) $0 ($130,000) ($50,000)
2020 ($720,000) $0 ($140,000) ($50,000)
2021 ($760,000) $0 ($150,000) ($50,000)
2022 ($800,000) $0 ($150,000) ($50,000)
Fiscal Year Probable Revenue (Loss) fromCounties & Special Districts 2018 ($20,000) 2019 ($20,000) 2020 ($30,000) 2021 ($30,000) 2022 ($30,000)
2018 ($20,000)
2019 ($20,000)
2020 ($30,000)
2021 ($30,000)
2022 ($30,000)
The above tables assume the bill takes immediate effect. The tables below assume an effective date of September 1, 2017.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts 2018 $0 $0 $0 $0 2019 ($690,000) ($130,000) ($50,000) ($20,000) 2020 ($720,000) ($140,000) ($50,000) ($30,000) 2021 ($760,000) ($150,000) ($50,000) ($30,000) 2022 ($800,000) ($150,000) ($50,000) ($30,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017. Methodology U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. If the bill were to take effect immediately, the additional items would be eligible for exemption during the August 2017 tax holiday. In the event the bill fails to take immediate effect, the first exemption period would be in August 2018.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 in the first Scenario is from the State Highway Fund instead of General Revenue.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts 2018 $0 $0 $0 $0 2019 ($690,000) ($130,000) ($50,000) ($20,000) 2020 ($720,000) ($140,000) ($50,000) ($30,000) 2021 ($760,000) ($150,000) ($50,000) ($30,000) 2022 ($800,000) ($150,000) ($50,000) ($30,000)
2018 $0 $0 $0 $0
2019 ($690,000) ($130,000) ($50,000) ($20,000)
2020 ($720,000) ($140,000) ($50,000) ($30,000)
2021 ($760,000) ($150,000) ($50,000) ($30,000)
2022 ($800,000) ($150,000) ($50,000) ($30,000)
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes, to add certain school art supplies to the definition of school supplies eligible for exemption during a limited period. The bill would amend Section 151.327(a)(2) to add a paintbrush used for artwork; watercolor; and acrylic, tempera, and oil paints to the items eligible for exemption. The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017.
Methodology
U.S. Census Bureau data on annual sales of art supplies and Comptroller data on annual sales of retailers that sell art supplies were used to develop an estimate of school art supply purchases that would occur within the annual August tax holiday, to which the state sales tax rate was applied to estimate the revenue impact. If the bill were to take effect immediately, the additional items would be eligible for exemption during the August 2017 tax holiday. In the event the bill fails to take immediate effect, the first exemption period would be in August 2018.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 in the first Scenario is from the State Highway Fund instead of General Revenue.
Local Government Impact
There would be a proportional loss of sales and use tax revenue from units of local government. The estimated 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