LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION April 11, 2021 TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB153, As Introduced : a negative impact of ($19,280,000) through the biennium ending August 31, 2023. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2022($8,960,000)2023($10,320,000)2024($10,910,000)2025($11,520,000)2026($12,170,000)All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts2022($8,960,000)($1,640,000)($550,000)($360,000)2023($10,320,000)($1,890,000)($640,000)($410,000)2024($10,910,000)($2,000,000)($670,000)($440,000)2025($11,520,000)($2,110,000)($710,000)($460,000)2026($12,170,000)($2,230,000)($750,000)($490,000) Fiscal AnalysisThe bill would amend Section 151.0035 of the Tax Code to exclude certain payment processing services, including the processing of a payment made by credit card or debit card, from the definition of data processing service, with the result that charges for such payment processing would be exempt from the sales and use tax.The bill would not affect tax liability accruing prior to September 1, 2021.The bill would take effect September 1, 2021.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
April 11, 2021
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced
Honorable Jane Nelson, Chair, Senate Committee on Finance
Honorable Jane Nelson, Chair, Senate Committee on Finance
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced
SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB153, As Introduced : a negative impact of ($19,280,000) through the biennium ending August 31, 2023.
Estimated Two-year Net Impact to General Revenue Related Funds for SB153, As Introduced : a negative impact of ($19,280,000) through the biennium ending August 31, 2023.
General Revenue-Related Funds, Five- Year Impact:
2022 ($8,960,000)
2023 ($10,320,000)
2024 ($10,910,000)
2025 ($11,520,000)
2026 ($12,170,000)
All Funds, Five-Year Impact:
2022 ($8,960,000) ($1,640,000) ($550,000) ($360,000)
2023 ($10,320,000) ($1,890,000) ($640,000) ($410,000)
2024 ($10,910,000) ($2,000,000) ($670,000) ($440,000)
2025 ($11,520,000) ($2,110,000) ($710,000) ($460,000)
2026 ($12,170,000) ($2,230,000) ($750,000) ($490,000)
Fiscal Analysis
The bill would amend Section 151.0035 of the Tax Code to exclude certain payment processing services, including the processing of a payment made by credit card or debit card, from the definition of data processing service, with the result that charges for such payment processing would be exempt from the sales and use tax.The bill would not affect tax liability accruing prior to September 1, 2021.The bill would take effect September 1, 2021.
Methodology
The Comptroller estimate of tax revenue loss is based on data for sales tax remittances from payments processing service providers, extrapolated through 2026 and adjusted for the effective date of the bill.
Local Government Impact
There would be a corresponding loss of sales and use tax revenue from units of local government.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD