LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION April 16, 2023 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4094 by Oliverson (Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB4094, As Introduced : a negative impact of ($165,000) through the biennium ending August 31, 2025. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2024($77,000)2025($88,000)2026($92,000)2027($97,000)2028($102,000)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 Districts2024($77,000)($14,000)($5,000)($3,000)2025($88,000)($16,000)($5,000)($4,000)2026($92,000)($17,000)($6,000)($4,000)2027($97,000)($18,000)($6,000)($4,000)2028($102,000)($19,000)($6,000)($4,000) Fiscal AnalysisThe bill would amend Chapter 163 of the Tax Code, relating to sales and use taxation of aircraft.The bill would add new Section 163.010 to the Tax Code, stipulating the purchaser of an aircraft is entitled to a refund of a certain portion of the sales tax paid for the aircraft under Chapter 151 of the Tax Code (limited sales, excise, and use tax) under certain conditions.The bill would allow a refund provided the purchaser of the aircraft enters a written lease for at least 24 months under which the purchaser transfers operational control of at least 50 percent of the aircraft's departures to a lessee who will use the aircraft for flight instruction, as defined in statute.Under the provisions of the bill, the refund would be the percentage of the tax paid on the purchase of the aircraft equal to the percentage of the aircraft's departures for which operational control is transferred for flight instruction.The bill would take effect September 1, 2023.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
April 16, 2023
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4094 by Oliverson (Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4094 by Oliverson (Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB4094 by Oliverson (Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.), As Introduced
HB4094 by Oliverson (Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4094, As Introduced : a negative impact of ($165,000) through the biennium ending August 31, 2025.
Estimated Two-year Net Impact to General Revenue Related Funds for HB4094, As Introduced : a negative impact of ($165,000) through the biennium ending August 31, 2025.
General Revenue-Related Funds, Five- Year Impact:
2024 ($77,000)
2025 ($88,000)
2026 ($92,000)
2027 ($97,000)
2028 ($102,000)
All Funds, Five-Year Impact:
2024 ($77,000) ($14,000) ($5,000) ($3,000)
2025 ($88,000) ($16,000) ($5,000) ($4,000)
2026 ($92,000) ($17,000) ($6,000) ($4,000)
2027 ($97,000) ($18,000) ($6,000) ($4,000)
2028 ($102,000) ($19,000) ($6,000) ($4,000)
Fiscal Analysis
The bill would amend Chapter 163 of the Tax Code, relating to sales and use taxation of aircraft.The bill would add new Section 163.010 to the Tax Code, stipulating the purchaser of an aircraft is entitled to a refund of a certain portion of the sales tax paid for the aircraft under Chapter 151 of the Tax Code (limited sales, excise, and use tax) under certain conditions.The bill would allow a refund provided the purchaser of the aircraft enters a written lease for at least 24 months under which the purchaser transfers operational control of at least 50 percent of the aircraft's departures to a lessee who will use the aircraft for flight instruction, as defined in statute.Under the provisions of the bill, the refund would be the percentage of the tax paid on the purchase of the aircraft equal to the percentage of the aircraft's departures for which operational control is transferred for flight instruction.The bill would take effect September 1, 2023.
Methodology
Under current law aircraft that are purchased for the purposes of flight instruction are exempt from sales and use tax under Section 151.328 of the Tax Code. The provisions of the bill allowing an aircraft purchaser to claim a refund of a portion of the sales and use tax paid if the purchaser leases the aircraft for a certain period for the purposes of flight instruction would result in a loss to General Revenue.The amounts in the table above are based on industry sales reports for aircraft typically used for flight instruction and were reduced for the amount anticipated to be leased for flight instruction greater than 50 percent of the time.
Local Government Impact
There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions displayed in the above tables.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD