LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION April 30, 2023 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4257 by Raney (Relating to the reimbursement allowed for the collection of sales and use taxes.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB4257, As Introduced : a negative impact of ($780,853,000) 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($363,853,000)2025($417,000,000)2026($439,424,000)2027($462,892,000)2028($485,835,000)All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromTax Reduc. & Excell. Edu. Fund305 Probable Revenue (Loss) fromState Highway Fund6 Probable Revenue (Loss) fromSporting Goods Sales Tax Allocation2024($363,853,000)($12,713,000)($306,000)($1,901,000)2025($417,000,000)($14,913,000)($343,000)($2,095,000)2026($439,424,000)($16,053,000)($347,000)($2,116,000)2027($462,892,000)($17,284,000)($351,000)($2,137,000)2028($485,835,000)($18,529,000)($356,000)($2,159,000)Fiscal Year Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts2024($69,511,000)($23,079,000)($15,767,000)2025($79,711,000)($26,465,000)($18,080,000)2026($84,040,000)($27,902,000)($19,062,000)2027($88,577,000)($29,409,000)($20,091,000)2028($93,021,000)($30,884,000)($21,099,000) Fiscal AnalysisThe bill would amend Section 151.423 of the Tax Code, relating to reimbursement to taxpayers for tax collections, by increasing the amount a taxpayer could deduct and withhold for filing a timely return from 0.5 percent to 1.5 percent.The bill would take effect October 1, 2023.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
April 30, 2023
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4257 by Raney (Relating to the reimbursement allowed for the collection of sales and use taxes.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4257 by Raney (Relating to the reimbursement allowed for the collection of sales and use taxes.), 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
HB4257 by Raney (Relating to the reimbursement allowed for the collection of sales and use taxes.), As Introduced
HB4257 by Raney (Relating to the reimbursement allowed for the collection of sales and use taxes.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4257, As Introduced : a negative impact of ($780,853,000) through the biennium ending August 31, 2025.
Estimated Two-year Net Impact to General Revenue Related Funds for HB4257, As Introduced : a negative impact of ($780,853,000) through the biennium ending August 31, 2025.
General Revenue-Related Funds, Five- Year Impact:
2024 ($363,853,000)
2025 ($417,000,000)
2026 ($439,424,000)
2027 ($462,892,000)
2028 ($485,835,000)
All Funds, Five-Year Impact:
2024 ($363,853,000) ($12,713,000) ($306,000) ($1,901,000)
2025 ($417,000,000) ($14,913,000) ($343,000) ($2,095,000)
2026 ($439,424,000) ($16,053,000) ($347,000) ($2,116,000)
2027 ($462,892,000) ($17,284,000) ($351,000) ($2,137,000)
2028 ($485,835,000) ($18,529,000) ($356,000) ($2,159,000)
2024 ($69,511,000) ($23,079,000) ($15,767,000)
2025 ($79,711,000) ($26,465,000) ($18,080,000)
2026 ($84,040,000) ($27,902,000) ($19,062,000)
2027 ($88,577,000) ($29,409,000) ($20,091,000)
2028 ($93,021,000) ($30,884,000) ($21,099,000)
Fiscal Analysis
The bill would amend Section 151.423 of the Tax Code, relating to reimbursement to taxpayers for tax collections, by increasing the amount a taxpayer could deduct and withhold for filing a timely return from 0.5 percent to 1.5 percent.The bill would take effect October 1, 2023.
Methodology
The estimate is based on the amount of sales and use tax currently received from timely filers, times the timely filing discount to be provided by the bill.There would be effects on the Economic Stabilization Fund (ESF) balance limit and consequent effects for GR reserves and transfers to ESF. Because sales tax revenue is initially deposited to the general revenue fund, the reduction in tax revenue in the 2024-25 biennium would reduce the 2026-27 ESF balance limit by ten percent of the reduction in tax, reducing 2025 severance tax reserves for transfer to the ESF by the amount of the balance limit reduction, and increasing available GR in 2025 by the amount of reduction of the reserves, however this amount is not expected to be significant.
Local Government Impact
The increase in the timely filing discount would also be applicable for local sales taxes. There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions displayed in the tables above.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD