LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION May 5, 2023 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4865 by Harris, Cody (relating to the taxation of cigars and pipe tobacco sold by certain remote retail sellers; requiring an occupational permit.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB4865, Committee Report 1st House, Substituted : a positive impact of $383,000 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$97,0002025$286,0002026$286,0002027$286,0002028$286,000All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund12024$97,0002025$286,0002026$286,0002027$286,0002028$286,000 Fiscal AnalysisThe bill would amend Chapter 155 of the Tax Code, regarding the cigars and tobacco products tax, to create a remote retail seller permit.The bill requires remote sellers to obtain a remote retail seller's permit to sell cigars or pipe tobacco remotely into Texas. The permit fee would be $180 and the permittee would be required to remit all pertinent sales and excise taxes on cigars and pipe tobacco they sell into Texas.The Comptroller would be required to adopt rules necessary to implement changes made by the bill by January 1, 2024.The bill would take effect September 1, 2023 except that the remote retail seller permit would not be required until April 1, 2024.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
May 5, 2023
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4865 by Harris, Cody (relating to the taxation of cigars and pipe tobacco sold by certain remote retail sellers; requiring an occupational permit.), Committee Report 1st House, Substituted
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4865 by Harris, Cody (relating to the taxation of cigars and pipe tobacco sold by certain remote retail sellers; requiring an occupational permit.), Committee Report 1st House, Substituted
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
HB4865 by Harris, Cody (relating to the taxation of cigars and pipe tobacco sold by certain remote retail sellers; requiring an occupational permit.), Committee Report 1st House, Substituted
HB4865 by Harris, Cody (relating to the taxation of cigars and pipe tobacco sold by certain remote retail sellers; requiring an occupational permit.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB4865, Committee Report 1st House, Substituted : a positive impact of $383,000 through the biennium ending August 31, 2025.
Estimated Two-year Net Impact to General Revenue Related Funds for HB4865, Committee Report 1st House, Substituted : a positive impact of $383,000 through the biennium ending August 31, 2025.
General Revenue-Related Funds, Five- Year Impact:
2024 $97,000
2025 $286,000
2026 $286,000
2027 $286,000
2028 $286,000
All Funds, Five-Year Impact:
2024 $97,000
2025 $286,000
2026 $286,000
2027 $286,000
2028 $286,000
Fiscal Analysis
The bill would amend Chapter 155 of the Tax Code, regarding the cigars and tobacco products tax, to create a remote retail seller permit.The bill requires remote sellers to obtain a remote retail seller's permit to sell cigars or pipe tobacco remotely into Texas. The permit fee would be $180 and the permittee would be required to remit all pertinent sales and excise taxes on cigars and pipe tobacco they sell into Texas.The Comptroller would be required to adopt rules necessary to implement changes made by the bill by January 1, 2024.The bill would take effect September 1, 2023 except that the remote retail seller permit would not be required until April 1, 2024.
Methodology
The Comptroller's analysis is based on information provided by industry sources on cigars sold into Texas and the number of potential permittees.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD, BRI
JMc, KK, SD, BRI