LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION April 2, 2023 TO: Honorable Joan Huffman, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1614 by Perry (Relating to the computation of the cost of goods sold by television and radio broadcasters for purposes of the franchise tax.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1614, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,112,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2024$02025$02026$02027$02028$0All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromProperty Tax Relief Fund3042024($1,539,000)2025($1,573,000)2026($1,610,000)2027($1,649,000)2028($1,696,000) Fiscal AnalysisThe bill would amend Section 171.1012(o) of the Tax Code to change the list of taxable entities eligible to compute cost of goods sold, as provided by this section, to include those whose principal business activity is television and radio broadcasting. Cost of goods sold under this paragraph includes depreciation, amortization, and other expenses directly related to the acquisition, production, or use of the property, including expenses for the right to broadcast or use the property.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, 2023.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
April 2, 2023
TO: Honorable Joan Huffman, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1614 by Perry (Relating to the computation of the cost of goods sold by television and radio broadcasters for purposes of the franchise tax.), As Introduced
TO: Honorable Joan Huffman, Chair, Senate Committee on Finance
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB1614 by Perry (Relating to the computation of the cost of goods sold by television and radio broadcasters for purposes of the franchise tax.), As Introduced
Honorable Joan Huffman, Chair, Senate Committee on Finance
Honorable Joan Huffman, Chair, Senate Committee on Finance
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB1614 by Perry (Relating to the computation of the cost of goods sold by television and radio broadcasters for purposes of the franchise tax.), As Introduced
SB1614 by Perry (Relating to the computation of the cost of goods sold by television and radio broadcasters for purposes of the franchise tax.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1614, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,112,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1614, As Introduced : an impact of $0 through the biennium ending August 31, 2025. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,112,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,112,000) for the 2024-25 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five- Year Impact:
2024 $0
2025 $0
2026 $0
2027 $0
2028 $0
All Funds, Five-Year Impact:
2024 ($1,539,000)
2025 ($1,573,000)
2026 ($1,610,000)
2027 ($1,649,000)
2028 ($1,696,000)
Fiscal Analysis
The bill would amend Section 171.1012(o) of the Tax Code to change the list of taxable entities eligible to compute cost of goods sold, as provided by this section, to include those whose principal business activity is television and radio broadcasting. Cost of goods sold under this paragraph includes depreciation, amortization, and other expenses directly related to the acquisition, production, or use of the property, including expenses for the right to broadcast or use the property.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, 2023.
Methodology
Currently, there are taxable entities doing business as radio broadcasters that are not calculating their tax liability using cost of goods sold. This analysis assumes if able to use Section 171.1012(o), such entities would change to the cost of goods sold method.
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
JMc, KK, SD