LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 23, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1632 by Gonzlez, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1632, As Introduced: a negative impact of ($668,370,000) through the biennium ending August 31, 2027. Additionally, the bill will have a direct impact of a revenue loss to the Tax Reduction and Excellence in Education Fund (TREE) of ($24,250,000) for the 2026-27 biennium. Any loss to the TREE 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 Funds2026($312,800,000)2027($355,570,000)2028($369,800,000)2029($380,150,000)2030($406,760,000)All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromTax Reduc. & Excell. Edu. Fund305 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities2026($312,800,000)($11,350,000)($59,310,000)($19,660,000)2027($355,570,000)($12,900,000)($67,420,000)($22,350,000)2028($369,800,000)($13,410,000)($70,120,000)($23,240,000)2029($380,150,000)($13,790,000)($72,080,000)($23,890,000)2030($406,760,000)($14,760,000)($77,130,000)($25,560,000)Fiscal Year Probable Revenue (Loss) fromCounties & Special Districts2026($14,620,000)2027($16,620,000)2028($17,280,000)2029($17,770,000)2030($19,010,000) Fiscal AnalysisThe bill would exempt food intended for consumption by domesticated animals from sales and use tax. The bill would take effect September 1, 2025.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 23, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1632 by Gonzlez, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB1632 by Gonzlez, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), 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
HB1632 by Gonzlez, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), As Introduced
HB1632 by Gonzlez, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1632, As Introduced: a negative impact of ($668,370,000) through the biennium ending August 31, 2027. Additionally, the bill will have a direct impact of a revenue loss to the Tax Reduction and Excellence in Education Fund (TREE) of ($24,250,000) for the 2026-27 biennium. Any loss to the TREE 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 HB1632, As Introduced: a negative impact of ($668,370,000) through the biennium ending August 31, 2027. Additionally, the bill will have a direct impact of a revenue loss to the Tax Reduction and Excellence in Education Fund (TREE) of ($24,250,000) for the 2026-27 biennium. Any loss to the TREE 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 Tax Reduction and Excellence in Education Fund (TREE) of ($24,250,000) for the 2026-27 biennium. Any loss to the TREE must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five- Year Impact:
2026 ($312,800,000)
2027 ($355,570,000)
2028 ($369,800,000)
2029 ($380,150,000)
2030 ($406,760,000)
All Funds, Five-Year Impact:
2026 ($312,800,000) ($11,350,000) ($59,310,000) ($19,660,000)
2027 ($355,570,000) ($12,900,000) ($67,420,000) ($22,350,000)
2028 ($369,800,000) ($13,410,000) ($70,120,000) ($23,240,000)
2029 ($380,150,000) ($13,790,000) ($72,080,000) ($23,890,000)
2030 ($406,760,000) ($14,760,000) ($77,130,000) ($25,560,000)
2026 ($14,620,000)
2027 ($16,620,000)
2028 ($17,280,000)
2029 ($17,770,000)
2030 ($19,010,000)
Fiscal Analysis
The bill would exempt food intended for consumption by domesticated animals from sales and use tax. The bill would take effect September 1, 2025.
Methodology
For the purposes of this analysis, animal food intended for domesticated animals is treated as food for household pets, not that intended for animals commonly found only on a farm and/or ranch. Data from industry reports regarding amounts spent annually on pet food were apportioned to Texas on a per capita basis. The result was then adjusted for the effective date of the bill and extrapolated forward.
Local Government Impact
The bill would result in 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