LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
 
April 11, 2021

TO:
Honorable Jane Nelson, Chair, Senate Committee on Finance
 
FROM:
Jerry McGinty, Director, Legislative Budget Board
 
IN RE:
SB153 by Perry (Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), As Introduced


Estimated Two-year Net Impact to General Revenue Related Funds for SB153, As Introduced : a negative impact of ($19,280,000) through the biennium ending August 31, 2023.

General Revenue-Related Funds, Five- Year Impact:

Fiscal Year Probable Net Positive/(Negative) Impact to
General Revenue Related Funds
2022($8,960,000)
2023($10,320,000)
2024($10,910,000)
2025($11,520,000)
2026($12,170,000)

All Funds, Five-Year Impact:

Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1		 Probable Revenue (Loss) from
Cities
 Probable Revenue (Loss) from
Transit Authorities
 Probable Revenue (Loss) from
Counties & Special Districts
2022($8,960,000)($1,640,000)($550,000)($360,000)
2023($10,320,000)($1,890,000)($640,000)($410,000)
2024($10,910,000)($2,000,000)($670,000)($440,000)
2025($11,520,000)($2,110,000)($710,000)($460,000)
2026($12,170,000)($2,230,000)($750,000)($490,000)


Fiscal Analysis

The bill would amend Section 151.0035 of the Tax Code to exclude certain payment processing services, including the processing of a payment made by credit card or debit card, from the definition of “data processing service,” with the result that charges for such payment processing would be exempt from the sales and use tax.

The bill would not affect tax liability accruing prior to September 1, 2021.

The bill would take effect September 1, 2021.

Methodology

The Comptroller estimate of tax revenue loss is based on data for sales tax remittances from payments processing service providers, extrapolated through 2026 and adjusted for the effective date of the bill.


Local Government Impact

There would be a corresponding loss of sales and use tax revenue from units of local government.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JMc, KK, SD