LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 26, 1995 TO: Honorable John T. Montford, Chair IN RE: Senate Bill No. 833 Committee on Finance By: Madla Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 833 (Relating to application of the sales and use tax to certain aircraft.) this office has determined the following: This bill would amend the sales tax chapter of the Tax Code to exempt from the sales tax the following: a) aircraft sold to a person with a sales tax permit who would use the aircraft for pilot training or instruction designed to lead to a pilot certificate or rating issued by the Federal Aviation Administration; b) the repair, remodeling, and maintenance services to aircraft operated by a certified or licensed carrier of persons or property or by a person training pilots in flight instruction; c) machinery, tools, supplies, and equipment used or consumed by a certified or licensed carrier of persons or property or by a person training pilots in flight instruction; and d) tangible personal property that is permanently affixed or attached as a component part, or that is necessary for the normal operations of an aircraft, and is pumped, poured, or otherwise placed in an aircraft owned or operated by a certified or licensed carrier of persons or property or by a person training pilots in flight instruction. The bill would also change the definition of aircraft to include lighter-than-air and unpowered craft and to include all flight simulators and flight procedures simulators. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Revenue Probable Revenue Probable Revenue Year Loss to General Loss to Cities Loss to MTAs Revenue Fund 001 1996 $1,277,000 $206,000 $88,000 1997 1,597,000 258,000 110,000 1998 1,705,000 275,000 117,000 1999 1,821,000 294,000 125,000 2000 1,948,000 315,000 134,000 Fiscal Probable Revenue Year Loss to Counties/SPDs 1996 $24,000 1997 30,000 1998 32,000 1999 34,000 2000 36,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Source: Comptroller of Public Accounts LBB Staff: JK, SM, DF