LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 11, 1999
TO: Honorable Bill Ratliff, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2371 by Gutierrez (relating to exempting diapers from
the sales tax), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Fundsfor *
* HB2371, As Engrossed: a negative impact of $(63,527,000) through *
* the biennium ending August 31, 2001, if the effective date is July *
* 1, 1999; and a negative impact of $(56,009,000) through the *
* biennium ending August 31, 2001, if the effective date is October *
* 1, 1999. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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The following table assumes an effective date of July 1, 1999.
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* General Revenue Cities Transit Counties/SPDs *
* Fund Authorities *
* 0001 *
* 1999 $(2,477,000) $0 $0 $0 *
* 2000 (30,243,000) (5,275,000) (2,071,000) (639,000) *
* 2001 (30,807,000) (5,373,000) (2,110,000) (651,000) *
* 2002 (31,399,000) (5,477,000) (2,150,000) (663,000) *
* 2003 (31,974,000) (5,577,000) (2,190,000) (675,000) *
* 2004 (32,540,000) (5,676,000) (2,229,000) (687,000) *
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The following table assumes an effective date of October 1, 1999.
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* General Revenue Cities Transit Counties/SPDs *
* Fund Authorities *
* 0001 *
* 2000 $(25,202,000) $(3,956,000) $(1,553,000) $(479,000) *
* 2001 (30,807,000) (5,373,000) (2,110,000) (651,000) *
* 2002 (31,399,000) (5,477,000) (2,150,000) (663,000) *
* 2003 (31,974,000) (5,577,000) (2,190,000) (675,000) *
* 2004 (32,540,000) (5,676,000) (2,229,000) (687,000) *
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Fiscal Analysis
The bill would amend the Tax Code to exempt certain diapers from the
sales tax. Diapers purchased, sold, or used by a diaper service would
not be exempt from the sales tax.
The governing body of a local taxing authority that imposes a local sales
and use tax could repeal the proposed exemption if the governing body
found that the exemption would materially impair the obligation of any
contract at the time the bill went into effect and to which the local
taxing authority was a party.
Methodology
To estimate the fiscal implications of the bill, diaper sales data were
gathered from a variety of sources. The data were adjusted to reflect
Texas sales only, multiplied by the state sales tax rate, and
extrapolated through fiscal 2004.
The fiscal impact is based on the assumption that no local taxing
authorities would repeal the exemption. To the extent that one or more
would repeal the exemption, the negative fiscal impact would be reduced.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
sales tax revenues, as indicated in the table above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, BB, SM