LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session Revision 1 April 14, 1999 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HB3600 by McClendon (relating to the taxation of small quantities of cigarettes imported into this state from a foreign country), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3600, As Introduced: positive impact of $4,000,000 through the * * biennium ending August 31, 2001. * ************************************************************************** General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $1,930,000 * * 2001 2,070,000 * * 2002 2,060,000 * * 2003 2,090,000 * * 2004 2,110,000 * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * General Revenue Fund * * 0001 * * 2000 $1,930,000 * * 2001 2,070,000 * * 2002 2,060,000 * * 2003 2,090,000 * * 2004 2,110,000 * ***************************************************** Fiscal Analysis The bill would amend the tax law regarding the importation of cigarettes into Texas by individuals for personal consumption. Under current law, the importation of 200 or fewer cigarettes (a 10-package carton) is not subject to the state's cigarette excise tax. This bill would continue that provision for cigarettes imported from other states, but not for cigarettes imported from a foreign country. The bill would take effect September 1, 1999 and only would apply to cigarettes imported into the state on or after that date. Methodology This estimate is based upon Comptroller analysis of information provided by the Texas Alcoholic Beverage Commission (TABC). At major Texas-Mexico border crossings, the TABC maintains offices where it collects taxes and fees due from personally-imported alcoholic beverages and cigarettes. In March, 1999, TABC surveyed adults entering Texas at four border crossings, asking adults if they were smokers and if they were importing cigarettes. The results of the survey were used to adjust previous estimates of tax revenue anticipated to be generated by this legislation. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, BB, BR, CT