LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 2, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB324 by Ellis, Dan (Relating to exempting textbooks for
university and college courses from the sales tax.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB324, As Introduced: a negative impact of $(67,755,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(59,953,000) *
* through the biennium ending August 31, 2003, if the effective date *
* of the bill is October 1, 2001. *
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The following table assumes an effective date of July 1, 2001:
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 *
* 2001 $(2,509,000) $0 $0 $0 *
* 2002 (31,757,000) (5,734,000) (2,212,000) (678,000) *
* 2003 (33,489,000) (6,047,000) (2,333,000) (715,000) *
* 2004 (35,317,000) (6,377,000) (2,461,000) (754,000) *
* 2005 (37,244,000) (6,725,000) (2,595,000) (796,000) *
* 2006 (39,276,000) (7,092,000) (2,736,000) (839,000) *
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The following table assumes an effective date of October 1, 2001:
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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 *
* 2002 $(26,464,000) $(4,300,000) $(1,659,000) $(509,000) *
* 2003 (33,489,000) (6,047,000) (2,333,000) (715,000) *
* 2004 (35,317,000) (6,377,000) (2,461,000) (754,000) *
* 2005 (37,244,000) (6,725,000) (2,595,000) (796,000) *
* 2006 (39,276,000) (7,092,000) (2,736,000) (839,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt college
textbooks from taxation. To be eligible for exemption, books would have
to be written for educational use, be purchased by a full-time or
part-time student enrolled in an institution of higher education, and be
required for a course at the college or university. A person could
establish full-time or part-time enrollment status by presenting a valid
student identification card.
The bill would take effect July 1, 2001, assuming that it received the
requisite two-thirds majority votes in both houses of the Legislature.
Otherwise, it would take effect October 1, 2001.
Methodology
Data on the sale of college textbooks were gathered from several sources
(both public and private), including Comptroller tax files. Estimated
textbook sales were multiplied by the sales tax rate, adjusted for
potential effective dates of July 1, 2001 and October 1, 2001, and
extrapolated through fiscal 2006. Fiscal implications on units of local
government were estimated proportionally.
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, SD, WP, SM