LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 19, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2501 by Marchant (Relating to the exception from the
hotel occupancy tax for a permanent resident.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2501, As Introduced: positive impact of $6,091,249 through the *
* biennium ending August 31, 2003, if the effective date of the bill *
* is July 1, 2001; and a positive impact of $5,465,166 through the *
* biennium ending August 31, 2003, if the effective date of the bill *
* is September 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) Gain/(Loss) Gain/(Loss) Gain/(Loss) *
* from General from Hotel from Cities from Counties *
* Revenue Fund Occupancy Tax *
* 0001 Deposits *
* Account *
* 5003 *
* 2001 $418,916 $38,084 $539,000 $37,000 *
* 2002 2,722,500 247,500 3,505,000 238,000 *
* 2003 2,949,833 268,167 3,797,000 257,000 *
* 2004 3,195,500 290,500 4,113,000 279,000 *
* 2005 3,461,333 314,667 4,456,000 302,000 *
* 2006 3,750,083 340,917 4,827,000 327,000 *
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The following table assumes an effective date of September 1, 2001:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) Gain/(Loss) Gain/(Loss) Gain/(Loss) *
* from General from Hotel from Cities from Counties *
* Revenue Fund Occupancy Tax *
* 0001 Deposits *
* Account *
* 5003 *
* 2002 $2,515,333 $228,667 $3,238,000 $220,000 *
* 2003 2,949,833 268,167 3,797,000 257,000 *
* 2004 3,195,500 290,500 4,113,000 279,000 *
* 2005 3,461,333 314,667 4,456,000 302,000 *
* 2006 3,750,083 340,917 4,827,000 327,000 *
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Fiscal Analysis
The bill would amend Chapter 156 of the Tax Code to clarify that an
individual, not a person, with the right to use or possess a hotel room
for at least 30 consecutive days with no interruption of payment, would
not be required to pay the hotel occupancy tax. A person other than an
individual could not claim exemption from the tax.
The bill would take effect on the first day of the calendar month
following enactment, assuming that it received the requisite two-thirds
majority votes in both houses of the Legislature. Otherwise, it would
take effect September 1, 2001.
Methodology
Under current law, a person with the right to use or possess a hotel room
for at least 30 consecutive days with no interruption of payment is not
required to pay the hotel occupancy tax. The term "person" may include
individuals as well as businesses. Therefore, a business renting blocks
of hotel rooms for use by its employees for more than 30 consecutive days
is not required to pay the hotel occupancy tax under current law.
Examples of such businesses include, but are not limited to, airlines,
trucking companies, and railroads.
Data were collected from Comptroller tax files on gross and taxable hotel
receipts to estimate the value of exemptions from the hotel tax. Data
were collected from public and private sources to estimate the number of
units rented by businesses for more than 30 consecutive days. The
current state hotel occupancy tax rate was applied to the average unit
cost to estimate the potential gain to the General Revenue Fund 0001 and
the Department of Economic Development Account 5003. Local fiscal
implications were estimated proportionally.
This analysis assumes a "person other than an individual" refers to an
entity other than a natural person.
Local Government Impact
Local units of government would have a corresponding fiscal impact, as
indicated in the tables above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD