LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 30, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2627 by Bonnen (Relating to an exemption from the
sales and use tax for membership in or admission to a
health spa.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2627, As Introduced: a negative impact of $(38,975,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(34,451,000) *
* 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 $(1,466,000) $0 $0 $0 *
* 2002 (18,345,000) (3,312,000) (1,278,000) (392,000) *
* 2003 (19,164,000) (3,460,000) (1,335,000) (409,000) *
* 2004 (20,035,000) (3,617,000) (1,396,000) (428,000) *
* 2005 (20,943,000) (3,782,000) (1,459,000) (447,000) *
* 2006 (21,873,000) (3,949,000) (1,524,000) (467,000) *
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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 $(15,287,000) $(2,484,000) $(959,000) $(294,000) *
* 2003 (19,164,000) (3,460,000) (1,335,000) (409,000) *
* 2004 (20,035,000) (3,617,000) (1,396,000) (428,000) *
* 2005 (20,943,000) (3,782,000) (1,459,000) (447,000) *
* 2006 (21,873,000) (3,949,000) (1,524,000) (467,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exclude membership in
or admission to a health spa, as defined by Section 702.003 of the
Occupations Code, from the definition of amusement services.
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
The sale of memberships in, or admission to, fitness clubs and health
spas would be exempted from the state sales and use tax. Data on health
club/spa memberships were gathered from Comptroller data files. Sales
were multiplied by the state sales tax rate, adjusted for the potential
effective dates of July 1, 2001 and October 1, 2001, and extrapolated
through 2006. The fiscal impact 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, SM