LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 18, 2001 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HB2990 by Gutierrez (Relating to refunds of sales and use tax paid on tangible personal property that is exported beyond the territorial limits of the United States.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** The bill would amend Chapter 151 of the Tax Code, relating to the refund of sales and use tax paid on certain property exported out of the country. The bill would alter the types of documentation deemed acceptable for proof of export for purposes of an exemption from sales tax for items exported from the U.S. The documentation provided by a U.S. Customs Broker would have to: 1) certify that delivery was made outside the territorial limits of the United States, 2) have the proper stamp affixed to it, and 3) be accompanied by import documents from the country of destination. A purchaser with documentation provided by a customs broker and import documents from the country of destination could recover sales and use taxes paid to a retailer on the purchase of tangible personal property that was exported beyond the territorial limits of the United States. To recover any taxes paid, the purchaser would have to submit to the retailer the purchaser's receipt, documentation provided by the customs broker, and the import documents. As a result, the bill would increase the documentation necessary, in cases where such documentation is provided by a U.S. Customs Broker, for a purchaser to recover sales and uses taxes for tangible personal property exported beyond the territorial limits of the United States. The proposed system of verification could therefore limit the number of non-legitimate refunds. Note: It is estimated that approximately $60 million in state and local sales and use taxes is refunded annually to consumers for tangible personal property legitimately exported from Texas to Mexico. The bill would take effect September 1, 2001. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, SD, WP, SM