LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 27, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3273 by Oliveira (Relating to exempting certain
writing instruments from the sales and use tax for a
limited time.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3273, As Introduced: a negative impact of $(2,971,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(1,763,000) *
* 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 $(416,000) $0 $0 $0 *
* 2002 (1,237,000) (233,000) (86,000) (26,000) *
* 2003 (1,318,000) (238,000) (92,000) (28,000) *
* 2004 (1,412,000) (255,000) (98,000) (30,000) *
* 2005 (1,510,000) (273,000) (105,000) (32,000) *
* 2006 (1,632,000) (295,000) (114,000) (35,000) *
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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 Savings/(Cost) *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to to Counties/SPDs *
* General Revenue Cities Transit *
* Fund Authorities *
* 0001 *
* 2002 $(445,000) $0 $0 $0 *
* 2003 (1,318,000) (238,000) (92,000) (28,000) *
* 2004 (1,412,000) (255,000) (98,000) (30,000) *
* 2005 (1,510,000) (273,000) (105,000) (32,000) *
* 2006 (1,632,000) (295,000) (114,000) (35,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt certain
writing instruments from the state sales and use tax during the current
sales tax holiday period if the sales price of the item were less than
$5. Items including crayons, pencils, pencil sharpeners, erasers, zipper
pencil bags, pens, markers, and writing instrument supply boxes would
qualify for the exemption.
The bill would take effect July 1, 2001 if 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 school supplies were obtained from public and private
sources, including the U.S. Census Bureau. The data were adjusted for
the specified items, adjusted for the appropriate price range and time
period, multiplied by the state sales tax rate, adjusted for the
potential effective dates of July 1, 2001 and October 1, 2001, and
extrapolated through fiscal 2006. The fiscal impacts 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