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: HB3571 by Raymond (Relating to customs brokers.), 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 for certain personal property exported out of the country. The bill would require a customs broker to work through or with an export verification center to verify that tangible personal property was exported beyond the territorial limits of the United States for the purpose of providing documentation for the refund of sales taxes. A customs broker could not issue documentation for the purposes of indicating the exemption of tangible personal property unless the broker had received, from an export verification center, a stamped export voucher verifying exportation of property. An "export verification center" would be defined as a facility operated by a person licensed by the Comptroller at an approved location for the purpose of verifying that tangible personal property was exported beyond the territorial limits of the United States. "Export voucher" would be defined as a document provided by customs broker for the purpose of identifying tangible personal property intended for export. On receipt of an export voucher, an export verification center would have to verify that the tangible personal property listed on the export voucher was exported outside the territorial limits of the United States. The export verification center would attach an export stamp to the voucher and return the stamped voucher to the customs broker. The Comptroller would provide export stamps only to a person licensed to operate an export verification center or to an authorized representative of that person. Export verification centers would be required to verify that tangible personal property was exported beyond the territorial limits of the United States. Such centers would have to attach an export stamp to an export voucher before a customs broker could issue documentation showing the states sales tax exemption for the property to be exported. A customs broker would be required to pay for the monthly cost of the export verification center in accordance with the ratio that the number of export vouchers submitted to the location by the broker during the month bears to the total number of export vouchers submitted to that location by all customs brokers during that month. Export verification centers would have to file a report identifying tangible personal property that was exported and the amount of tax associated with such items. The Comptroller would require a person who improperly certified the export of property or who furnished false information to a customs broker to pay the state any tax revenue that was lost by the state due to that person's actions, with interest. The Comptroller could suspend or revoke the license of a person licensed to operate an export verification center. The proposed system of verification could limit the number of non-legitimate refunds. It is assumed that an insignificant portion of these sales for export would be affected. 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 January 1, 2002. 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