LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 10, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3580 by Gray (Relating to exempting certain electronic
information services from the sales and use tax.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3580, As Introduced: a negative impact of $(268,000) through the *
* biennium ending August 31, 2003, if the effective date of the bill *
* is July 1, 2001; and a negative impact of $(237,000) 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 $(10,000) $0 $0 $0 *
* 2002 (127,000) (23,000) (9,000) (3,000) *
* 2003 (131,000) (24,000) (9,000) (3,000) *
* 2004 (136,000) (24,000) (9,000) (3,000) *
* 2005 (140,000) (25,000) (10,000) (3,000) *
* 2006 (146,000) (26,000) (10,000) (3,000) *
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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 $(106,000) $(17,000) $(7,000) $(2,000) *
* 2003 (131,000) (24,000) (9,000) (3,000) *
* 2004 (136,000) (24,000) (9,000) (3,000) *
* 2005 (140,000) (25,000) (10,000) (3,000) *
* 2006 (146,000) (26,000) (10,000) (3,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt the sale of an
information service from the state sales and use tax if the service
delivers its information by fax or electronic mail over the Internet,
does not contain any advertisements, is issued not more than once each
business day, costs less than $500 for a yearly subscription, and does
not have more than 750 subscribers.
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
Data on the sale of information services were gathered from public and
private sources, including Comptroller tax files. Sales were adjusted
for the specified information services, multiplied by the state sales tax
rate, adjusted for potential effective dates of June 1, 2001 and October
1, 2001, and extrapolated through 2006. The fiscal impact on units of
local government were estimated proportionally.
Note: Currently, 20 percent of the value of information services is
exempted from the state sales and use tax under Section 151.351 of the
Tax Code.
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