LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 13, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB845 by Fraser (Relating to an exemption from the motor
vehicle use tax for motor vehicles brought into this
state by certain military personnel or retired military
personnel.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB845, As Introduced: a negative impact of $(7,345,000) through *
* the biennium ending August 31, 2003, if the effective data of the *
* bill is July 1, 2001; and a negative impact of $(6,771,000) *
* through the biennium ending August 31, 2003, if the effective date *
* of the bill is September 1, 2001. *
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The following table assumes a July 1, 2001 effective date:
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) to *
* General Revenue Fund *
* 0001 *
* 2001 $(574,000) *
* 2002 (3,403,000) *
* 2003 (3,368,000) *
* 2004 (3,336,000) *
* 2005 (3,304,000) *
* 2006 (3,273,000) *
*****************************************************
The following table assumes a September 1, 2001 effective date:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) to *
* General Revenue Fund *
* 0001 *
* 2002 $(3,403,000) *
* 2003 (3,368,000) *
* 2004 (3,336,000) *
* 2005 (3,304,000) *
* 2006 (3,273,000) *
*****************************************************
Fiscal Analysis
The bill would amend Chapter 152 of the Tax Code to exempt certain
members of the U.S. armed forces from provisions of the motor vehicle use
tax.
The exemption would be limited to motor vehicles purchased at retail
outside of the state and used on Texas roads by active members of the
U.S. armed forces residing in Texas on military orders, or by retired
members who applied to register their vehicle in the state before the
first anniversary of their date of retirement.
The bill also would provide an exemption from the tax due, currently $90,
on a motor vehicle previously registered or leased in another state or
foreign country and brought into the state by active members of the U.S.
armed forces residing in the state on military orders, or by retired
members of the armed forces who applied to register a vehicle before the
first anniversary of their date of retirement.
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 September 1, 2001.
Methodology
Active duty military personnel and former military personnel retired less
than one year would be exempt from paying the $90 new resident fee that
is currently charged to new residents in lieu of the use tax. Based on
estimates of the number of active duty and recently retired military
personnel entering Texas with a vehicle, it was determined that
approximately 24,000 vehicles would qualify annually for this exemption.
Similarly, active duty military personnel and former military personnel
retired less than one year would be exempt from paying motor vehicle use
tax on a motor vehicle purchased out-of-state. It was estimated that
approximately 1,000 motor vehicles would be purchased in this manner in
fiscal 2002, at an average use tax implication of $1,200 per vehicle.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, WP, SM