LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 2, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1678 by Jackson (Relating to exempting certain
electronic information services from the sales and use
tax.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1678, As Engrossed: 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 (11,000) (4,000) (2,000) (1,000) *
* 2005 0 0 0 0 *
* 2006 0 0 0 0 *
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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 (11,000) (4,000) (2,000) (1,000) *
* 2005 0 0 0 0 *
* 2006 0 0 0 0 *
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Fiscal Analysis
The bill would add Section 151.3511 to the Tax Code to exempt the sale of
an information service from the state sales and use tax if the service
delivered its information by fax or electronic mail over the Internet,
did not contain any advertisements, was issued not more than once each
business day, cost less than $500 for a yearly subscription, and did not
have more than 750 subscribers.
The newly-created Section 151.3511 would expire August 31, 2003. 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 the projection period. 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.
Note: The fiscal implications in 2004 reflect state sales taxes
collected during August 2003; local impacts reflect taxes collected in
July and August, 2003.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
sales tax revenues, as indicated in the tables above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, SM