LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 78TH LEGISLATIVE REGULAR SESSION
 
March 12, 2003

TO:
Honorable Ron Wilson, Chair, House Committee on Ways & Means
 
FROM:
John Keel, Director, Legislative Budget Board
 
IN RE:
HB1002 by Thompson (Relating to the repeal of state and local taxes.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB1002, As Introduced: an impact of $0 through the biennium ending August 31, 2005.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2004 $0
2005 $0
2006 ($24,506,493,000)
2007 ($25,346,312,000)
2008 ($26,120,999,000)




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1 		Probable Revenue Gain/(Loss) from
All General Revenue Dedicated Accounts		 Probable Revenue Gain/(Loss) from
All Other Funds		 Probable Revenue Gain/(Loss) from
All Local Units of Government
2004 $0 $0 $0 $0
2005 $0 $0 $0 $0
2006 ($24,506,493,000) ($16,157,000) ($2,085,586,000) ($39,807,115,000)
2007 ($25,346,312,000) ($16,515,000) ($2,149,976,000) ($42,349,140,000)
2008 ($26,120,999,000) ($16,880,000) ($2,241,866,000) ($45,059,470,000)

Fiscal Analysis

The bill would repeal the Tax Code.

The revenue sources repealed would include many of the state's major sources of tax revenues: limited sales and use, motor vehicle sales, motor fuels, franchise, gas & oil severance, tobacco, and mixed beverage. The bill would remove the authority for units of local government to levy property, sales (with some exceptions), and hotel occupancy taxes.

The bill would take effect September 1, 2005.


Methodology

The repeal of the Tax Code would eliminate taxes levied under the code as well as the Comptroller's authority to collect them, thus it was assumed that revenue collections from these taxes would cease on the bill's effective date. This assumption also would apply to the collection of property taxes by local units of government. This analysis assumes there would be no behavioral effect by the taxpayers (i.e., remaining taxes and fees increasing as amounts formerly paid as tax now re-directed). There are some state taxes, as well as local taxes, enacted in other codes that would not be affected by this bill.

The Comptroller's office indicates there would be some initial administrative costs to the agency, then once the repeal took effect, there would be administrative savings. 


Local Government Impact

The revenue implications to local governments are reflected in the above tables.


Source Agencies:
304 Comptroller Of Public Accounts
LBB Staff:
JK, JO, SD, WP