LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION
 
April 20, 2005

TO:
Honorable Jim Keffer, Chair, House Committee on Ways & Means
 
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
 
IN RE:
HB2789 by Veasey (Relating to sales tax refunds for certain purchases made by certain grandparents.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB2789, As Introduced: a negative impact of ($84,113,000) through the biennium ending August 31, 2007.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006 ($39,397,000)
2007 ($44,716,000)
2008 ($46,528,000)
2009 ($48,445,000)
2010 ($50,743,000)




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
Transit Authorities		 Probable Revenue Gain/(Loss) from
Counties/SPDs
2006 ($39,397,000) ($6,672,000) ($2,295,000) ($830,000)
2007 ($44,716,000) ($8,330,000) ($2,865,000) ($1,037,000)
2008 ($46,528,000) ($8,667,000) ($2,982,000) ($1,079,000)
2009 ($48,445,000) ($9,024,000) ($3,104,000) ($1,123,000)
2010 ($50,743,000) ($9,452,000) ($3,252,000) ($1,176,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code to allow a sales tax refund for certain purchases made by grandparents.

A person could apply to the Comptroller for a refund of sales taxes paid on items purchased primarily for use by a child if the person was the grandparent of the child who lived at the person's residence, the person was the primary caretaker of the child, and the person had a family income at or below 200 percent of the federal poverty level.

The bill would take effect September 1, 2005.


Methodology

Data on the number of households in Texas where grandparents are the primary caretaker of a child were gathered from the U.S. Census Bureau. The number of households was adjusted for those at or below 200 percent of the federal poverty level to determine the number of eligible households. Sales taxes paid by eligible households were estimated based on the data from the Comptroller's Tax Exemptions and Tax Incidence report. Sales taxes paid by eligible household were then adjusted for purchases primarily for the benefit of a child, adjusted for effective date, and extrapolated through fiscal 2010. The fiscal impact on units of local government were estimated proportionally.

Local Government Impact

Local units of government would have a corresponding fiscal impact from sales tax revenues, as indicated in the above table.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, SD, WP, SM