LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION
 
April 29, 2007

TO:
Honorable Steve Ogden, Chair, Senate Committee on Finance
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
SB106 by Ellis (Relating to the exemption from the sales tax for clothing and footwear.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for SB106, As Introduced: a negative impact of ($209,327,000) through the biennium ending August 31, 2009, if the effective date of the bill is July 1, 2007; or a negative impact of ($119,236,000) through the biennium ending August 31, 2009, if the effective date of the bill is October 1, 2007.

 The following fiscal implications assume an effective date of July 1, 2007.




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2007 ($23,976,000)
2008 ($91,001,000)
2009 ($94,350,000)
2010 ($97,743,000)
2011 ($101,339,000)
2012 ($105,102,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008 ($24,886,000)
2009 ($94,350,000)
2010 ($97,743,000)
2011 ($101,339,000)
2012 ($105,102,000)




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
Counties/SPDs		 Probable Revenue Gain/(Loss) from
Transit Authorities
2007 ($23,976,000) $0 $0 $0
2008 ($91,001,000) ($16,952,000) ($2,109,000) ($5,831,000)
2009 ($94,350,000) ($17,576,000) ($2,187,000) ($6,046,000)
2010 ($97,743,000) ($18,208,000) ($2,266,000) ($6,263,000)
2011 ($101,339,000) ($18,877,000) ($2,349,000) ($6,494,000)
2012 ($105,102,000) ($19,578,000) ($2,436,000) ($6,735,000)

 The following fiscal implications assume an effective date of October 1, 2007.




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
County/SPDs		 Probable Revenue Gain/(Loss) from
Transit Authorities
2008 ($24,886,000) $0 $0 $0
2009 ($94,350,000) ($17,576,000) ($2,187,000) ($6,046,000)
2010 ($97,743,000) ($18,208,000) ($2,266,000) ($6,263,000)
2011 ($101,339,000) ($18,877,000) ($2,349,000) ($6,494,000)
2012 ($105,102,000) ($19,578,000) ($2,436,000) ($6,735,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code to extend the August sales tax holiday on clothing and footwear to 15 days from three days.

The bill would take effect July 1, 2007, if it receives two-thirds vote in each house; otherwise, it would take effect October 1, 2007.


Methodology

For the purpose of this estimate, the Comptroller of Public Accounts gathered data from the U.S. Census Bureau on the sale of clothing and footwear in Texas. The Comptroller adjusted the clothing and footwear sales data for the appropriate price range and duration of the holiday period. The estimates were multiplied by the state sales tax rate and extrapolated through fiscal 2012. The Comptroller proportionally estimated the fiscal impacts on units of local government.


Local Government Impact

Local units of government would have a corresponding fiscal impact from sales tax revenues, as indicated in the above table. According to the Comptroller of Public Accounts, there would be no impact on local governments in fiscal 2007 as August sales tax collections remitted to the Comptroller are not allocated to the local jurisdictions until the next fiscal year.



Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, CT, MN, SD, EB