LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION

March 7, 2011

TO:	Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM:	John S O'Brien, Director, Legislative Budget Board
IN RE:	HB2045 by Burnam (Relating to certain reimbursements provided for the collection of sales and use taxes.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB2045, As Introduced: a positive impact of $85,300,000 through the biennium ending August 31, 2013.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012	$39,800,000
2013	$45,500,000
2014	$48,000,000
2015	$51,000,000
2016	$53,900,000

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain/(Loss) from General Revenue Fund 1	Probable Revenue Gain/(Loss) from Counties	Probable Revenue Gain/(Loss) from Transit Authorities	Probable Savings/(Cost) from General Revenue Fund 1
2012	$43,100,000	$8,400,000	$500,000	($3,300,000)
2013	$45,500,000	$8,900,000	$500,000	$0
2014	$48,000,000	$9,300,000	$600,000	$0
2015	$51,000,000	$9,900,000	$600,000	$0
2016	$53,900,000	$10,500,000	$600,000	$0

Fiscal Analysis

The bill would implement a recommendation in the report, "Reduce General Revenue Loss from Sales Tax Discounts" in the Legislative Budget Board's Government Effectiveness and Efficiency Report submitted to the Eighty-second Texas Legislature, 2011. The bill would amend Section 151.423, Tax Code, to increase the timely filer discount from 0.5 percent to 0.75 percent and establish $3,750 as the maximum dollar amount per year that any one retailer could retain for the timely filing of sales tax based on the state portion of the remittance. The cap would be $312 per month for monthly filers and $937 per quarter for quarterly filers.

Methodology

The annual amounts for the timely filer discount as anticipated in the 2012-2013 Biennial Revenue Estimate were adjusted to reflect the increase in the discount from 0.5 percent to 0.75 percent.  Historical data from Comptroller tax files were analyzed to determine the portion of sales tax remittances that would result in timely filer discounts in excess of the proposed annual cap of $3,750.  This difference was deducted from the adjusted annual amounts to determine the annual cost of the discount under the provisions in the bill.  This cost was subtracted from the cost anticipated under current law to determine the estimated fiscal implications.

Technology

The Comptroller of Public Accounts anticipates a one-time cost of $3,300,000 in fiscal year 2012 for programming and project management.

Local Government Impact

The estimated revenue gain for local governments is $18,300,000 for the 2012-13 biennium. 

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JOB, KK, JI, YD