TO: | Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means |
FROM: | John S O'Brien, Director, Legislative Budget Board |
IN RE: | HB2547 by Zerwas (Relating to the definition of little cigars and tobacco products tax on little cigars.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2012 | ($14,561,000) |
2013 | ($15,597,000) |
2014 | ($16,706,000) |
2015 | ($17,893,000) |
2016 | ($19,166,000) |
Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
Probable Revenue Gain/(Loss) from Property Tax Relief Fund 304 |
---|---|---|
2012 | ($14,561,000) | $26,293,000 |
2013 | ($15,597,000) | $28,971,000 |
2014 | ($16,706,000) | $29,412,000 |
2015 | ($17,893,000) | $29,963,000 |
2016 | ($19,166,000) | $30,633,000 |
The bill's changes for little cigars would significantly increase their tax rate—from the current 2 or 15 cents per pack to $1.41 per pack—and this will result in a reduction of taxable consumption in Texas. In addition, the efforts by state and federal governments to reduce Internet cigarette sales that avoid state taxation generally do not apply to cigars, and this analysis assumed some consumers will use the Internet to purchase cigars. First year revenue collections were adjusted for collections lags.
The bill adds a new subsection to Section 155.021 of the Tax Code, regarding the tax imposed on cigars, to deposit revenue from the “fee” imposed in this section to Property Tax Relief Fund 0304. This analysis assumes the new subsection refers to the various tax rates imposed on cigars. Under Section 155.241 of this Code, all revenue collected from cigar taxes is deposited to General Revenue Fund 0001, and therefore the new subsection would result in a loss to Fund 0001.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JOB, KK, AG
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