LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
 
March 13, 2011

TO:
Honorable Steve Ogden, Chair, Senate Committee on Finance
 
FROM:
John S O'Brien, Director, Legislative Budget Board
 
IN RE:
SB52 by Zaffirini (Relating to exempting books purchased by university and college students from the sales tax for a limited period.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for SB52, As Introduced: a negative impact of ($58,600,000) through the biennium ending August 31, 2013, if the effective date of the bill is July 1, 2011; or a negative impact of ($45,500,000) through the biennium ending August 31, 2013, if the effective date of the bill is October 1, 2011.

 The following fiscal implications assume an effective date of July 1, 2011.




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2011 ($4,200,000)
2012 ($26,600,000)
2013 ($27,800,000)
2014 ($29,000,000)
2015 ($30,500,000)
2016 ($32,000,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012 ($17,700,000)
2013 ($27,800,000)
2014 ($29,000,000)
2015 ($30,500,000)
2016 ($32,000,000)




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
2011 ($4,200,000) $0 $0 $0
2012 ($26,600,000) ($5,200,000) ($1,600,000) ($900,000)
2013 ($27,800,000) ($5,400,000) ($1,700,000) ($900,000)
2014 ($29,000,000) ($5,600,000) ($1,800,000) ($1,000,000)
2015 ($30,500,000) ($5,900,000) ($1,900,000) ($1,000,000)
2016 ($32,000,000) ($6,200,000) ($1,900,000) ($1,100,000)

The following fiscal implications assume an effective date of October 1, 2011.



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
2012 ($17,700,000) ($3,400,000) ($1,100,000) ($600,000)
2013 ($27,800,000) ($5,400,000) ($1,700,000) ($900,000)
2014 ($29,000,000) ($5,600,000) ($1,800,000) ($1,000,000)
2015 ($30,500,000) ($5,900,000) ($1,900,000) ($1,000,000)
2016 ($32,000,000) ($6,200,000) ($1,900,000) ($1,100,000)

Fiscal Analysis

SB 52 would amend Tax Code to exempt books from the sales tax when purchased by a student enrolled at a Texas institution of higher education. To qualify for the tax exemption, the sale must take place within a specified 10-day period each January and August. Eligibility would be established by presenting a valid student identification card.

This bill would take effect July 1, 2011, if receiving a two-thirds vote in both houses of the Legislature. Otherwise, the bill would take effect October 1, 2011.


Methodology

The Comptroller of Public Accounts gathered data on the sale of books in Texas from public and private sources, including Comptroller tax files. Estimated book sales were adjusted for the exemption period; multiplied by the sales tax rate; adjusted for the potential effective bill dates of July 1, 2011, and October 1, 2011; and extrapolated through fiscal 2016. Fiscal implications on units of local government were estimated proportionally.


Local Government Impact

Units of local government would experience a loss in 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 2011, in either effective date scenario, as August sales tax collections remitted to the Comptroller are not allocated to the local jurisdiction until the next fiscal year.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, KK, JI, KY