TO: | Honorable Steve Ogden, Chair, Senate Committee on Finance |
FROM: | John S O'Brien, Director, Legislative Budget Board |
IN RE: | SB1004 by Lucio (Relating to the imposition of a tax on certain beverages.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2012 | $473,471,000 |
2013 | $584,995,000 |
2014 | $615,395,000 |
2015 | $609,095,000 |
2016 | $602,995,000 |
Fiscal Year | Probable Revenue Gain from General Revenue Fund 1 |
Probable (Cost) from General Revenue Fund 1 |
Probable Revenue (Loss) from Cities |
Probable Revenue (Loss) from Counties and Special Districts |
---|---|---|---|---|
2012 | $474,900,000 | ($1,429,000) | ($6,400,000) | ($1,100,000) |
2013 | $586,000,000 | ($1,005,000) | ($6,900,000) | ($1,200,000) |
2014 | $616,400,000 | ($1,005,000) | ($6,800,000) | ($1,200,000) |
2015 | $610,100,000 | ($1,005,000) | ($6,700,000) | ($1,200,000) |
2016 | $604,000,000 | ($1,005,000) | ($6,700,000) | ($1,200,000) |
Fiscal Year | Probable Revenue (Loss) from Transit Authorities |
Change in Number of State Employees from FY 2011 |
---|---|---|
2012 | ($2,000,000) | 16.0 |
2013 | ($2,100,000) | 16.0 |
2014 | ($2,100,000) | 16.0 |
2015 | ($2,100,000) | 16.0 |
2016 | ($2,100,000) | 16.0 |
Data on national consumption of soft drinks by volume was apportioned to Texas based on share of population, and amounts attributable to consumption at restaurants and other on-premise consumption such as vending machine sales at businesses excluded. Relative to current soft drink prices at supermarkets and mass merchandisers, the tax would result in a significant price increase that would be expected to depress consumption. The estimated tax base was thus reduced for lower expected consumption, as well as for collection and compliance lags after the effective date. Reduced consumption would also result in a decline in state sales tax revenues from soft drinks.
Because this tax would be collected at the retail level, some retailers may encounter computer system difficulties in collecting a tax based on product volume rather than sales price. Existing taxes based on volume (such as the excise taxes on beer, wine, and distilled spirits) are typically imposed at the distributor level rather than at retail.
It is not clear whether the proposed tax on each sale at retail would be added at the point of sale and thus not be included in the sales price subject to sales tax, or would be included in a retailer's stated product price and thus be included in the sales price subject to sales tax. For purposes of the estimates below, it is assumed that the soft drink tax would not be included in the retail price subject to sales tax.
The administrative cost estimate reflects the funds that would be necessary to hire 16 FTEs and contract for seasonal employees to process applications and forms for the new tax for sale of soft drinks, existing system program changes, and printing costs.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JOB, KK, SD, ACl
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