Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM:
John S O'Brien, Director, Legislative Budget Board
IN RE:
SB1172 by Deuell (Relating to automated sales and use tax remittances by retailers.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1172, As Introduced: a negative impact of ($4,568,000) 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.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012
($4,130,000)
2013
($438,000)
2014
($438,000)
2015
($438,000)
2016
($438,000)
Fiscal Year
Probable (Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2011
2012
($4,130,000)
2.0
2013
($438,000)
2.0
2014
($438,000)
2.0
2015
($438,000)
2.0
2016
($438,000)
2.0
Fiscal Analysis
The bill would amend Chapter 151, Tax Code, to provide for automated sales tax remittance systems.
A retailer of taxable items would be required to notify the comptroller if the retailer enrolls in an automated sales tax remittance system.
A retailer that uses an automated sales tax remittance system could be required to remit on a more frequent basis than monthly or quarterly as determined by the comptroller.
The comptroller would be required to establish guidelines for certification of an operator of an automated sales tax remittance system. Conditions for certification would include compliance with comptroller electronic filing system requirements, and provision of a split funding process by which a portion of a retailer's daily credit card receipts are deposited in a separate bank account for satisfaction of tax payment liabilities under Chapter 151. A retailer could not be required to pay an extra bank or credit card processing fee for maintenance of the separate bank account.
The comptroller would be required to notify holders of sales tax permits of all persons certified as automated sales tax remittance system operators. Such notice would be required to be included in any correspondence to permit holders, on the comptroller's website, and on the form prescribed under Section 151.202. Modification of the comptroller's correspondence, website, and forms to provide such notice would not be required until the comptroller modifies them for other reasons.
The comptroller would have authority to require a retailer to enroll with an automated sales tax remittance if the comptroller deemed it necessary to ensure compliance with Chapter 151.
The bill would take effect September 1, 2011.
Methodology
The bill would amend the sales tax code regarding procedures for tax remittance but would not alter tax liabilities nor significantly affect tax compliance, thus no significant revenue implications would be anticipated. The administrative cost estimate reflects the funds that would be necessary for 2 FTEs for software and infratructure support as well as printing and postage costs to inform taxpayers.
Technology
There would be a one time technology costs to the Comptroler's Office of $3,900,000 for programming and project management and an ongoing cost of $50,000 for annual maintenance.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.