LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
 
April 17, 2013

TO:
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB40 by Menéndez (Relating to the sales tax exemption period for clothing, footwear, and certain other items.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB40, As Introduced: a negative impact of ($38,167,000) through the biennium ending August 31, 2015, if the bill takes immediate effect; or a negative impact of ($22,317,000) through the biennium ending August 31, 2015, if the effective date of the bill is September 1, 2013.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2013 ($5,117,000)
2014 ($16,100,000)
2015 ($16,950,000)
2016 ($17,800,000)
2017 ($18,625,000)
2018 ($19,550,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2014 ($5,367,000)
2015 ($16,950,000)
2016 ($17,800,000)
2017 ($18,625,000)
2018 ($19,550,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities		 Probable Revenue (Loss) from
Counties and Special Districts
2013 ($5,117,000) ($947,000) ($327,000) ($164,000)
2014 ($16,100,000) ($2,979,000) ($1,030,000) ($515,000)
2015 ($16,950,000) ($3,136,000) ($1,085,000) ($542,000)
2016 ($17,800,000) ($3,293,000) ($1,139,000) ($570,000)
2017 ($18,625,000) ($3,446,000) ($1,192,000) ($596,000)
2018 ($19,550,000) ($3,617,000) ($1,251,000) ($626,000)

The above table assumes the bill takes immediate effect.  The table below assumes an effective date of September 1, 2013.



Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities		 Probable Revenue (Loss) from
Counties and Special Districts
2014 ($5,367,000) ($993,000) ($343,000) ($172,000)
2015 ($16,950,000) ($3,136,000) ($1,085,000) ($542,000)
2016 ($17,800,000) ($3,293,000) ($1,139,000) ($570,000)
2017 ($18,625,000) ($3,446,000) ($1,192,000) ($596,000)
2018 ($19,550,000) ($3,617,000) ($1,251,000) ($626,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax, to provide for a second three-day period during which certain items of clothing, footwear, backpacks and school supplies are exempt from sales tax.  Under current law, the back-to-school sales tax holiday begins on the eighth day preceding the earliest date on which any school district, other than a district operating on a year-round system, may begin instruction for the school year.  The bill would provide for a second sales tax holiday beginning on the fifteenth day preceding the earliest date on which any school district, other than a district operating on a year-round system, may begin instruction for the school year. 

This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature.  Otherwise, it would take effect September 1, 2013.


Methodology

The revenue implications from an additional three-day period of exempt sales were estimated proportionally to the revenue collection impacts from the existing sales tax holiday implications in the 2014-15 Biennial Revenue Estimateand as published in the Tax Exemptions & Tax Incidence report. The result was then adjusted for implementation dates.  The fiscal impacts on units of local government were estimated proportionally.

Local Government Impact

There would be a corresponding loss of sales and use tax revenue to local taxing jurisdictions.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
UP, KK, SD