Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB1133 by Otto (Relating to a sales and use tax exemption for tangible personal property used to provide cable television service, Internet access service, or telecommunications services and to the exclusion of that property in certain economic development agreements.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1133, As Introduced: a negative impact of ($885,100,000) through the biennium ending August 31, 2015.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2014
($413,600,000)
2015
($471,500,000)
2016
($492,700,000)
2017
($514,900,000)
2018
($538,100,000)
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
2014
($413,600,000)
($76,300,000)
($25,900,000)
($13,000,000)
2015
($471,500,000)
($87,000,000)
($29,500,000)
($14,800,000)
2016
($492,700,000)
($90,900,000)
($30,900,000)
($15,500,000)
2017
($514,900,000)
($95,000,000)
($32,300,000)
($16,200,000)
2018
($538,100,000)
($99,300,000)
($33,700,000)
($16,900,000)
Fiscal Analysis
The bill would amend Chapters 151 and 313, Tax Code, in relation to taxation of certain property used to provide cable television service, internet access service, and telecommunications service.
A new Section 151.3186 would be added to provide for exemption from sales and use tax of tangible personal property directly used or consumed in or during the provision, creation, or production of cable television service, internet access service, or telecommunications services by the service provider or a subsidiary, affiliate, or partner of the service provider.
Section 313.021(2) would be amended to exclude property exempt under Section 151.3186 from a limitation on appraised value in an economic development agreement under Chapter 313.
The bill would take effect September 1, 2013.
Methodology
Census Bureau data on telecommunications industry national capital expenditures on equipment and noncapitalized equipment and software expenditures was apportioned to Texas based on population, multiplied by the state sales tax rate, extrapolated through the forecast period, and adjusted for the effective date.
Local Government Impact
There would be a proportional loss of sales and use tax revenue to local taxing jurisdictions.