Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB619 by Bonnen, Greg (Relating to an exemption from and a limitation on the sales tax imposed on certain boats and boat motors.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB619, As Introduced: a negative impact of ($3,550,000) through the biennium ending August 31, 2017.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016
($1,730,000)
2017
($1,820,000)
2018
($1,910,000)
2019
($2,000,000)
2020
($2,090,000)
Fiscal Year
Probable Revenue (Loss) from General Revenue Fund 1
Probable Revenue (Loss) from Game,Fish,Water Safety Ac 9
2016
($1,730,000)
($91,000)
2017
($1,820,000)
($96,000)
2018
($1,910,000)
($101,000)
2019
($2,000,000)
($105,000)
2020
($2,090,000)
($110,000)
Fiscal Analysis
The bill would amend Chapter 160 of the Tax Code, regarding taxes on sales and use of boats and boat motors.
The bill would add new Section 160.0246 to provide that taxable boats and boat motors are exempt from sales tax if, within 10 days of the sale, the boat or boat motor is sold in this state for use in another state or nation and is removed from this state; or the boat or boat motor is sold in this state for use in another state and not later than 10 days after purchase it is docked or placed at a repair or modification facility that is registered with the Comptroller, is only used to test any repairs or modifications, and is removed from Texas within 20 days after repairs or modifications are completed.
The bill would add new Section 160.026 to limit the amount of tax imposed under Section 160.021 (retail sales tax) on the sale of a taxable boat or boat motor to $15,625.
This bill would take effect September 1, 2015.
Methodology
Approximately 90 percent of the sales taxes for boat and boat motor sales are collected by the Texas Parks and Wildlife Department (TPWD), with 95 percent remitted to the Comptroller for deposit to the General Revenue (GR) Fund 0001 and 5 percent deposited to GR Account 0009-Game, Fish, and Water Safety. TPWD provided information on historical taxable sales transactions from which this fiscal impact estimate was calculated. The losses to Fund 0001 and GR Account 0009 were extrapolated with Comptroller data.
Transaction details for the 10 percent of sales taxes collected by counties (95 percent remitted to the Comptroller for GR; 5 percent retained by the county) are not available.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.