LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
 
May 14, 2015

TO:
Honorable Jane Nelson, Chair, Senate Committee on Finance
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB1841 by Bonnen, Greg (Relating to the applicability of the sales and use tax to certain insurance services.), As Engrossed



Estimated Two-year Net Impact to General Revenue Related Funds for HB1841, As Engrossed: a negative impact of ($13,880,000) through the biennium ending August 31, 2017.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016 ($6,800,000)
2017 ($7,080,000)
2018 ($7,370,000)
2019 ($7,690,000)
2020 ($8,030,000)




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
2016 ($6,800,000) ($1,250,000) ($430,000) ($230,000)
2017 ($7,080,000) ($1,310,000) ($450,000) ($240,000)
2018 ($7,370,000) ($1,360,000) ($470,000) ($250,000)
2019 ($7,690,000) ($1,420,000) ($490,000) ($260,000)
2020 ($8,030,000) ($1,480,000) ($510,000) ($270,000)

Fiscal Analysis

The bill would amend Section 151.0039 of the Tax Code, regarding sales and use taxes, to exclude from the definition of "insurance service" a service: 1) performed on behalf of an insured by a public insurance adjuster licensed under Chapter 4102, Insurance Code, or 2) provided by a person certified as a public accountant under Chapter 901, Occupations Code.
 
The bill would take effect October 1, 2015.

Methodology

Comptroller data on taxable sales in the insurance services and accounting sectors were adjusted to shares expected to be exempted by the bill, multiplied by the state sales tax rate, and extrapolated through 2020.

Local Government Impact

There would be a proportional loss of sales and use tax revenue from local taxing jurisdictions.


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