TO: | Honorable Dennis Bonnen, Chair, House Committee on Ways & Means |
FROM: | Ursula Parks, Director, Legislative Budget Board |
IN RE: | HB32 by Bonnen, Dennis (relating to the computation and rates of the franchise tax; decreasing tax rates; amending provisions subject to a criminal penalty.), Committee Report 1st House, Substituted |
Summary of Elements: HB 32, Committee Report 1st House, Substituted
(CSHB 32)
This analysis is for taxes effective in fiscal year 2017.
Revenue Changes
Dollar Value of Revenue Changes in Fiscal 2017
Initial Impact in Fiscal 2017
Major Industry Initial Impact in Fiscal 2017
Initial Tax Impact by Industry
CSHB 32 was analyzed using the LBB's multi-tax model to determine the initial impact of the proposed changes relative to current state and local tax law. The results of the analysis are shown in Table 1 below.
Current Law Liability | Percent of Total | Proposed Law Liability | Percent of Total | Change in Liability | Percent of Total | Percent Change in Liability | |
[$ Million] | [%] | [$ Million] | [%] | [$ Million] | [%] | [%] | |
Taxes Paid by Business: | |||||||
Agriculture, Forestry, Fishing & | 1,124.0 | 2.0% | 1,120.14 | 2.0% | -3.9 | 0.3% | -0.34% |
Mining | 10,212.1 | 18.0% | 10,099.50 | 18.2% | -112.6 | 8.7% | -1.10% |
Utilities & Transportation | 6,752.3 | 11.9% | 6,672.90 | 12.0% | -79.4 | 6.1% | -1.18% |
Construction | 2,893.3 | 5.1% | 2,849.18 | 5.1% | -44.2 | 3.4% | -1.53% |
Manufacturing | 7,353.0 | 13.0% | 7,127.06 | 12.9% | -226.0 | 17.5% | -3.07% |
Wholesale & Retail Trade | 5,138.6 | 9.1% | 4,932.04 | 8.9% | -206.6 | 16.0% | -4.02% |
Information | 3,563.9 | 6.3% | 3,427.05 | 6.2% | -136.9 | 10.6% | -3.84% |
Finance, Insurance & Real Estate | 12,297.5 | 21.7% | 12,200.69 | 22.0% | -96.9 | 7.5% | -0.79% |
All Other Services | 7,365.9 | 13.0% | 6,980.93 | 12.6% | -385.0 | 29.8% | -5.23% |
Total Taxes on Business: | 56,700.9 | 100.0% | 55,409.48 | 100.0% | -1,291.384 | 100.0% | -2.28% |
Taxes Paid by Households: | |||||||
Residential Owner-Occupied | 27,033.02 | 27,033.02 | 0 | 0 | |||
Personal Consumption | 24,875.50 | 24,875.50 | 0 | 0 | |||
Total Taxes on Households: | 51,908.52 | 51,908.52 | 0 | 0 | |||
Total Taxes | 108,609.38 | 107,318.00 | -1,291.384 | -1.19% |
Final Incidence of Changes Effective in Fiscal 2017
Quintile | Quintile Income: Lower Bound | Quintile Income: Upper Bound | Current Law Tax | Percent of Total | Proposed Law Tax | Percent of Total | Change in Tax | Percent of Reduction |
[$] | [$] | [$ Million] | [%] | [$ Million] | [%] | [$ Million] | [%] | |
1 | 0 | 34,161 | 6,806.7 | 8.1% | 6,733.07 | 8.1% | -73.6 | 5.7% |
2 | 34,161 | 61,955 | 9,645.6 | 11.5% | 9,537.10 | 11.4% | -108.5 | 8.4% |
3 | 61,955 | 94,319 | 13,243.5 | 15.7% | 13,095.81 | 15.7% | -147.7 | 11.4% |
4 | 94,319 | 147,411 | 19,203.8 | 22.8% | 18,992.67 | 22.8% | -211.1 | 16.3% |
5 | 147,411 | and above | 35,335.0 | 41.9% | 34,972.59 | 42.0% | -362.4 | 28.1% |
Total: | 84,234.5 | 83,331.24 | -903.3 | 69.9% | ||||
Total Residents: | -903.3 | 69.9% | ||||||
Total Exported: | -388.1 | 30.1% |
Quintile | Quintile Income: Lower Bound | Quintile Income: Upper Bound | Current Law Effective Rate | Proposed Law Effective Rate | Change in Effective Rate |
[$] | [$] | [%] | [%] | [%] | |
1 | 0 | 34,161 | 23.6% | 23.3% | -0.25% |
2 | 34,161 | 61,955 | 12.8% | 12.6% | -0.14% |
3 | 61,955 | 94,319 | 11.0% | 10.9% | -0.12% |
4 | 94,319 | 147,411 | 9.9% | 9.8% | -0.11% |
5 | 147,411 | and above | 6.4% | 6.4% | -0.07% |
Total: | 8.7% | 8.6% | -0.09% |
Source Agencies: |
LBB Staff: | UP, KK, SD
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