Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB2250 by Darby (Relating to the classification of certain entities as primarily engaged in retail trade for purposes of the franchise tax.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2250, As Introduced: an impact of $0 through the biennium ending August 31, 2019.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($5,062,000) for the 2018-19 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018
$0
2019
$0
2020
$0
2021
$0
2022
$0
Fiscal Year
Probable Revenue (Loss) from Property Tax Relief Fund 304
2018
($2,501,000)
2019
($2,561,000)
2020
($2,628,000)
2021
($2,693,000)
2022
($2,760,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, to amend the definition for activities engaged in retail trade for purposes of the franchise tax by including linen supply and industrial launderers in that definition.
The bill would take effect January 1, 2018.
Methodology
The estimated fiscal impact is based on franchise tax data for taxable entities in the included activities and on the Comptroller's 2018-2019 Biennial Revenue Estimate. Under the bill, taxable entities would calculate their tax liability using the 0.375 percent rate instead of 0.75 percent under current law.
Local Government Impact
No fiscal implication to units of local government is anticipated.