Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
SB843 by Fallon (Relating to a sales tax exemption for items sold, leased, or rented at a United States military installation to a member of the United States armed forces on active duty.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB843, As Introduced: a negative impact of ($15,660,000) through the biennium ending August 31, 2021.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2020
($7,630,000)
2021
($8,030,000)
2022
($8,430,000)
2023
($8,830,000)
2024
($9,230,000)
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
Probable Revenue Gain/(Loss) from Cities
Probable Revenue Gain/(Loss) from Counties & Special Districts
Probable Revenue Gain/(Loss) from Transit Authorities
2020
($7,630,000)
($1,410,000)
($290,000)
($490,000)
2021
($8,030,000)
($1,490,000)
($300,000)
($510,000)
2022
($8,430,000)
($1,560,000)
($320,000)
($540,000)
2023
($8,830,000)
($1,640,000)
($330,000)
($560,000)
2024
($9,230,000)
($1,710,000)
($350,000)
($590,000)
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding the limited sales and use tax, to provide for a sales tax exemption for items sold at United States military installations to active duty military personnel.
The bill would add Section 151.345 to provide for exemption from sales and use tax of items sold, leased, or rented within the boundaries of a United States military installation when purchased by a member of the United States armed forces on active duty and sold by a seller physically located at the installation.
This bill would take effect September 1, 2019.
Methodology
The following data were used to estimate sales to active duty military personnel in military bases: number of active duty military personnel in military installations located in the state from the Texas Military Preparedness Commission; and Comptroller data on estimated taxable sales, leases, or rentals in cities where the military installations are located. Estimated sales, leases, or rentals were adjusted for the share of sales made in businesses located on military installations based on population, multiplied by the sales tax rate, and extrapolated through fiscal 2024.
Local Government Impact
There would be a proportional loss of sales and use tax revenue from units of local government.