LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
 
March 23, 2025

TO:
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
 
FROM:
Jerry McGinty, Director, Legislative Budget Board
 
IN RE:
HB1632 by González, Mary (Relating to an exemption from sales and use taxes for animal food intended for consumption by domesticated animals.), As Introduced


Estimated Two-year Net Impact to General Revenue Related Funds for HB1632, As Introduced: a negative impact of ($668,370,000) through the biennium ending August 31, 2027.

Additionally, the bill will have a direct impact of a revenue loss to the Tax Reduction and Excellence in Education Fund (TREE) of ($24,250,000) for the 2026-27 biennium.  Any loss to the TREE must be made up with an equal amount of General Revenue to fund the Foundation School Program.

General Revenue-Related Funds, Five- Year Impact:

Fiscal Year Probable Net Positive/(Negative) Impact to
General Revenue Related Funds
2026($312,800,000)
2027($355,570,000)
2028($369,800,000)
2029($380,150,000)
2030($406,760,000)

All Funds, Five-Year Impact:

Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1		 Probable Revenue (Loss) from
Tax Reduc. & Excell. Edu. Fund
305		 Probable Revenue (Loss) from
Cities
 Probable Revenue (Loss) from
Transit Authorities
2026($312,800,000)($11,350,000)($59,310,000)($19,660,000)
2027($355,570,000)($12,900,000)($67,420,000)($22,350,000)
2028($369,800,000)($13,410,000)($70,120,000)($23,240,000)
2029($380,150,000)($13,790,000)($72,080,000)($23,890,000)
2030($406,760,000)($14,760,000)($77,130,000)($25,560,000)

Fiscal Year Probable Revenue (Loss) from
Counties & Special Districts
2026($14,620,000)
2027($16,620,000)
2028($17,280,000)
2029($17,770,000)
2030($19,010,000)


Fiscal Analysis

The bill would exempt food intended for consumption by domesticated animals from sales and use tax.  The bill would take effect September 1, 2025.

Methodology

For the purposes of this analysis, animal food intended for “domesticated animals” is treated as food for household pets, not that intended for animals commonly found only on a farm and/or ranch. Data from industry reports regarding amounts spent annually on pet food were apportioned to Texas on a per capita basis. The result was then adjusted for the effective date of the bill and extrapolated forward.

Local Government Impact

The bill would result in a corresponding loss of sales and use tax revenue from local taxing jurisdictions displayed in the above tables.


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