Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB1681 by Button (Relating to the applicability of sales and use taxes to certain services provided by a marketplace provider.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1681, As Introduced: an impact of $0 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 of ($60,490,000) for the 2026-27 biennium. Any loss to the Tax Reduction and Excellence in Education 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
$0
2027
$0
2028
$0
2029
$0
2030
$0
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue (Loss) from Tax Reduc. & Excell. Edu. Fund 305
Probable Revenue (Loss) from Cities
Probable Revenue (Loss) from Transit Authorities
Probable Revenue (Loss) from Counties & Special Districts
2026
($26,430,000)
($4,840,000)
($1,600,000)
($1,190,000)
2027
($34,060,000)
($6,230,000)
($2,070,000)
($1,540,000)
2028
($36,480,000)
($6,670,000)
($2,210,000)
($1,650,000)
2029
($39,000,000)
($7,140,000)
($2,370,000)
($1,760,000)
2030
($41,730,000)
($7,640,000)
($2,530,000)
($1,880,000)
Fiscal Analysis
The bill would exclude services provided by a marketplace provider in relation to the processing of a sale or payment for a marketplace seller, as defined in statute, from the taxes imposed under this chapter.
The bill would take effect September 1, 2025.
Methodology
According to the Comptroller, data from corporate filings and other public reports on the various fees charged by e-commerce platform providers was used to estimate revenue from sales of taxable data processing services to marketplace sellers located in the state, multiplied by the sales tax rate, and extrapolated forward based on the rate of growth in tax revenue from marketplace providers anticipated in the 2026-27 Biennial Revenue Estimate.
Local Government Impact
There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions displayed in the above tables.