LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
May 30, 2009

TO:
Honorable David Dewhurst , Lieutenant Governor, Senate
Honorable Joe Straus, Speaker of the House, House of Representatives
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB1801 by Bohac (Relating to exemptions from the sales tax for a limited period for certain backpacks and school supplies specified by the Streamlined Sales and Use Tax Agreement.), Conference Committee Report



Estimated Two-year Net Impact to General Revenue Related Funds for HB1801, Conference Committee Report: a negative impact of ($16,519,000) through the biennium ending August 31, 2011, if the effective date of the bill is July 1, 2009; or a negative impact of ($9,394,000) through the biennium ending August 31, 2011, if the effective date of the bill is October 1, 2009.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2009 ($1,901,000)
2010 ($7,190,000)
2011 ($7,428,000)
2012 ($7,665,000)
2013 ($7,906,000)
2014 ($8,160,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010 ($1,966,000)
2011 ($7,428,000)
2012 ($7,665,000)
2013 ($7,906,000)
2014 ($8,160,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities		 Probable Revenue (Loss) from
Counties
2009 ($1,901,000) $0 $0 $0
2010 ($7,190,000) ($1,337,000) ($456,000) ($189,000)
2011 ($7,428,000) ($1,381,000) ($471,000) ($195,000)
2012 ($7,665,000) ($1,426,000) ($486,000) ($201,000)
2013 ($7,906,000) ($1,470,000) ($501,000) ($208,000)
2014 ($8,160,000) ($1,518,000) ($518,000) ($214,000)

The above bill assumes an effective date of July 1, 2009.  The table below assumes an effective date of October 1, 2009.



Fiscal Year Probable Revenue Gain/(Loss) from
General Revenue Fund
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
Transit Authorities		 Probable Revenue Gain/(Loss) from
Counties
2010 ($1,966,000) $0 $0 $0
2011 ($7,428,000) ($1,381,000) ($471,000) ($195,000)
2012 ($7,665,000) ($1,426,000) ($486,000) ($201,000)
2013 ($7,906,000) ($1,470,000) ($501,000) ($208,000)
2014 ($8,160,000) ($1,518,000) ($518,000) ($214,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code, regarding a sales tax exemption for certain purchases of school backpacks.

The bill would provide a definition for a "backpack," and would extend this exemption to include school supplies as defined by the Streamlined Sales and Use Tax Agreement.  School supplies would be exempt from the sales tax if purchased for use by a student in a public or private elementary or secondary school, had a sale price of less than $100, and were purchased during the three-day sales tax holiday on clothing and footwear each August.

The bill would take effect July 1, 2009, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature.  Otherwise, it would take effect October 1, 2009.


Methodology

Data on the sale of school supplies were obtained from the U.S. Bureau of the Census. The data were adjusted for the appropriate price range and time period, multiplied by the state sales tax rate, adjusted for the potential effective dates of July 1, 2009 and October 1, 2009, and extrapolated through fiscal 2014.

Local Government Impact

There would be a proportional loss of sales tax revenue to units of local government.  There would be no impact on local governments in the first year of implementation as August sales tax collections remitted to the Comptroller will not be allocated to the local jurisdictions until the following fiscal year.


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