LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
 
April 21, 2015

TO:
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB31 by Bonnen, Dennis (relating to decreasing the state sales and use tax rate.), Committee Report 1st House, Substituted



Estimated Two-year Net Impact to General Revenue Related Funds for HB31, Committee Report 1st House, Substituted: a negative impact of ($2,660,000,000) through the biennium ending August 31, 2017.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016 ($1,190,000,000)
2017 ($1,470,000,000)
2018 ($1,550,000,000)
2019 ($1,650,000,000)
2020 ($1,760,000,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
State Highway Fund
6 		Probable Revenue Gain from
Cities		 Probable Revenue Gain from
Transit Authorities
2016 ($1,190,000,000) ($1,800,000) $9,200,000 $3,100,000
2017 ($1,470,000,000) ($2,200,000) $9,800,000 $3,300,000
2018 ($1,550,000,000) ($2,200,000) $10,400,000 $3,600,000
2019 ($1,650,000,000) ($2,200,000) $11,100,000 $3,800,000
2020 ($1,760,000,000) ($2,200,000) $11,800,000 $4,000,000

Fiscal Year Probable Revenue Gain from
Counties and Special Districts
2016 $1,700,000
2017 $1,800,000
2018 $1,900,000
2019 $2,000,000
2020 $2,200,000

Fiscal Analysis

The bill would amend Section 151.051 of the Tax Code, to decrease the sales tax rate to 5.95 percent. The current rate is 6.25 percent.
 
The bill would take effect October 1, 2015.

Methodology

The forecasts of revenues for the limited sales and use tax in the 2016-17 Biennial Revenue Estimate were adjusted for the rate change, extrapolated through 2020, and adjusted for the effective date.

Local Government Impact

The decrease in the state tax rate would be expected to result in a marginal increase in expenditures on taxable items and thus marginal increases in local sales and use tax revenues.


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