84(R) - 2015
Relating to the repeal of certain state taxes.
A fiscal note dated March 2, 2015 anticipates a two-year net negative impact to general revenue related funds of $2,482,000 through the biennium ending August 31, 2017.
Nevertheless, the fiscal note also indicates that the Comptroller of Public Accounts estimates the revenue loss from the repeal of the liquefied gas tax and the bingo gross rental tax could be offset. Repealing these two taxes, as well as inheritance, controlled substances, oil regulation, sulphur, and fireworks taxes, would allow the Comptroller to redeploy resources to audit and enforcement activities for other sources of revenue, which could in turn generate the revenue sufficient to offset revenue lost from Senate Bill 759.
Senate Bill 759 would repeal the bingo gross rental tax and the liquefied gas tax.
Currently, a tax is levied on the rental of halls to hold bingo. This tax would be repealed, but bingo-related fees would remain unchanged.
The bill would also repeal the tax that is imposed on motor vehicles that operate on liquefied petroleum gas (also know as propane). Currently, people that operate a liquefied gas-powered motor vehicle must either purchase a pre-paid decal that proves they have paid applicable taxes on
their fuel, or pay the tax at the pump.
According to the bill's author's office, the liquefied gas tax raised $581,887.60 in revenues in 2014, with 948 prepaid liquefied gas license holders obtaining 4,669 prepaid decals
annually. Senate Bill 759 would repeal this tax, and would also exempt liquefied petroleum gas, when used for the propulsion of a motor vehicle on the public highways of Texas, from the sales tax under Chapter 151.
People who have already paid for a decal would be able to ask for a pro rata refund. Senate Bill 759 would not prevent some municipal transit authorities that still operate on liquefied gas, including compressed natural gas and liquefied natural gas, to continue to operate under the decal system if they so wish.
Vote Recommendation Notes
No amendments have been introduced on the Senate floor and no changes have been made to the bill in House committee. We continue to support it.
The second chamber sponsor is Representative John Wray.
First chamber recommendation:
Collecting taxes, as well as tax auditing and enforcement activities, cost money to the Comptroller's office, and consequently to taxpayers. When a tax is not bringing significant revenues that offset the costs to taxpayers of collecting it, the tax should be repealed. The Comptroller's Office has indicated that the resources that are currently being used to collect the bingo gross rental tax and the liquefied gas tax could be better used. The repeal of both taxes would favor a more efficient, limited government.
Additionally, this bill would exempt liquefied petroleum gas from the sales tax only when the liquefied petroleum gas is used for the propulsion of a motor vehicle on the public highways of Texas because the number of liquefied petroleum gas-powered vehicles is low.
Repealing these taxes across the board would also have a positive effect on the economy: it would bring tax relief to nonprofit organizations that rent bingo halls for charitable events and businesses or individuals that use vehicles that operate on liquefied gas. They would then be free to spend this extra money the way they best see fit. As a consequence, we support Senate Bill 759.