HB 1625

84(R) - 2015
House Ways & Means
House Ways & Means

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral


Wayne Faircloth

Bill Caption

Relating to an exemption from the sales and use tax for certain lightbulbs for a limited period.

Fiscal Notes

A fiscal note dated March 23, 2015 anticipates a negative two-year net impact to General Revenue Related Funds of $1,380,000 through the biennium ending August 31, 2017.

There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions.

Bill Analysis

House Bill 1625 would amend Section 151.333 of the Tax Code related to temporary tax exemptions for energy-efficient products in order to add to the list of products light-emitting diode (LED) lightbulbs.

Vote Recommendation Notes

Under current law (Section 151.333 of the Tax Code), a list of energy-efficient products when designated as an Energy Star qualified product under the Energy Star program jointly operated by the United States Environmental Protection Agency and the United States Department of Energy, are exempt from the sales tax when the sale takes place during Memorial Day weekend.

In the list of products potentially eligible for this tax exemption are incandescent and fluorescent lightbulbs. House Bill 1625 would add light-emitting diode (LED) lightbulbs.

According to the statement of intent for the bill LED lightbulbs should be included because of their potential economic and environmental benefit. But the role of government is not to decide which products have more economic and environmental benefits for everyone, and in doing so to favor certain products above others.

Section 151.333 already favors a particular category of energy-efficient products - products certified by a particular EPA program, over any other products during the time of a weekend. Such favors create distortions and impede the free market system.

It should also be pointed out that consumers are not actually guaranteed savings under these tax holiday schemes. There is nothing preventing merchants from raising prices by the amount that would have been reduced at the register through the tax break. Furthermore, prices can rise due to supply and demand issues created when people rush to purchase tax-exempt goods. Either or both of these factors can lead to consumers actually paying more than they would have if the government had avoided tinkering in the marketplace to begin with.

Nevertheless, because other categories of lightbulbs are already tax-exempt in statute during this tax-free weekend, and House Bill 1625 is only adding a category of lightbulbs, correcting a possible competitive disadvantage that leaving it out of the list had created, we will remain neutral on this bill.