84(R) - 2015
House Ways & Means
House Ways & Means
Relating to the exemption of nonprofit ambulance companies from motor fuel taxes.
A fiscal note dated April 12, 2015 anticipates a negative two-year net impact to General Revenue Related Funds of $193,000 through the biennium ending August 31, 2017, if the effective date of the bill is July 1, 2015; or a negative impact of $177,000 through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
House Bill 2731 would amend Chapter 162 of the Tax Code related to motor fuel taxes to exempt nonprofit ambulances from the gasoline tax, the diesel fuel tax, the liquefied gas tax, the compressed natural gas and liquefied natural gas tax.
Exempted nonprofit entities that paid one of these taxes, except for the liquefied gas tax, would be entitled to a refund of the tax paid and the entity would be able to file a refund claim with the comptroller for that amount.
A motor vehicle that uses liquefied petroleum gas and that is owned by an exempted nonprofit entity would not need a liquefied gas tax decal or a special use liquefied gas tax decal.
An eligible entity would be a nonprofit entity that is organized for the sole purpose of and engages exclusively in providing emergency medical services and that uses the gasoline exclusively to provide emergency medical services, including rescue and ambulance services.
Vote Recommendation Notes
Under current law, counties are exempt from paying the liquefied gas tax or the compressed natural gas or liquefied natural gas tax, meaning that hospitals are also exempt as entities operated by the county.
House Bill 2731 would apply the same exemptions to nonprofit ambulances operated by nonprofit entities that organized for the sole purpose of and that engage exclusively in providing emergency medical services and that use the gasoline exclusively to provide emergency medical services, including rescue and ambulance services, in addition to an exemption on gasoline tax and diesel tax.
House Bill 2731 would apply a tax exemption more equally by applying an exemption that exists for a service of a political subdivision to its equivalent, not-for-profit service. Additionally, this tax exemption will provide some relief to those nonprofit entities that provide emergency medical services.
Nevertheless, like any exemption for a particular group in an industry or area of business or service, this can potentially cause unintended consequences when private emergency services remain liable to pay the tax.
As a consequence of potentially good and bad provisions in the bill, we will remain neutral on House Bill 2731.