84(R) - 2015
Relating to a sales and use tax exemption for certain equipment used for digital audio broadcasting.
A fiscal note dated May 7, 2015 anticipates a negative two-year net impact to General Revenue Related Funds for CSSB 1030 of $140,000 through the biennium ending August 31, 2017.
There would be a proportional loss of sales and use tax revenue from local taxing jurisdictions as shown in the above table.
Senate Bill 1030 would amend Section 151.3185 of the Tax Code related to exemptions from the sales and use tax for property used in the production of motion pictures or video or audio recordings and broadcasts.
It would add an exemption from the sales and use tax for tangible personal property that is sold to an entity to which 47 C.F.R. Section 73.404(a) (related to licensed digital audio broadcasting stations that use the In-band On-channel system for broadcasting purposes) applies if the property is necessary to provide the broadcast service described by 47 C.F.R. Section 73.403 or 73.404.
Vote Recommendation Notes
Senate Bill 1030 would exempt from the sales tax certain tangible personal property sold to certain digital audio broadcast entities (licensed digital audio broadcasting stations that use the In-band On-channel system for broadcasting purposes) if the property is necessary to provide certain broadcast services by federal regulations.
Such specific, narrow-based exemptions usually distort the free market system by favoring a particular industry or group of businesses above others. Senate Bill 1030, by exempting certain tangible personal property sold to certain digital audio broadcast entities, could foster the transition of local radio broadcast to digital transmission. Picking winners and losers is not a proper role for a limited government. We oppose Senate Bill 1030.
It should be noted that the relatively minor fiscal note is not what is at issue; rather it is the free market principle which is still violated regardless of whether the state's tinkering with the marketplace has a minor or major fiscal cost. The accumulation of many minor preferences is equally as damaging to the economy which is why we continue to oppose even SB 1030.