84(R) - 2015
Relating to the motor vehicle sales tax applicable to motor vehicles used by transportation companies for certain purposes.
A fiscal note dated April 23, 2015 anticipates a negative two-year net impact to General Revenue Related Funds for CSSB 724 of $4,000,000 through the biennium ending August 31, 2017.
Senate Bill 724 would amend Section 152.082 of the Tax Code related to the sale of a motor vehicle to or use of a motor vehicle by a public agency. It would specify that to be exempt from motor vehicles taxes, in addition to being operated with an exempt license plate issued under Section 502.451 of the Transportation Code, a motor vehicle must be used by a public agency or a commercial transportation company to provide transportation services under a contract with the board of county school trustees or a school district board of trustees, or the governing body of an open-enrollment charter school.
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 sponsors are Representative Tom Craddick, Representative John Frullo, Representative Celia Israel, and Representative Tan Parker. Representative Dennis Bonnen is a cosponsor.
First chamber recommendation:
Senate Bill 724 would specify in statute that private school bus companies that provide transportation services under a contract with a board of county school trustees or school district board of trustees or the governing body of an open-enrollment charter school, are exempt from motor vehicles taxes.
According the statement of intent for the bill, these companies have been considered exempt for years, but a recent interpretation by the Office of the Comptroller of Public Accounts reversed the practice and imposed motor vehicles sales tax on school buses owned by these companies.
While we do not support tax exemptions for particular groups of people or businesses, in this case, the tax imposed on school buses from private companies under a contract with public schools would ultimately be passed on to school districts, hence taxpayers at large.
By exempting those private school bus companies under contract with public schools, Senate Bill 724 would protect taxpayers from ultimately paying this tax and as a consequence limit the scope of government. We support this bill.