Bill Caption

Relating to the permitting and taxation of certain boats and boat motors; imposing a fee.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HB 4032, As Introduced: a negative impact of ($2,316,000) through the biennium ending August 31, 2021.

Bill Analysis

HB 4032 would introduce a sales tax exemption for boats or motors if they are sold in the state for use in another state or country and are removed from the state within a certain number of days from purchase. It would also provide for a tax exemption for a boat or boat motor used in or brought into Texas for use if the boat or motor: (1) has a current certificate number issued under federal law, (2) displays an applicable temporary use permit; and (3) is removed from Texas not more than 90 days after the date the boat or motor is brought into Texas. A temporary use permit would be issued for boats or motors that qualify for the exemption, valid for 90 days for a fee of $150.

Lastly, the bill would limit the retail sales tax to be imposed on a boat or motor to not exceed $18,750. 

Vote Recommendation Notes

Texas Action opposes HB 4032 for violating the principles of limited government and free markets. Tax exemptions for specific types of products or industries represent undue government interference in the marketplace, effectively picking winners and losers. Taxes, when necessary, should be applied in a broad-based and equal manner.