Glenn Hegar Texas Comptroller of Public Accounts State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Glenn Hegar Texas Comptroller of Public Accounts State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Sources of Revenue Texas Comptroller of Public Accounts January 2019 ii State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Table of Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Texas Taxes and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Legislative Changes and Other Sources of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Texas Tax and Fee Profiles Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Air Pollution Control Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Beer Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Boat and Boat Motor Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Cement Production Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Cigars and Tobacco Products Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Cigarette Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 City Sales Tax Service Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Court Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Court Fines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Credit Card and Electronic Services Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Diesel Fuel Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Driver Record Information Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Driver’s License Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Driver’s License Point Surcharges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Fees - Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Franchise Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Game, Fish & Equipment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Gas, Electric & Water Utility Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Gas Utility Pipeline Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Gasoline Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 General Business Filing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Health Care Facilities Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Health Related Professional Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Higher Education Tuition Fees – Non-Pledged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Hotel Occupancy Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Insurance Maintenance Taxes — Department of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Insurance Maintenance Tax — Workers’ Compensation Division and Office of Injured Employee Counsel . . . . . 126 Insurance Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Liquor Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Lottery Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Texas Comptroller of Public Accounts – January 2019 iii Sources of Revenue Table of Contents (continued) Malt Liquor (Ale) Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Manufactured Housing Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Medical Exam & Registration Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Mixed Beverage Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Motor Vehicle Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Motor Vehicle Inspection Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Motor Vehicle Registration Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Motor Vehicle Rental Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Motor Vehicle Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Motor Vehicle Sales and Use Tax — Seller-Financed Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Natural Gas Production Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Oil Production Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Oil Well Service Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Professional Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Public Utility Gross Receipts Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Securities Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Special Vehicle Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 State Parks Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Teacher Certification Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Waste Disposal Facilities, Generators & Transporters Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Waste Treatment Inspection Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Wine Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Appendices A Tax and Other Revenue Collections, 1972-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 C Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base . . . . . . . . . . . . . . . . . . . . . . . . . . 187 B Changes in Major Texas Tax Rates, Fiscal 1930-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 D-1 State Tax Comparisons for 2017, Ranked by Per Capita Tax Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 D-2 State Tax Rate Comparisons as of October 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 D-3 State Corporate Business Tax Comparisons as of January 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 E State Professional Fees Detail as of Fiscal 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 G State Tax Collections and Personal Income, Fiscal 1972-2018, Average Annual Growth Rates by Period . . . . . . . 253 F Summary of Changes, Major Texas Insurance Premium Tax Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Texas Comptroller of Public Accounts – January 2019 iv Sources of Revenue Table of Contents (concluded) List of Tables Table 1: Tax Rates and Bases for Texas State Taxes, Fiscal 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Table 2: Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 . . . . . . . . . . . . . 6 Table 3: State Tax Collections Average Annual Growth Rates for Selected Periods, Fiscal 1972-2018 . . . . . . . . . . . . . 20 Table 4: State Fees By Receipt Category. A Historical Perspective Every 10 Years With Base Year and Last Completed Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 List of Charts Chart 1: Fiscal 1972 Total State Tax Revenue by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Chart 2: Fiscal 2018 Total State Tax Revenue by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Chart 3: Fiscal 1972 State Fee Revenue by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Chart 4: Fiscal 2018 State Fee Revenue by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Texas Comptroller of Public Accounts – January 2019 v Sources of Revenue Texas Comptroller of Public Accounts January 2019 vi State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Introduction This publication updates Sources of Revenue, last issued the economy fluctuated, with some tax relief coming during a guide to the history and current status of Texas state rev- ring in 1984, 1986 and 1991. After 1991, however, tax-re- by the Comptroller in January 2017, and is intended to be enue sources. In an effort to provide the deepest historical perspective based on the most reliable and consistent data, the report uses the year 1972 as the starting point for tracking state revenue collections, as well as the legislative and economic changes affecting them. In public policy matters, the methods by which gov- ernments raise revenue always seem to take center stage. It is hoped that this update will continue to serve as a quick stop for policymakers, staff and other readers for general information about Texas revenue sources. In addition to summarizing over 40 years of tax and revenue legislation, the report’s profile pages provide legal citations, revenue history, rates and bases for specific revenue sources and the oil boom of the late 1970s and major tax increases occur- lated bills have almost exclusively reduced state taxes, the exception being 2006 when state taxes were increased to pay for local property tax relief. Over time, bills have includ- ed rate increases and decreases; base changes that either broadened or narrowed the tax base; due-date speed-ups and delays; and new levies and repeals. This report supplies a detailed history of state tax and fee legislation from 1972 through 2018 as well as revenue from the levies, along with other useful information for those wanting to learn more about these revenue sources. (Unless otherwise noted, all annual data refer to state fiscal years, which run from Sept. 1 through Aug. 31.) The report, aside from the tax and fee profiles, includes other information that will give the reader a general idea of three sections, nine appendices, four tables and four charts. Taxes have a special place in the discussion because and terms employed. Following the introduction, Table 1 a revenue source’s place in the overall system. of their inherent unpopularity, but in recent years greater attention has turned to fees and debt as alternate methods of paying for government services. This report covers state taxes and fees as distinct from debt, which the Comptroller’s This section, the introduction, discusses the methodology identifies all major taxes collected by the state of Texas (as well as taxes abolished since 1972.) Table 2 then lists the major tax and related revenue bills enacted since 1972. The second section identifies and reviews each of the office has covered in detail in other publications. Taxes and major taxes and fees collected in Texas, and the third section businesses as they participate in the economy. In covering state tax and fee revenues from 1972 through 2018. A fourth fees are sources of current revenue drawn from citizens and sources of Texas state revenue, the report excludes the property tax, which is levied exclusively by units of local government. Since 1972, the Legislature has enacted hundreds of bills directly affecting tax and fee revenue (see Table 2). Prior to 1991, legislation both raised and lowered taxes as identifies and tracks legislative and other changes affecting section—the core of Sources of Revenue—presents individ- ual profiles of the state’s major taxes and fees. Each profile provides details concerning statutory authority, enactment and administration, and a history of collections and rate changes. Texas Comptroller of Public Accounts – January 2019 1 Sources of Revenue Appendix A describes total tax and fee collections, Finally, Appendix G provides graphic depictions of percent change and average annual growth rates. Appen- average annual growth rates for major tax categories during major taxes from 1930 through 2018. Appendix C provides era of vigorous economic growth, when virtually no tax leg- dix B provides a year-by-year history of state tax rates for a detailed history of the legislative changes involving the state’s principal revenue source, the Sales and Use tax, beginning with its inception in 1961. Appendices D-1 through D-3 provide interstate comparisons of tax rates and relative state rankings for major state taxes. Appendix E lists the state’s various professional fees and provides details including a description of each fee, year of enactment and legal citation. Appendix F provides a history of Insurance Premium tax rate changes. seven periods in the state’s recent tax history: 1972-83, an islation was deemed necessary; 1983-92, an era of economic turmoil and numerous tax increases; 1992-01, an era of sustained economic growth with an emphasis on tax relief; 2001-03, a brief period of economic downturn; 2003-08, a period of strong economic and revenue growth; 2008-10, years affected by the Great Recession; and 2010-18, the most recent period. This informational report is intended to provide sum- mary descriptions of the state’s major taxes, fees and associated legislation. These descriptions should be used as guidelines only; actual taxability and official tax policy are determined by the Tax Code and administrative rules. µ Texas Comptroller of Public Accounts – January 2019 2 Sources of Revenue TABLE 1 Tax Rates and Bases for Texas State Taxes Fiscal 2018 Tax Beer Tax Boat and Boat Motor Sales and Use Tax Rate and Base $6 per 31-gallon barrel (19.4 cents per gallon) 6.25 percent on the sale of a taxable boat or boat motor $15 for each boat or boat motor brought into the state by a new resident Cement Production Tax 2.75 cents on the first intrastate distribution, sale, or use of each 100 pounds or fraction of 100 pounds of cement Cigars and Tobacco Products Tax 1 cent per 10 cigars or portion of 10 cigars weighing 3 pounds or less per thousand; $7.50 per 1,000 cigars weighing more than 3 pounds per thousand with a factory list price of not more than 3.3 cents each; $11 per 1,000 cigars weighing more than 3 pounds per thousand with a factory list price of more than 3.3 cents each and containing no substantial amounts of non-tobacco ingredients; $15 per 1,000 cigars weighing more than 3 pounds per thousand with a factory list price of more than 3.3 cents each and containing substantial amounts of non-tobacco ingredients; $1.22 per ounce and a proportionate rate on all fractional parts of an ounce for chewing, pipe or roll-your-own tobacco, and snuff, with the tax imposed on a can or package weighing less than 1.2 ounces equal to the amount of the tax imposed on a can or package weighing 1.2 ounces Cigarette Tax $70.50 per 1,000 cigarettes weighing 3 pounds or less per thousand ($1.41 per pack of 20); $72.60 per 1,000 weighing more than 3 pounds per thousand Coin-Operated Amusement Machine Tax Combative Sports Admissions Tax Diesel Fuel Tax $60 per coin-operated amusement machine per year 3.0 percent on the gross receipts from event admissions plus 3.0 percent of gross receipts from the sale of broadcast rights or $30,000, whichever is less 20 cents per gallon of diesel fuel Franchise Tax Corporations and limited liability companies, partnerships, trusts and other business forms subject to the tax pay a rate of 0.75 percent of a firm’s Texas-apportioned margin. The term “margin” is defined as total revenue less the greater of: cost of goods sold, total compensation, 30 percent of total revenue or $1 million. A rate of 0.375 percent applies to businesses in retail and wholesale trade. A rate of 0.331 percent applies to entities with $20 million or less in total (unapportioned) revenue and electing to use the E-Z computation Gas, Electric and Water Utility Tax 0.581 percent on utility gross receipts from services to incorporated cities and towns with 1,001 to 2,499 people; 1.070 percent on services to cities with 2,500 to 9,999 people; 1.997 percent on services to cities with 10,000 people or more Gas Utility Pipeline Tax 0.5 percent of the gross gas utility receipts less the cost of gas sold Gasoline Tax Hotel Occupancy Tax Insurance Maintenance Taxes Insurance Premium Tax (Accident and Health Insurance) Insurance Premium Tax (Life Insurance and Health Maintenance Organizations) 20 cents per gallon of gasoline 6.0 percent of the price paid for a room by occupant Varying rates on gross premiums for different types of coverage, set annually by the Texas Department of Insurance to cover regulatory costs 1.75 percent of taxable gross premiums 0.875 percent of the first $450,000 in taxable gross premiums or HMO taxable gross revenues, and 1.75 percent of taxable gross premiums or HMO taxable gross revenues in excess of $450,000 Continued on the following page Texas Comptroller of Public Accounts – January 2019 3 Sources of Revenue TABLE 1 (continued) Tax Rates and Bases for Texas State Taxes Fiscal 2018 Tax Insurance Premium Tax (Licensed Captive Insurers) Insurance Premium Tax (Property and Casualty Insurance) Rate and Base 0.5 percent of taxable premium receipts. Minimum annual due $7,500; maximum $200,000 1.6 percent of taxable premium receipts Insurance Premium Tax (Title Insurance) 1.35 percent of taxable premiums Insurance Premium Tax (Unauthorized, Independently Procured, and Surplus Lines) 4.85 percent of taxable premiums Compressed Natural Gas and Liquefied Natural Gas Tax 15 cents per gallon of compressed natural gas (CNG) and liquefied natural gas (LNG) Liquor Tax Malt Liquor (Ale) Tax Manufactured Housing Sales and Use Tax Mixed Beverage Gross Receipts Tax Mixed Beverage Sales Tax $2.40 per gallon 19.8 cents per gallon 5.0 percent of 65 percent or 0.0325 of the sales price to be paid on the initial sale or use in this state of a new manufactured home 6.7 percent of the gross receipts from alcoholic beverage sales (eff. 1/1/14); 14.0 percent of the gross receipts from alcoholic beverage sales (prior to 1/1/14) 8.25 percent on the sale of alcoholic beverages (eff. 1/1/14) Motor Vehicle Rental Tax 10.0 percent of the gross receipts on rentals of 30 days or less; 6.25 percent on rentals of 31 to 180 days Motor Vehicle Sales and Use Tax 6.25 percent of vehicle sales price, less the value of the trade-in; $90 tax for a motor vehicle brought into the state by a new resident; $10 tax paid by donee per motor vehicle gifted; $5 tax paid by each party in an even exchange; 1 percent or 2.5 percent Texas Emissions Reduction Plan (TERP) surcharge on certain on-road diesel truck purchases Motor Vehicle Sales and Use Tax—Seller-Financed Motor Vehicles 6.25 percent of seller’s receipts; 1 percent or 2.5 percent TERP surcharge on certain on-road diesel truck purchases Natural Gas Production Tax 7.5 percent of the market value of gas produced in the state; condensate 4.6 percent Oil Production Tax 4.6 percent of the market value of oil produced in the state Oil Well Service Tax 2.42 percent of the gross receipts for specific services to oil and gas wells Public Utility Gross Receipts Assessment Sales and Use Tax Wine Tax 1/6 of 1.0 percent of gross receipts 6.25 percent of the purchase price of taxable tangible personal property and selected services; 1.5 percent TERP surcharge on the sale, lease or rental of off-road, heavy-duty diesel equipment (other than some used in agriculture) 20.4 cents per gallon for alcoholic volume not over 14 percent; 40.8 cents per gallon for alcoholic volume over 14 percent; 51.6 cents per gallon for sparkling wine Concluded on the following page Texas Comptroller of Public Accounts – January 2019 4 Sources of Revenue TABLE 1 (concluded) Taxes Repealed or Abolished Since 1972 Year Repealed Tax 1976 Express Company Tax 1982 State Ad Valorem Tax 1983 Occupation Tax on Pistol Dealers 1983 Occupation Tax on Billiard Table Owners or Operators 1983 Occupation Tax on Quotation Services 1983 Occupation Tax on Ship Brokers 1983 Occupation Tax on Brokers and Factors 1985 Car Company Tax 1985 Telegraph Tax 1988 Telephone Company Tax 1993 Bingo Gross Receipts Tax 1997 Bedding Stamp Tax 1997 Interstate Motor Carrier Sales and Use Tax 2015 Airline/Passenger Train Beverage Tax 2015 Attorney Occupation Tax 2015 Bingo Rental Tax 2015 Controlled Substances Tax 2015 Fireworks Tax 2015 Inheritance Tax 2015 Liquefied Gas Tax 2015 Oil Regulation Tax 2015 Sulphur Production Tax Texas Comptroller of Public Accounts – January 2019 5 Sources of Revenue TABLE 2 Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number 62nd Legislature 1971 1972 Effect Session Dates 62nd Legislature, Regular Session . . 62nd Legislature, 1st Called Session . 62nd Legislature, 2nd Called Session . 62nd Legislature, 3rd Called Session . 62nd Legislature, 4th Called Session . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 12—May 31, 1971 June 1—June 4, 1971 March 28—March 30, 1972 June 14—July 7, 1972 September 18—October 17, 1972 63rd Legislature 1973 63rd Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 9—May 28, 1973 63rd Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . December 18—December 20, 1973 64th Legislature 1975 64th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 14—June 2, 1975 HB 546 Express Company tax abolished; Cigar tax reduced; Franchise tax base reduced and surtax eliminated HB 819 Public Utility Gross Receipts assessment enacted SB 28 Insurance Maintenance tax (prepaid legal services) enacted SB 180 Insurance Maintenance tax (HMOs) enacted 65th Legislature 1977 1978 65th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 11—May 30, 1977 HB 1484 Cigar tax reduced HB 1537 Motor Vehicle Certificate of Title fees increased SB 1302 Motor Vehicle Inspection fee increased 65th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . July 11—July 21, 1977 65th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . July 10—August 8, 1978 HB 1 Sales and Use and Inheritance tax relief HJR 1 State Property tax relief 66th Legislature 1979 66th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 9—May 28, 1979 HB 726 Air Pollution Control fees enacted HB 1297 Insurance Maintenance tax (aircraft) enacted SB 43 Motor Vehicle Inspection fee increased SB 747 Insurance Maintenance tax (HMOs) removed 67th Legislature 1981 1982 67th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . HB 325 Inheritance tax relief HB 903 Manufactured Housing Sales and Use tax separated from Motor Vehicle Sales and Use tax HB 917 Interstate Motor Carrier tax separated from Motor Vehicle Sales and Use tax HB 1708 Diesel Fuel and Gasoline tax rate reduction for certain transit companies HB 2014 Insurance Premium tax simplification 67th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . 67th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . HJR 1 State Property tax abolished 67th Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . January 13—June 1, 1981 July 13—August 11, 1981 May 24—May 28, 1982 September 7—September 9, 1982 Texas Comptroller of Public Accounts – January 2019 6 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 68th Legislature 1983 1984 68th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 11—May 30, 1983 HB 1122 Occupation taxes on pistol dealers, quotation services, billiard table owners or operators, ship brokers, and brokers and factors abolished HB 2108 Cigarette tax speed-up SB 288 Motor Vehicle Certificate of Title and Driver License fees increased SB 444 Motor Vehicle Inspection fee increased SB 713 Motor Vehicle Sales and Use tax speed-up SB 985 Sales and Use tax speed-up SB 986 Public Utility Gross Receipts assessment speed-up SB 987 Insurance Premium tax speed-up SB 988 Oil Production, Natural Gas, and Motor Fuel tax speed-up 68th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . June 22—June 25, 1983 68th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . June 4—July 3, 1984 HB 122 Omnibus tax bill: Sales and Use, Motor Vehicle Sales and Use, Motor Fuel, Hotel Occupancy, Cigarette and Tobacco, Alcoholic Beverage, and Franchise taxes increased; Sales and Use tax base broadened; Insurance Premium tax prepayment schedule adopted; Motor Vehicle Registration fees increased; Higher Education tuition fees increased for non-resident and foreign students; other measures 69th Legislature 1985 1986 69th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 8—May 27, 1985 HB 1132 Airline Beverage tax extended to passenger trains HB 1593 Omnibus tuition and fee bill: Higher Education tuition fees and other fees increased HB 1949 Sales and Use tax expanded to include telephone communication services (from Telephone Company tax); Telegraph tax repealed HB 2359 Waste Disposal Facilities, Generators and Transporters fees enacted SB 237 Car Company tax repealed 69th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . May 28—May 30, 1985 69th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . August 6—September 4, 1986 69th Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . September 8—September 30, 1986 HB 79 Sales and Use and Motor Fuel taxes increased (temporary) 70th Legislature 1987 70th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 13—June 1, 1987 HB 1123 Airline/Passenger Train Beverage tax extended to limousines HB 1610 Motor Vehicle Inspection fee increased HB 2022 Insurance Maintenance tax (life, accident and health) enacted; Insurance Maintenance tax (HMOs) re-enacted SB 229 Public Utility Gross Receipts assessment base expanded SB 873 Insurance Premium tax (title) separated from Insurance Premium tax (property and casualty) 70th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . June 2—June 3, 1987 SB 2 Office of Public Insurance Counsel (OPIC) assessment enacted 70th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . June 22—July 20, 1987 HB 61 Omnibus tax bill: Sales and Use, Motor Vehicle Sales and Use, Hotel Occupancy, and Cigarette and Tobacco taxes increased; Sales and Use tax base broadened; Insurance Premium tax (Administrative Services) enacted; Franchise and Insurance Premium surtaxes enacted (temporary); Professional fees increased (temporary); Attorney Licensure tax (temporary) enacted; Telephone Company tax repealed; other measures Texas Comptroller of Public Accounts – January 2019 7 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 70th Legislature (concluded) HB 62 HB 170 Motor Fuel tax increase (temporary) made permanent Insurance Maintenance tax (third party administrators) enacted 71st Legislature 1989 1990 71st Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . .January 10—May 29, 1989 HB 24 Controlled Substances tax enacted HB 112 Sales and Use tax exemption for machinery and equipment speed-up HB 174 Public Utility Gross Receipts assessment base expanded HB 428 Oil Production tax reduction for certain Enhanced Oil Recovery (EOR) production HB 1306 Franchise tax fix HB 1421 Insurance Premium tax (property and casualty) fix HB 1494 Motor Vehicle Inspection fee increased HB 1935 Motor Vehicle Driver License fee increased HB 1954 Insurance Premium tax (life, accident and health) fix HB 2619 Cigarette tax speed-up HB 2945 Gas Utility Pipeline tax fix SB 963 Natural Gas Production tax exemption for high-cost gas SB 1573 Taxes paid under protest deposited into General Revenue 71st Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . June 20—July 19, 1989 HB 40 Oil Production tax reduction for EOR projects accelerated 71st Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . November 14—December 12, 1989 SB 1 Insurance Maintenance tax (Research and Oversight Council on Workers’ Compensation) enacted 71st Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . February 27—March 28, 1990 71st Legislature, 4th Called Session . . . . . . . . . . . . . . . . . . . . . . April 2—May 1, 1990 71st Legislature, 5th Called Session . . . . . . . . . . . . . . . . . . . . . . May 2—May 30, 1990 71st Legislature, 6th Called Session . . . . . . . . . . . . . . . . . . . . . . June 4—June 7, 1990 HB 4 Motor Vehicle Driver License fees increased HB 5 Transportation fees increased HB 6 Sales and Use, Tobacco, and Mixed Beverage taxes increased 72nd Legislature 1991 72nd Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 8—May 27, 1991 HB 2 Insurance Premium tax credits reduced; OPIC assessment expanded to life, accident and health insurance HB 278 Franchise tax expanded to include limited liability companies HB 640 Automobile Theft Prevention Authority fee enacted HB 651 Hotel Occupancy tax exemptions tightened HB 1986 Battery Sales fee enacted SB 14 Coastal Protection fee enacted SB 1105 Oil Production tax rate reduction for EOR projects 72nd Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . July 15—August 13, 1991 HB 11 Omnibus tax bill: Sales and Use tax base broadened; Motor Vehicle Sales and Use and Rental taxes increased; Bingo Gross Receipts tax increased; Franchise tax revamped; Boat and Boat Motor Sales and Use tax separated from Sales and Use tax; Attorney Occupation tax, Bingo Rental tax, and Bingo Prize fee enacted; Professional, Court Cost, General Business Filing, and other fees increased HB 54 State Lottery enacted SB 2 Motor Vehicle Inspection fee increased SB 3 Fiscal Management reform; Motor Vehicle Certificate of Title fee increased 72nd Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . August 19—August 25, 1991 HB 62 Insurance Maintenance tax surcharge (Workers’ Compensation Insurance Fund) enacted Texas Comptroller of Public Accounts – January 2019 8 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 72nd Legislature (concluded) 1992 72nd Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . January 2—January 8, 1992 72nd Legislature, 4th Called Session . . . . . . . . . . . . . . . . . . . . . . November 10—December 3, 1992 73rd Legislature 1993 73rd Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 12—May 31, 1993 HB 563 Manufactured Housing Sales and Use tax tightened HB 958 Insurance Premium tax (surplus lines) rate increased HB 995 Motor Vehicle Sales and Use tax—Seller-Financed Motor Vehicles separated from Motor Vehicle Sales and Use tax HB 1445 Airline/Passenger Train Beverage tax base narrowed HB 1461 Insurance Premium tax speed-up and transfer of administration to the Comptroller of Public Accounts HB 1718 Franchise tax credit enacted for wages paid to certain inmates and former inmates HB 1970 Boat and Boat Motor Sales and Use tax base expanded HB 1974 Oil Production and Natural Gas Production tax credits for new field discovery wells HB 1975 Oil Production and Natural Gas Production tax exemptions for three-year inactive wells HB 2723 Oil Production tax cut and Natural Gas Production tax exemption for co-production high-cost gas projects HB 2771 Bingo Gross Receipts tax abolished; Bingo Prize fee increased SB 82 Sales and Use, Franchise, and Hotel Occupancy tax speed-ups; general tax refund for certain wages paid to individuals receiving state assistance SB 83 Public Utility Gross Receipts assessment speed-up SB 466 Oil Production tax reduction for certain EOR projects SB 926 Motor Vehicle Inspection fee increased 74th Legislature 1995 74th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 10—May 29, 1995 HB 327 Franchise tax credit for certain wages paid to juveniles committed to the Texas Youth Commission HB 398 Natural Gas Production tax high-cost gas program extended and modified to provide a rate reduction for high-cost gas HB 462 Sales and Use tax extended to inmate purchases HB 1089 Insurance Maintenance tax (Workers’ Compensation Commission) base expanded HB 2065 Sales and Use tax refund for certain equipment or machinery sales related to enterprise zone projects HB 2128 Public Utility Gross Receipts assessment speed-up extended; Telecommunications Infrastructure Fund assessment enacted HB 2129 Hotel Occupancy tax base expanded SB 3 Interstate Motor Carrier tax repealed SB 60 Concealed Handgun fees enacted SB 345 Franchise and Sales and Use tax refunds for school district taxes paid for certain property SB 401 Comptroller given increased enforcement capabilities 75th Legislature 1997 75th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 14—June 2, 1997 HB 4 School Property tax homestead exemption increased to $15,000 from $5,000 Texas Comptroller of Public Accounts – January 2019 9 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 75th Legislature (concluded) HB 966 HB 1200 HB 1387 HB 1855 SB 126 SB 226 SB 249 SB 385 SB 582 SB 862 SB 1440 Boat and Boat Motor Sales and Use tax base expanded Motor Vehicle Driver License term extended and fee increased correspondingly Automobile Theft Prevention Authority fee speed-up Sales and Use tax exemption for manufacturing property clarified Oil Production and Natural Gas Production tax exemption for two-year inactive wells Sales and Use tax refunds for certain expenditures related to defense economic readjustment zones Telecommunications Infrastructure Fund assessment set at a fixed rate OPIC assessment rate increased for life, accident and health insurance Oil Production tax EOR exemption application period extended Natural Gas Production tax high-cost certification process eased Oil Production and Natural Gas Production tax cut for incremental production from improved oil wells; Natural Gas Production tax exemption for certain vented casinghead gas 76th Legislature 1999 76th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 12—May 31, 1999 HB 1014 Hotel Occupancy tax exemption for institutions of higher education tightened HB 1837 Insurance Premium tax (property and casualty; title) rate schedules changed to flat rates HB 2615 Natural Gas Production tax two-year inactive well exemption and highcost gas rate reduction programs extended HB 2816 Petroleum Product Delivery fee rates reduced HB 3159 Diesel Fuel tax exemption for commercial passenger vehicles operating on fixed routes HB 3697 Insurance Maintenance tax surcharge (Workers’ Compensation Insurance Fund) and tax credit repealed SB 4 School Property tax relief SB 7 System Benefit Fund fee enacted SB 290 Oil Production and Natural Gas Production tax exemption (temporary) for certain wells under certain market conditions SB 329 Oil Production, Natural Gas, Diesel Fuel, and Gasoline prepayment/ payment speed-up eliminated SB 441 Sales and Use tax clothing holiday and exemptions for over-the- counter drugs and Internet access enacted; Franchise tax exemptions for certain small businesses enacted; various Franchise tax credits enacted SB 530 Insurance Premium tax (life, accident and health) exemption for employee coverage at certain public hospitals SB977 Sales and Use and Motor Vehicle Sales and Use tax exemptions for certain items used in timber production 77th Legislature 2001 77th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 9—May 28, 2001 HB 1200 Local-option School Property tax relief for corporations creating new jobs and making certain investments HB 2604 Volunteer Fire Department Assistance Fund assessment enacted HB 2687 Petroleum Product Delivery fee reinstated HB 3667 Fireworks tax enacted Texas Comptroller of Public Accounts – January 2019 10 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 77th Legislature (concluded) SB 2 SB 5 SB 63 SB 317 SB 601 SB 1839 Omnibus water bill: Sales and Use tax exemptions for certain watersupply and sewer-service corporations and for certain water and wastewater equipment Omnibus air quality bill: Special fee for truck trailers and commercial vehicles, commercial motor vehicle inspection fee, surcharge on new or used diesel construction equipment, and special fee on certain vintage on-road diesel motor vehicles enacted; registration fee on vehicles registering in-state for the first time increased; Diesel Fuel tax exemption for certain components of the final product; and created the Texas Emissions Reduction Plan fund Franchise tax credit for wages paid to persons with certain disabilities Exempts sales-leaseback transactions under the Finance Code from Sales and Use tax Insurance Premium tax credit for certain investments in certified capital companies (to be implemented only upon the Comptroller’s certification of available revenues) Nursing Home Stabilization Reserve Fund Bond Debt Service Maintenance tax surcharge enacted 78th Legislature 2003 2004 78th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 14—June 2, 2003 HB 1365 Omnibus air quality bill: Off-road heavy-duty diesel Sales and Use tax surcharge increased and broadened; large on-road diesel Motor Vehicle Sales and Use tax surcharge extended; Motor Vehicle Certificate of Title renewal fees increased HB 2292 Insurance Premium and Maintenance tax bases broadened to include certain CHIP and Medicaid premiums and revenues HB 2424 Natural Gas Production tax high-cost gas program made permanent; Oil Production tax EOR program made permanent HB 2425 Natural Gas Production tax high-cost gas program filing requirements tightened; Insurance Premium tax credit for certain investments in certified capital companies program re-enacted; various Sales and Use tax administration issues clarified HB 2458 Motor Fuel tax collection moved to the terminal rack from the motor fuel wholesalers HB 3459 Telecommunications Infrastructure Fund assessment extended 78th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . June 30—July 28, 2003 78th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . July 28—August 26, 2003 78th Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . September 15—October 12, 2003 78th Legislature, 4th Called Session . . . . . . . . . . . . . . . . . . . . . . April 20—May 17, 2004 79th Legislature 2005 79th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 11—May 30, 2005 HB 2161 Various Natural Gas and Oil Production tax incentives for low- producing and orphaned wells and the installation of enhanced energy efficient equipment HB 2201 Provided jurisdictional oversight to certain Texas regulatory agencies regarding carbon dioxide injection associated with the Department of Energy’s FutureGen Project; extends the current appraisal value limitation to include such projects; allows corporations to deduct certain costs of equipment used in such projects HB 2481 Extended the motor vehicle-related surcharges funding the Texas Emissions Reduction Plan (TERP) Texas Comptroller of Public Accounts – January 2019 11 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 79th Legislature (concluded) 2006 HB 2883 SB 796 SB 1863 Insurance Premium tax (Life, Accident and Health) credits increased Boxing Admissions tax revamped and renamed “Combative Sports tax.” Petroleum Products Delivery fee reduction for 2006-07 rescinded; Coastal Protection fee reduced; Telecommunications Infrastructure Fund assessment extended 79th Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . June 21—July 20, 2005 79th Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . July 21—August 19, 2005 79th Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . April 17—May 16, 2006 HB1 Established procedures to phase down average School Property tax rates to $1.00 per $100 valuation via dedication of certain additional Franchise, Cigarette, Tobacco Products, and Motor Vehicle Sales tax revenues HB 2 Created the Property Tax Relief Fund HB 3 Franchise tax restructured HB 4 Motor Vehicle Sales tax computation for private-party sales of used motor vehicles revised HB 5 Cigarette and Tobacco Products tax rates increased 80th Legislature 2007 80th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 9—May 28, 2007 HB 735 Telecommunications Infrastructure Fund assessment repealed HB 1332 Refund or credit for Diesel Fuel tax used in manufacturing or as a feedstock HB 1459 Sales and Use tax exemption for coin operated pay phones HB 1741 Insurance Premium tax credit for certain investments in certified capital companies renewed for a second round of investments and credits HB 1751 Sexually-Oriented Business Admissions fee enacted HB 1849 Life Insurance Valuation fee and corresponding Insurance Premium tax credit repealed HB 2982 Natural Gas and Oil Production tax credit for qualifying low- production leases expiration date repealed HB 3314 Oil Production tax credit for enhanced efficiency equipment ending date extended; allowed a Diesel Fuel, Gasoline, and Liquefied Gas credit or refund for certain metropolitan rapid transit authorities HB 3315 Volunteer Fire Department Assistance Fund assessment increased and ending date repealed HB 3319 Sales and Use tax holiday on clothing and footwear expanded to include backpacks; Motor Vehicle Sales and Use tax exemption provided for certain hydrogen power-capable vehicles; removed limitations from the Sales tax exemption for pharmaceutical biotechnology cleanrooms; excluded services performed by a “landman” from the definition of a real property service HB 3554 Petroleum Products Delivery fee extended at a reduced rate HB 3693 Sales tax holiday for certain energy efficient products HB 3694 Provided a Franchise tax credit for certain capital investments in qualifying enterprise projects and a Sales and Use tax refund for purchases used at a qualified business site in an enterprise zone HB 3732 provided an Oil Production tax exemption for enhanced energy recovery projects using anthropogenic carbon dioxide HB 3928 Franchise tax revised to exempt taxable entities with revenues of $300,000 or less and to provide tax discounts based on increments of total revenue less than $900,000 SB 12 Extended the motor vehicle-related surcharges funding the Texas Emissions Reduction Plan (TERP) Texas Comptroller of Public Accounts – January 2019 12 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 81st Legislature 2009 81st Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 13—June 1, 2009 HB 469 Provided Franchise tax credits, Sales and Use tax exemptions, and Property tax abatements for certain clean energy projects HB 1796 Extended the motor vehicle-related surcharges funding the Texas Emissions Reduction Plan (TERP) HB 1801 Sales and Use tax holiday on clothing and footwear expanded to certain school supplies HB 2154 Change taxation of Tobacco Products from a value-based to a weight- based tax HB 3433 Revised process for registering certain commercial motor vehicle fleets HB 4409 Eliminated Insurance Premium tax credits for Texas Windstorm Insurance Association (TWIA) assessments HB 4765 Increased the total revenue amount at which a taxable entity would owe no Franchise tax to $1million from $300,000 SB 254 Volunteer fire departments exempted from Gasoline and Diesel Fuel taxes SB 958 Sales and Use tax exemption created for machinery and equipment used in an agricultural aircraft operation 81st Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . July 1—July 2, 2009 82nd Legislature 2011 82nd Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 11—May 30, 2011 HB 1 Directed the Comptroller to conduct a limited-duration tax amnesty program to encourage voluntary tax reporting by businesses HB 1541 Increased the Automobile Burglary and Theft Protection fee HB 2694 Reauthorized Petroleum Product Delivery fee SB 776 Revised the procedures for licensed customs brokers, and increased the charge for an export stamp 82nd Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . May 31—June 29, 2011 SB 1 Fiscal management bill: accelerated collections from the Sales, Gasoline, Diesel Fuel, Cigarette, and Alcoholic Beverage taxes at the end of fiscal 2013; temporarily disallowed certain Insurance Premium tax credits; repealed Sales and Franchise tax refunds for School Property taxes paid in reinvestment zones; lowered the cigarette distributor stamping allowance; assessed a penalty for late report filing on payers of certain taxes and fees; and extended the $1 million total revenue threshold for Franchise tax liability. 83rd Legislature 2013 83rd Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 8—May 27, 2013 HB 7 Directed the Comptroller to collect a Volunteer Fire Department Assistance Fund assessment. HB 500 Temporarily reduced Franchise tax rates; provided an additional margin calculation of total revenue minus $1 million; added exclusions and modified certain tax components affecting tax calculation for certain entities; added a tax credit for rehabilitation of certified historic structures. HB 800 Provided a Franchise tax credit for certain research and development activities. HB 2148 Imposed a $0.15 per gallon tax on certain sales of compressed natural gas (CNG) and liquefied natural gas (LNG). HB 2446 Amended Franchise tax provisions relating to clean energy projects. HB 2451 Amended Franchise tax provisions relating to agricultural aircraft operations. HB 2766 Franchise tax was amended to clarify treatment of certain flow-through funds mandated by contract or subcontract. HB 3086 Relating to the Diesel Fuel tax and biodiesel. Texas Comptroller of Public Accounts – January 2019 13 Sources of Revenue TABLE 2 (continued) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 83rd Legislature (concluded) HB 3572 Lowered the Mixed Beverage Gross Receipts tax from 14 percent to 6.7 percent and imposed an 8.25 percent Mixed Beverage Sales tax. SB 559 Repealed provisions of SB 1, 82nd Legislature, First Called Session, that accelerated collections from the Sales, Gasoline, Diesel Fuel, Cigarette, and Alcoholic Beverage taxes and the payment of Lottery funds to the Foundation School Fund at the end of fiscal year 2013. SB 734 Allowed licensing of domestic captive insurance companies. SB 905 Distiller’s and rectifier’s permittees allowed to sell distilled spirits for onand off-premises consumption and added the permittees to the definition of a mixed beverage permit. 83rd Legislature, 1st Called Session . . . . . . . . . . . . . . . . . . . . . . May 27—June 25, 2013 83rd Legislature, 2nd Called Session . . . . . . . . . . . . . . . . . . . . . . July 1—July 30, 2013 83rd Legislature, 3rd Called Session . . . . . . . . . . . . . . . . . . . . . . July 30—August 5, 2013 SJR 1 Directed up to one-half of revenue associated with Crude Oil and Natural Gas tax collections, previously dedicated to the Economic Stabilization Fund (ESF), be deposited to the credit of the State Highway Fund; remainder would continue to be deposited to the ESF. 84th Legislature 2015 84th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 13—June 1, 2015 HB 7 Repealed the Attorney Occupation tax; as well as the additional $200 surcharge on selected professional license fees, such as paid by dentists, engineers, accountants, architects, psychologists, veterinarians, and physicians. HB 32 Reduced Franchise tax rates by one-quarter. HB 1905 Repealed three taxes entirely: the Bingo Rental tax, the Airline/Passenger Train Beverage tax, and the Controlled Substances tax. Also repealed the tax on liquefied gas (including liquefied petroleum gas) as a motor fuel; compressed and liquefied natural gas as motor fuels remained taxable. Motor Fuel tax exemptions, varying in scope, for: certain nonprofits, municipalities, and transit authorities. HB 2358 Exempted out-of-state businesses operating in Texas solely for work related to disasters and/or emergencies from taxation, including Sales and Use and Franchise tax. HB 2712 Provided enhanced Sales and Use tax exemptions with respect to large data centers. HB 2896 Amended Franchise tax regarding apportionment of receipts to Texas of broadcasting businesses. SJR 5 Amended the Texas constitution to annually transfer Sales and Use tax collections, above a certain amount and not to exceed $2.5 billion, to the State Highway Fund beginning in 2018. A similar dedication of Motor Vehicle Sales and Use tax would begin in 2020. Both dedications expire, unless continued by a vote of the Legislature. SB 724 Exempted certain school buses from the Motor Vehicle Sales and Use tax. SB 752 Repealed the state Inheritance tax. SB 755 Exempted from Sales and Use tax, as a sale for resale, certain sales of computer programs to providers of Internet hosting services. SB 757 Repealed the Crude Oil Regulatory tax and the Sulphur Production tax. SB 761 Repealed the 2 percent Fireworks tax. The retail sale of fireworks would continue to be taxable under the Sales and Use tax. SB 904 Added three-day annual Sales and Use tax holiday for emergency preparation items. SB 1049 Exempted new veteran-owned businesses from Franchise tax for their first five years. SB 1356 Added new three-day Sales and Use tax holiday for certain water-conserving products. SB 1396 Added new Tax Code chapter, and amended the Sales and Use tax, to clarify the taxation of aircraft. Texas Comptroller of Public Accounts – January 2019 14 Sources of Revenue TABLE 2 (concluded) Legislative Sessions and Associated Major Tax, Fee and Revenue-Related Bills, 1971-2017 Session/ Year Bill Number Effect Session Dates 85th Legislature 2017 85th Legislature, Regular Session . . . . . . . . . . . . . . . . . . . . . . . January 10—May 29, 2017 HB 897 Expanded Motor Vehicle Sales and Use tax exemption for churches and religious societies; exempted motor vehicles purchased by open enrollment charter schools from Motor Vehicle Sales and Use tax and Motor Vehicle Registration fees HB 1003 Authorized certain entities not subject to Franchise tax to accrue and sell tax credits related to the rehabilitation of a historic structure HB 2445 Additional cities were made eligible to receive rebates of state and local taxes paid or collected by a qualified hotel project HB 3101 Allowed the sale of alcoholic beverages on certain passenger buses; sales of such beverages exempt from taxes on alcoholic beverages and Sales and Use taxes SB 1 Tax amnesty program to encourage voluntary reporting of amounts due by delinquent and underreporting entities SB 745 Amended Sales and Use tax to specify when services performed by temporary employment agency personnel for a client are exempt SB 1120 Exempted compressed natural gas and liquefied natural gas, as motor fuels taxed under state law, from local or county excise taxes SB 1390 Amended the Cigarette and Cigar and Tobacco Products taxes, including exempting cigarettes for research purposes and changing due dates SB 1557 Amended Motor Fuel taxes, including changes to: fuel sold tax-free to unlicensed purchasers, exporting of fuel, and the Petroleum Product Delivery Fee Texas Comptroller of Public Accounts – January 2019 15 Sources of Revenue Texas Comptroller of Public Accounts January 2019 16 State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Texas Taxes and Fees What’s the Difference Between a Tax and a Fee? Texas Taxes between taxes and fees, and many people may not be able to Coin-Operated Amusement Machine tax and the Combative This section discusses the major state taxes currently There is no one universally agreed upon distinction collected in Texas. A few relatively minor taxes, e.g., the tell the difference when paying a government levy. Unfortu- Sports Admissions tax, are excluded. The 84th Legislature nately, the Texas Tax Code is of little help. For administra- tive purposes, it defines a tax and fee as the same thing. See Texas Tax Code § 101.003(13) which states “‘Tax’ means a tax, fee, assessment, charge, or other amount that the comptroller is authorized to administer.” Most distinctions between taxes and fees concentrate on both the use of the revenue and whether the levy is asso- (2015) repealed the following taxes, most of which were discussed in previous editions of Sources of Revenue: the Airline/Passenger Train Beverage tax, the Attorney Occu- pation tax, the Bingo Rental tax, the Controlled Substances tax, the Fireworks tax, the Inheritance tax, the Liquefied Gas tax, the Oil Regulation tax, and the Sulphur Production tax. The value of a set of goods or services, or other measure ciated with some direct government resource the payer is (e.g., “margin,” as with the Franchise tax) to which a tax rate Joseph Henchman of the Tax Foundation, a non-partisan pri- Taxes and Fees” (and throughout this publication), a number accessing in conjunction with the levy (e.g., a “user fee.”) vate sector think tank, has articulated this view succintly by stating, “A tax has the primary purpose of raising revenue. By contrast, a fee recoups the cost of providing a service from a beneficiary.” The IRS has taken a similar approach for federal income tax purposes: “A tax is an enforced contribution … imposed and collected for the purpose of raising revenue to be used for public or governmental purposes. Taxes are not payments for some special privilege granted or ser- is to be applied is referred to as the “tax base.” In “Texas of discussions may be found concerning how the tax rates and tax bases of major taxes (and fees) have changed during the period 1972-2018; a summary of a revenue source and how it currently operates is a description as of fiscal 2018. Table 3 shows average annual growth rates for catego- ries of state taxes, for selected periods of time since 1972. The table also compares those rates of growth with those of personal income and of the combination of inflation and population. vice rendered and are, therefore, distinguishable from Sales and Use Taxes under particular powers or functions of government.” revenue, by far, of the state’s categories of taxes is the sales various other charges imposed for particular purposes Rev. Rul. 77-29 (I.R.S. 1977). The group of taxes representing the largest amount of tax and use tax group. This group consists of the state’s single largest tax, the 6.25 percent Limited Sales and Use tax—com- monly referred to as the Sales and Use tax or simply the sales Texas Comptroller of Public Accounts – January 2019 17 Sources of Revenue tax—which most individuals and businesses pay on a regular percent, to $14.3 billion, in fiscal 2003. The 2002 decline previously included the 2 percent Fireworks tax which was fell by 4.5 percent. basis, as well as the Boat and Boat Motor sales tax. The group (see above) repealed in 2015. Since fiscal 1967, this group was the first annual decrease since 1983, when collections As the economy improved in 2003, so did sales tax col- of taxes (at times represented by one, two, or all three of the lections. From 2003 to 2008, collections registered 8.6 per- source of tax revenue. In 1972, the category accounted for In 2009, another recession (the “Great Recession”) aforementioned taxes) has reigned as the state’s single largest cent average annual growth, peaking at 12.0 percent in 2006. 35.2 percent of total tax collections; by 2018, its share had began to severely impact the Texas economy, and group col- The sales tax group of taxes generated $31.94 billion accelerated to 6.6 percent in 2010, the steepest annual risen to 57.5 percent. (See Charts 1 and 2.) in fiscal 2018: $31.86 billion, 99.8 percent or virtually all, from the Sales and Use tax; 0.2 percent from the Boat and Boat Motor sales tax. lections declined that year by 2.7 percent. The rate of decline decline since 1972. During this two-year period collections fell by an average of 4.7 percent each year. In 2011, category revenues rebounded strongly as the In 1972, Texas’ Sales and Use tax rate was 4 percent, economy recovered, receiving a boost from activity in nation. Between 1972 and 2001, the Legislature increased Permian Basin areas, with collections growing by 9.4 per- the same as 15 other states and the ninth highest rate in the the rate four times (once temporarily, three times perma- nently) to the current 6.25 percent. (See Appendix B.) Since 1972, the Legislature broadly expanded the Sales and Use tax base two times, in 1984 and 1987, to cover a wider range of taxable goods and services. (See Appendix C.) As of cal- endar year 2018, 45 states levied a sales and use tax, with 12 imposing a higher statewide rate than Texas. Texas, at 6.25 percent, is tied with Illinois and Massachusetts at the 13th highest state sales tax rate; California has the highest rate at 7.25 percent (See Appendix D-2.) Overall sales tax category collections totaled $824 mil- lion in 1972; in 2018 collections reached $31.94 billion, an 8.3 percent average annual growth rate for the 46-year period. (See Table 3 and Appendix G.) Over this period, howev- er, the growth rate varied considerably. From 1972 to 1983, the rapidly growing shale oil plays in the Eagle Ford and cent. Sales tax growth continued to be strong as the general economy (and oil exploration) continued to improve with increases of 12.6 percent in 2012 and 7.2 percent in 2013. Revenue retrenched by 2.3 percent in 2016 as collapsing oil prices buffeted the Texas economy; rising prices and rig counts contributed to a modest revenue gain in 2017. Group sales tax collections grew sharply in 2018 by 10.5 percent; fueled by a robust statewide economy, featuring an unemployment rate nearing a 40-year low, and continued strength in oilfield activity. The average growth rate over the period 2010 through 2018 of the sales and use tax group was 6.3 percent—in line with average measures of economic growth, but not capturing the year-to-year revenue volatility of that time frame. The Boat and Boat Motor sales tax was enacted in when the tax rate of the Sales and Use tax remained constant 1991 at 6.25 percent. It applies to all but the very smallest, enacted; boats were generally taxed under the Sales and Use in length. The Boat and Boat Motor sales tax, unlike the at 4 percent (the Boat and Boat Motor tax had not yet been tax until fiscal 1992), the average annual growth rate was 13.5 percent. From 1983 to 1992, average annual growth dropped slightly to 11.1 percent, despite the aforementioned base broadening and rate increases. From 1992 to 2001, the average annual growth slowed to 6.2 percent. As the effects of the 2001 U.S. recession began to be felt in Texas, annual category collections fell 1.0 percent to $14.5 billion in fiscal 2002; receipts dropped another 1.6 self-propelled boats; it is not applicable to craft over 65 feet Sales and Use tax, does not have the up-to-two-percent local option sales taxes. In 1992, the first year of collections, the tax generated $17.0 million; revenue was $41.9 million by 1999. Buffeted by two recessions, the tax has grown more slowly since, reaching $76.3 million—roughly 2/10s of one percent of total sales tax group collections in fiscal 2018. Sales and Use Tax revenue (but not Boat Tax revenue) is affected by the amendment to the Texas Constitution Texas Comptroller of Public Accounts – January 2019 18 Sources of Revenue CHART 1 Fiscal 1972 Total State Tax Revenue by Source $2.344 Billion All Funds Excluding Trust Cigarette and Tobacco Taxes, 9.9% Oil Production and Regulation Taxes, 8.2% Motor Vehicle Sales/Rental Taxes, 7.1% Franchise Tax, 5.5% Motor Fuels Taxes, 15.2% Natural Gas Production Tax, 4.9% Alcoholic Beverages Taxes, 3.4% Insurance Taxes, 2.8% Inheritance Tax, 1.7% Utility Taxes, 1.0% Sales Tax, 35.2% Hotel Occupancy Tax, 0.4% Other Taxes, 4.8% CHART 2 Fiscal 2018 Total State Tax Revenue by Source $55.585 Billion All Funds Excluding Trust Motor Vehicle Sales/Rental Taxes, 8.9% Franchise Tax, 6.6% Motor Fuels Taxes, 6.6% Insurance Taxes, 4.5% Sales Tax, 57.5% Oil Production Tax, 6.1% Cigarette and Tobacco Taxes, 2.4% Alcoholic Beverages Taxes, 2.3% Natural Gas Production Tax, 2.6% Hotel Occupancy Tax, 1.1% Utility Taxes, 0.8% Other Taxes, 0.6% Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 19 Sources of Revenue TABLE 3 State Tax Collections Average Annual Growth Rates for Selected Periods, Fiscal 1972-2018 Fiscal 1972 through Fiscal 1983 Fiscal 1983 through Fiscal 1992 Fiscal 1992 through Fiscal 2001 Fiscal 2001 through Fiscal 2003 Fiscal 2003 through Fiscal 2008 Fiscal 2008 through Fiscal 2010 Fiscal 2010 through Fiscal 2018 Fiscal 1972 through Fiscal 2018 Personal Income Inflation x Population 13.2% 11.1% 6.1% 5.3% 7.3% 4.8% 2.4% 3.6% 7.6% 5.2% 0.4% 2.6% 5.0% 3.4% 7.5% 6.0% Sales Taxes Oil Production Tax Natural Gas Production Tax Motor Fuels Taxes Motor Vehicle Sales and Rental Taxes Franchise Tax Cigarette and Tobacco Taxes Alcoholic Beverage Taxes Insurance Taxes Utility Taxes Inheritance Tax Hotel Occupancy Tax Other Taxes 13.5% 18.0% 22.4% 3.0% 12.1% 14.2% 3.9% 11.9% 11.7% 22.5% 7.6% 15.2% (0.3)% 11.1% (8.9)% (8.1)% 16.6% 8.5% 7.8% 5.7% 4.0% 9.8% (0.3)% 5.3% 13.6% (7.9)% 6.2% (1.6)% 13.8% 3.9% 10.1% 6.7% 0.0% 3.8% 5.3% 5.1% 9.6% 7.7% (2.3)% (1.3)% (2.2)% (18.1)% 1.3% (3.7)% (6.4)% (0.2)% 2.4% 19.4% (1.6)% (23.9)% (3.9)% 2.5% 8.6% 27.7% 20.2% 1.8% 4.4% 21.0% 19.9% 6.7% 4.4% 8.9% (50.5)% 10.2% 32.1% (4.7)% (16.2)% (48.0)% (1.0)% (11.3)% (6.9)% (2.0)% 1.6% (4.4)% (2.5)% (87.9)% (5.6)% (9.9)% All Taxes 12.4% 7.2% 6.2% (2.0)% 9.6% (7.5)% 6.3% 16.4% 8.9% 2.4% 8.3% (0.6)% (0.6)% 6.0% 8.3% (0.7)% (100.0)% 7.8% 10.4% 8.3% 6.4% 5.6% 5.2% 7.7% 7.6% 3.9% 6.3% 8.2% 6.6% (100.0)%1 9.7% 2.3% 5.8% 7.1% 1 Inheritance Tax was repealed effective September 1, 2015. Liabilities accruing before that date were not affected. Beginning in 2018, residual post-repeal activity is reported in the tax revenue category of Other Taxes. Source: Texas Comptroller of Public Accounts; IHS Markit approved by voters in November 2015 (see further discussion opportunities. In fiscal 1972, the tax was levied at an effective additional funding for road construction and maintenance, $128.8 million in tax revenues that year — 5.5 percent of all under the section on Motor Vehicle Sales Taxes). To provide each net dollar of collections—after reaching $28 billion in a year and up to an annual maximum of $2.5 billion—is to be sent to the State Highway Fund. After the maximum of $2.5 rate of $4.25 per $1,000 of taxable capital, and it produced state tax revenues. Between 1972 and 1983, revenues grew at a 14.2 percent average annual rate. (See Table 3.)  By 1986, one year after a rate hike to $5.25 per $1,000 billion is reached, all remaining collections beyond $30.5 of taxable capital, the tax generated $901.0 million, and by law. These provisions expire at the end of fiscal 2032, dix B.) However, by 1990, net revenues had fallen by a third billion is to be deposited in the manner otherwise provided unless extended by vote of the Legislature. Franchise Tax A corporate income tax is the principal tax on business entities in 44 states. (See Appendix D-3.) Currently in Texas, corporations, partnerships, limited liability companies and other forms of business pay the state Franchise tax; Texas does not have a corporate income tax. Prior to 2008, only corporations and limited liability companies were subject to the franchise tax. Over the years, this tax revenue has fluctuated, in part because of court challenges, base erosion, and tax planning accounted for 8.8 percent of state tax revenues. (See Appento slightly below $600 million. In an effort to stabilize the base and spread the tax bur- den more equitably, the Legislature rewrote the Franchise tax in 1991 and added a new base component — earned surplus — defined roughly as federal taxable income plus offi- cer and director compensation. The revamped tax imposed a 4.5 percent tax on earned surplus and reduced the basic tax rate to $2.50 per $1,000 of taxable capital, down from $5.25. Taxpayers paid the higher of the tax calculated on each of the two base components. By 1999, Franchise tax revenues had climbed to $2.1 billion and accounted for 8.8 percent of total state tax revenues. Texas Comptroller of Public Accounts – January 2019 20 Sources of Revenue In contrast to the 6.7 percent average annual growth rate temporarily reduced the one percent tax rate to 0.975 percent by an average of 6.4 percent per year during the 2001-03 retail trades) to 0.4875 percent, as well as adding a fourth for the 1992-2001 period, Franchise tax revenues declined economic downturn, falling to $1.7 billion in 2003. Revenues climbed to $3.1 billion in 2007, the final year of col- lections under the earned surplus-based tax structure, a 16.3 percent average annual growth rate from 2003. These gains were propelled in large part by particularly high returns in the energy industry. In response to the need for more state revenue to fund school property tax relief and mounting concern over the and the 0.5 percent tax rate (for those in the wholesale and margin calculation of total revenue minus $1 million. The two primary tax rates were temporarily lowered again for filing year 2015 to 0.95 / 0.475 percent.  In 2015, the 84th Legislature permanently reduced the primary Franchise tax rates from 1.0 to 0.75 percent and from 0.5 to 0.375 percent, both reductions beginning with filing year 2016. In 2018, total Franchise tax collections were $3.69 long-term viability of the tax (notably, increasing use of billion. The average annual growth rate of the Franchise tax tax change in 2006 during the 79th Legislature, 3rd Called percent from 1972 through 2018. “loopholes”) the Legislature made a substantial Franchise Session. The changes made limited partnerships, certain (across several tax bases and multiple rates) has been 7.6 general partnerships, business trusts, and others subject to Severance Taxes owned only by natural persons, and passive entities are not rate, 4.6 percent of the taxable value of oil produced, since The former tax base of earned surplus and capital was for so long. Despite the long-term rate stability, tax receipts the tax. Sole proprietorships, general partnerships directly subject to the tax. replaced with a firm’s “margin,” defined as total revenue less the greater of: 1) the cost of goods sold, 2) total compensation or 3) 30 percent of total revenue. For most taxable entities, the tax rate on margin was set to 1 percent. Firms in retail and wholesale trade, however, paid at 0.5 percent. The Legislature set these and other changes to the Franchise tax to take effect for reports due after January 1, 2008, making fiscal 2008 the The Oil Production tax has been levied at its current 1951; no other major state tax rate has remained unchanged have exhibited large swings in response to the rise and fall of Texas oil production and the price of oil. Another tax on oil production, the Oil Regulation tax, was previously levied at three-sixteenths of one cent per barrel (and only periodically generated more than $2 million annually) until repealed in 2015 by the 84th Legislature. Oil prices maintained a range of approximately $2.50 to first year in which the changes had an effect on revenue. $3.00 per barrel from the late 1940s through the end of the in 2008, 41.6 percent more than in 2007 under the old base. and natural gas are market prices.) The rebased Franchise tax produced almost $4.5 billion Of that amount $1.6 billion was placed into the Property Tax 1960s (in this section, references to the prices for crude oil In fiscal 1972 Texas collected $193 million in Oil Pro- Relief Fund and the remainder went to the General Revenue duction and Oil Regulation taxes; the average price in calen- funds is based on the Comptroller’s estimate of the revenue in 1973 by the Arab Oil Embargo. Prices responded to that, Fund. The division of Franchise tax revenue between the that would have been generated if changes to the law enact- ed in 2006 had not been passed. Franchise tax collections in excess of that estimate are deposited in the Property Tax Relief Fund. Beginning in 2010, the total revenue no-tax-due thresh- old was increased, from $300,000 to $1 million, and sched- uled for adjustment every two years to reflect changes in the Consumer Price Index. For filing year 2014, the Legislature dar 1972 was $3.39 per barrel. The price level was shocked and later events, by more than tripling by the end of that decade; prices continued to climb into the $30 range by the early 1980s before a price collapse in 1986 (and attendant collapse in domestic production) resulted in a long period of declining prices, ultimately hitting a plateau of approximately $15 per barrel which persisted through the 1990s. By 1999, Oil Production and Regulation tax revenue had slid to just $210.8 million. Texas Comptroller of Public Accounts – January 2019 21 Sources of Revenue By fiscal 2000 and 2001, annual tax revenue collections petroleum industry: wide-scale production from shale oil as oil prices doubled from the 1999 average to $26.70 and duction of crude oil had tripled in roughly four years. Prices were double that of 1999, reaching $416.6 and $442.6 million $29.76 respectively. Texas production of oil, however, had never returned to the 1.2 billion barrel annual peak seen in the early 1970s. Annual production in 2000 and 2001 hovered around 400 million barrels. Faltering in the wake of the Sep- tember 11, 2001 terrorist attacks, prices dropped to $19.40 by December 2001. Although prices recovered to $26.95 by May 2002, reflecting the geopolitical conflicts in the Middle East and restrained production by OPEC and other major producers, 2002 tax revenues declined to $338.7 million. Tax revenues climbed to $423.6 million in 2003 as oil prices temporarily reached $35.73 per barrel in February 2003 in anticipation of potential supply disruptions caused by the Iraq war; the average price in 2003 was $30.11. In 2004, supply disruptions from major producing countries and hurricane damage to oil and natural gas infrastructure in the Gulf of Mexico, along with heightened uncertainty regarding OPEC’s spare capacity to meet growing world oil demand, pushed prices to $40.28 by May 2004, and raising the year’s average to $34.55. Over the next four years oil prices continued to set new records in response to diminishing worldwide spare deposits. By the end of calendar 2014, overall Texas pro- were holding in the $90-$100 range during this time. Oil Production and Regulation tax revenue surpassed $3.8 bil- lion in 2014. Abruptly, a world oil glut sent prices tumbling to a bottom of $30.62 for February 2016 before steadying near $45 during mid-2016. Texas production declined sharply as new wells almost ceased to be drilled and existing well production declined over time, as is normal. As such, by 2016, Oil Production tax (the small Oil Regulation tax had been, by this time, repealed) revenue had fallen to $1.7 billion. As prices rebounded so did the number of rotary rigs operating in Texas. By the end of fiscal 2018, the price had consistently risen over the year to average $67.85 that August and the rig count had more than doubled to 528. Production of crude oil by the second half of fiscal 2018 had risen to a level surpassing the state’s production seen in 2017 and 2015, and was on-par with the output during Texas’ peak production years of the early-1970s. Oil Production tax rev- enue in fiscal 2018 was $3.39 billion, a 60.9 percent increase over 2017 and approximately twice the amount of revenue collected in 2016. The Natural Gas Production tax is set at 7.5 percent of production capacity, growing demand led by emerging mar- market value, a rate unchanged since 1969. In fiscal 1972, and the declining value of the U.S. dollar in which most tax revenues have generally followed the trend set by Oil kets, ongoing geopolitical threats and supply disruptions, of the world’s oil sales are denominated. In June 2008, those factors caused the taxable oil price to explode to $134.02. For 2008, with the price averaging $101.93, Oil Production and Regulation taxes reached an all-time high tax collections were $114.4 million. Natural Gas Production Production tax revenues, peaking at $1.1 billion by 1985 before entering a long period of stable production and low natural gas prices until 2001. Natural gas prices began a rapid rise in the middle of of more than $1.4 billion, surpassing the previous record set 2000 during record breaking winter cold, and those higher tax revenues declined. The average price fell to $39.26 in nett Shale and other places in Texas. The higher production in 1982. With the onset of the recession, the oil price and February 2009 as the credit crisis deepened, demand slowed, and excess supply grew. Prices eventually recovered and averaged $64.09 for the year. Likewise, Oil Production and Regulation tax collections fell to $884.5 million for 2009, a 38.4 percent drop. Prices strengthened further and averaged $76.32 in 2010 and $91.25 in 2011. At the same time of these price increases and Texas’ exit and recovery from the Great Recession, a signal event was occurring in the Texas prices helped kick-start production development in the Bar- and prices generated record tax collections in 2001 of $1.6 billion, an astounding 128.9 percent more than the previous year, with an average price of $5.41 per thousand cubic feet. In 2002, recessionary pressures pushed the average price down to $2.84, and tax revenue fell to $628.5 million. With the improved economy in 2003, both prices (aver- aging $4.80) and revenues (just shy of $1.1 billion) rebound- ed. As economic growth continued, increasing natural gas Texas Comptroller of Public Accounts – January 2019 22 Sources of Revenue demand pushed prices higher in 2004, to an average $5.55. an average of $2.96. Tax collections were $1.43 billion for increased 2004 revenues by 30.2 percent to $1.4 billion. been the increasing importance of casinghead (or oil-well Those conditions led to the rapid growth in production and Revenues continued increasing in 2005, reaching $1.7 billion as prices averaged $6.57. In August of 2005, Hurricane Katrina devastated the oil and natural gas industry’s pipelines, platforms, and other related facilities, leading to significant production losses. With diminished Gulf natural gas production, continuing strong demand, and speculative investments by hedge funds, prices moved from over $7 in June 2005 to over $13 in 2018, a 45.6 percent increase over 2017. Noteworthy has associated) natural gas production vs. gas produced from dedicated natural gas wells. A decade ago, this category of gas made up less than 10 percent of overall natural gas pro- duction in Texas; by 2018, owing to the tremendous growth of oil exploration combined with declining gas well drilling, casinghead gas’ portion of total natural gas production is approaching one-third. Similar in some respects to the constitutional amend- December of that year. The 2006 average price climbed to ment discussed earlier in the Limited Sales and Use Tax growth of natural gas production led by the Barnett Shale to the Texas Constitution also intended to provide addition- $9.28 with tax collections at $2.3 billion. In 2007, continued formation, a warmer than average winter, an unrealized hurricane forecast, and a record setting storage inventory caused the average price to decline to $7.06, and revenue fell to $1.9 billion. In 2008, technological innovations in the extraction of shale-gas made natural gas more plentiful and competitive. Texas natural gas production grew rapidly and surpassed 7 trillion cubic feet for the year, the highest since the 1970s and prices continued to rise. The average price of natural gas spiked to almost $13 in June 2008, and the 2008 annual average increased to $8.47. Tax collections, rising over 41.6 percent from 2007, set a record high of $2.68 billion. section, Texas voters had earlier approved another change al funding for road construction and maintenance. Under SJR 1, approved by voters in November 2014, the flow of dollars associated with crude oil and natural gas revenue in excess of certain threshold amounts and previously dedi- cated solely to the state’s Economic Stabilization (“Rainy Day”) Fund would be permanently bifurcated: up to 50 percent of those funds now go annually to the State High- way Fund; the remainder continue to flow to the Economic Stabilization Fund. Motor Fuel Taxes Motor Fuel taxes consist of the state’s consumption The national recession caused the demand for natural taxes on gasoline, diesel fuel, as well as compressed natural continued to rise, resulting in prices plummeting to below taxed at 5 cents per gallon, and diesel fuel was taxed at 6.5 gas to begin weakening in early 2008, while production $4 by April of 2009. The annual average price in 2009 fell to $5.91. Tax collections dropped by 47.6 percent, to $1.4 billion, due to lower price levels but also because of record natural gas tax refunds of over $500 million associated with high-cost gas wells. For 2010, prices dropped to $4.43; tax collections dropped to $725.5 million, after almost $480 million in refunds. gas and liquefied natural gas. In fiscal 1972, gasoline was cents per gallon. Total Motor Fuel tax collections in 1972 were $355.8 million, of which taxes on gasoline accounted for 90 percent. Between 1972 and 1983, the tax rates for these fuels were unchanged, and total revenue collections grew by an average annual rate of 3.0 percent per year. (See Table 3 and Appendix G.) In contrast, from 1983 to 1992 the Legislature increased By 2018, Texas production had been stable-to-slightly the tax rates on gasoline and diesel fuel once temporarily and to develop in the eastern United States). Prices, always gallon. During this period, collections increased by an aver- decreasing for several years (as big shale fields continued variable, had generally been trending downward during this time, as well. During fiscal 2015 through 2018, prices remained in the $2-$3 range, finishing August 2018 with three times permanently to the current rate of 20 cents per age 16.6 percent per year to $2.0 billion. (See Appendix B.) From 1992 to 2018, a period with no tax rate and no appreciable base changes, revenue collections increased an Texas Comptroller of Public Accounts – January 2019 23 Sources of Revenue average of 2.5 percent per year. In 2018, collections topped In 2001, the Legislature imposed a 2.5 percent sur- $3.67 billion, the highest annual amount ever collected. charge on every retail sale, lease or use of a 1996 model Gasoline tax was 75 percent. From 1972 to 2018, the aver- pounds. In 2003, model year 1997 and newer diesel motor The share of Motor Fuel tax collections in 2018 from the age annual growth rate in total category collections was 5.2 percent. or earlier diesel motor vehicle weighing more than 14,000 vehicles were assessed the surcharge at a one percent rate, and in 2005 certain diesel-powered vehicles used for recreational purposes were exempted from the surcharge. Reve- Motor Vehicle Taxes Motor Vehicle taxes consist of the Motor Vehicle Sales and Use tax; the Motor Vehicle Sales and Use tax—Sell- nues from the surcharge, which is set to expire in 2019, are dedicated to the Texas Emissions Reduction Plan Account.  The Motor Vehicle Rental tax has a two-tier rate struc- er-Financed Motor Vehicles, the same tax but applicable in ture: 10 percent for rentals of 30 days or less, and 6.25 per- collection and remittance of tax revenue; the Motor Vehicle days are classified as leases, with the vehicle taxed under the certain circumstances and differing only in the manner of Rental tax; and the Manufactured Housing Sales and Use tax. In fiscal 1972, collections from Motor Vehicle taxes cent for rentals of 31 to 180 days. Rentals longer than 180 Motor Vehicle Sales and Use tax. The Manufactured Housing Sales tax is levied on the totaled $167.1 million. initial sale of every new manufactured home sold in the state cle taxes grew strongly by an average of 12.1 percent each selling price. Collections from 1972 through 1983 for all Motor Vehi- year. (See Table 3 and Appendix G.) From 1983 to 1992, at the rate of 5 percent of 65 percent of the manufacturer’s All the taxes in this Motor Vehicle tax group, except collections slowed to an average pace of 8.5 percent annu- the Manufactured Housing Sales tax, were affected by the boosted by multiple tax rate increases, and broke above $1 in November 2015 (see discussion in the section on Sales ally; revenue was dampened by two recessions in Texas, billion in annual collections for the first time in 1989. From 1992 through 2001 average annual growth improved to 10.1 percent; annual collections first exceeded $2 billion annu- ally in 1997. An economic slowdown caused collections to decline in the 2001-03 period by an average of 3.7 percent each year. Collections for this category of taxes improved at a single-digit pace through 2007, were flat in 2008, then plummeted by 22.2 percent in 2009 as the Great Recession amendment to the Texas Constitution approved by voters and Use Taxes). With respect to Motor Vehicle Sales and Use and Motor Vehicle Rental taxes, 35 cents of each net dollar collected annually—after reaching $5 billion—is to be sent to the State Highway Fund; the remaining 65 percent remains deposited in the General Revenue Fund. These pro- visions expire at the end of fiscal 2029, unless extended by vote of the Legislature. reached Texas. Fiscal 2010 was the beginning of the return Cigarette, Cigars and Tobacco Products Taxes years generally marked by strong increases from 2011-2015. includes the Cigarette tax and the tax on Cigars and other Motor Vehicle taxes were $4.97 billion in 2018, an increase 18.5 cents per pack of 20 cigarettes. Between 1984 and to normal with a slight 1.1 percent increase, followed by Following weak 2016 and 2017 results, collections from of 9.7 percent from 2017. The average annual growth rate was 7.7 percent from 1972 to 2018. In 1972, the Motor Vehicle Sales and Use tax rate was 4 percent. From 1983 to 1992, the Legislature increased the sales and use tax rate three times, reaching the current 6.25 percent rate in 1991. (See Appendix B.) This category of taxes on tobacco-based products Tobacco Products. In fiscal 1972, the Cigarette tax rate was 1990, the tax rate increased four times, and the rate was stable at 41 cents until January 2007. At that time, the rate increased to the current $1.41 with the additional revenue to be deposited to the newly-created Property Tax Relief Fund (as was the gain from the increase in tax rate, passed in the same bill, on snuff; more below). (See Appendix B.) Almost all of the growth in Cigarette tax revenues since the Texas Comptroller of Public Accounts – January 2019 24 Sources of Revenue mid-1980s is from legislative rate increases, as decreasing sold to consumers by restaurants and bars that are permit- to health-related concerns, price increases, and changing Beverage category of taxes (one other tax, the Airline/ Between 1972 and 2011, the tax on cigars was unchanged by those common carriers to their customers, was repealed was expanded in 1977. The tax on tobacco products other Beverage tax collections totaled $78.6 million, with the roll-your-own tobacco) was applied to snuff in 1984, and the revenue. Changes in social attitudes; consumer preference 40 percent of the manufacturer’s list price (effective January age; and changes in federal excise taxes have likely been tobacco products (effective September 2009), from a tax over the past decade. Per capita beer consumption has been with an initial rate of $1.10 per ounce. The rate increased by and total per capita consumption has remained largely consumption has gradually eroded the underlying base due ted to serve liquor. Together, these comprise the Alcoholic social attitudes. Passenger Train Beverage tax on alcoholic beverages sold other than a rate reduction for certain large cigars in 1975 that by the 84th Legislature in 2015). In fiscal 1972, Alcoholic than cigars and cigarettes (chewing tobacco, pipe tobacco and Mixed Beverage tax accounting for about one-sixth of total rate was increased three times from 1987 to 2006, reaching between beverage types; health concerns; a higher drinking 2007). The Legislature subsequently changed the tax on those some of the factors contributing to changes in alcohol usage based on their value to a tax based on their product weight, trending downward, wine and liquor have been increasing, three cents per ounce annually, through fiscal 2013, to the unchanged-to-slightly-up. current rate of $1.22 per ounce. Total Alcoholic Beverage tax collections increased In 1972, total tax collections from the Cigarette, Cigars by an average annual growth rate of 6.3 percent over the with 96 percent of the revenue from the Cigarette tax. From became effective on July 1, 1971 (see Appendix B and D-2), to these products, revenue collections increased by an aver- by the drink” pushed total alcohol tax revenue growth by an tions rose by an average of 5.7 percent per year, reflecting Between 1983 and 1992 category revenue growth and Tobacco Products tax category were $232.3 million, 1972-2018 period. The Mixed Beverage Gross Receipts tax 1972 to 1983, a period with no significant tax rate changes and the expansion of businesses permitted to serve “liquor age of 3.9 percent per year. Between 1983 and 1992, collec- average 11.9 percent annually between 1972 and 1983. the gains of tax rate changes, but over the following 11 slowed to 4.0 percent annually, although the Legislature Cigarette tax increase in January 2007, those revenues grew to 14 percent in 1990. Tax collections grew slowly during Cigarette tax revenues have been generally flat. Cigar and annual growth rate increased to 6.7 percent, but the national ited a strong gain in 2010 when the tax base for snuff was growth to 1.6 percent in 2009 and 2010. Alcoholic Beverage has been modest-to-flat. In 2018, total group tax collections collections totaled $1.29 billion. From 1972 through 2018, category collections have grown lowered the rate of the Mixed Beverage Gross Receipts tax years collection levels on average were flat. Following the raised the Mixed Beverage Gross Receipts tax rate from 12 substantially through 2008. (See Table 3.) Since that time, the recession of the early 2000s; from 2003 to 2008 the Tobacco products tax (including snuff) collections exhib- and state “Great Recession” constrained average category changed; since then growth in collections for these products tax revenues rebounded and in 2018, Alcoholic Beverage tax were $1.32 billion — 83 percent from the Cigarette tax. The 83rd Legislature (HB 3572, effective Jan. 1, 2014) at an average annual rate of 3.9 percent. (imposed on the mixed beverage permit holder) from 14 Alcoholic Beverage Taxes a rate of 8.25 percent. (See Tables 1 and 2.) The revenue Texas levies six taxes on alcoholic beverages: the Liquor, Beer, Wine, and Malt Liquor (also known as ale) excise taxes; and the Mixed Beverage Gross Receipts tax to 6.7 percent and imposed a Mixed Beverage Sales tax at from these two taxes on mixed beverages accounted for 82 percent of total Alcoholic Beverage category revenue in 2018. and the Mixed Beverage Sales tax on all alcoholic beverages Texas Comptroller of Public Accounts – January 2019 25 Sources of Revenue In 2009, revenue was down by 13.3 percent as a result Insurance Taxes Insurance taxes include Insurance Premium taxes and of a recession-related decrease in premiums written and an on behalf of the Texas Department of Insurance. Insurance (CAPCO) program investments and Texas Windstorm Insur- tax collections, generally apply to taxes paid on insurance the Great Recession, collections rose; first modestly then at Premium taxes are levied on an insurance company’s growth rate of the Insurance category of taxes during 2010- more than a dozen Insurance Maintenance taxes collected increase in tax credits allowed for certified capital company Premium taxes, which account for the majority of Insurance ance Association (TWIA)-related assessments. Following that covers risk located in this state. a double-digit pace during 2012-2014. The average annual written premiums and vary by type of insurance. The tax 2018 was 8.3 percent. and are: 1.75 percent for accident and health insurance; life Hotel Occupancy Tax percent on the first $450,000 of premiums and 1.75 percent pays for a room or space in a hotel that costs $15 or more 1.35 percent for title insurance; 0.5 percent for licensed 3 percent, tax collections totaled $8.5 million. Legislation in lines and independently procured insurance. Surplus lines addition to the state rate of 6 percent, local-option hotel taxes, surplus lines agent; unauthorized taxes are the responsibility reached $601.2 million in 2018, a 9.7 percent average annual procured taxes are the responsibility of the insured or its islative factors affecting the growth of revenue collections rates for licensed insurers are applied to gross premiums insurance and Health Maintenance Organizations pay 0.875 The Hotel Occupancy tax is imposed on a person who thereafter; 1.6 percent for property and casualty insurance; per day levied on room receipts. In 1972, with a state rate of captive insurers; and 4.85 percent for unauthorized, surplus 1984 and 1987 brought the rate to the current 6 percent (in premium tax is collected from the insured by a licensed at various rates, are levied in many locations.) Collections of the insurer, the insured or the agent, and independently increase from 1972 (See Table 3 and Appendix G.) Non-leg- designated agent. (See Appendix F.) include population change, business travel, and inflation. of insurance for the purpose of recouping the regulatory Utility Taxes sets the tax rates annually (subject to statutory caps) for each sources. The largest, with 82 percent of total 2018 category From 1972 to 1995, Insurance Premium taxes under- a rate varying from 0.581 percent to 1.997 percent of gross structure, tax base and available tax credits. These legisla- with 12 percent of 2018 revenue, is the Public Utility Gross ed total Insurance tax revenues to over $2.50 billion in 2018 levied at one-sixth of 1 percent of gross receipts. The third annual growth rate. income. 5.3 percent average annual growth rate, but as many insurers were $452.4 million in 2018, a 6.6 percent average annual of premium hikes the annual growth jumped to 19.4 percent occurred between 1972 and 1983, when the average annual From 2003 to 2008, annual revenue growth slowed to 4.4 been variable, with growth averaging only 2.0 percent per Insurance Maintenance taxes are levied on specific lines costs incurred by the Texas Department of Insurance, which Utility taxes are a group of three related revenue line of insurance. revenue, is the Gas, Electric, and Water Utility tax, levied at went extensive legislative modifications involving rate utility receipts, depending upon a city’s population. Next, tive changes, coupled with premium volume growth, boost- Receipts assessment, created by the Legislature in 1975 and from $66.5 million in 1972, yielding an 8.2 percent average is the Gas Utility Pipeline tax, levied at 0.5 percent of gross From 1992 to 2001, vigorous rate competition yielded a Utility tax revenues totaled $24 million in 1972 and imposed stricter underwriting criteria and initiated a series growth rate. The most rapid growth in this revenue group between 2001 and 2003. (See Table 3 and Appendix G.) growth rate was 22.5 percent. Since 1983, collections have percent, reflecting increased competition and an end to the year. (See Table 3 and Appendix G.) previous years’ rate adjustments. Texas Comptroller of Public Accounts – January 2019 26 Sources of Revenue one or fewer fees with $50 million annual collections. In Other Taxes Other taxes levied in Texas include the Oil Well Service addition, fees deposited to trust funds are not included in tax, the Coin-Operated Machine tax, the Cement Production the figures in Table 4. from this group totaled $315.9 million in 2018, compared Transportation Fees al increase of 2.3 percent. The slow long-term increase and operating a motor vehicle in Texas — registrations, classified in this group, most notably the state Ad Valorem fees. Telephone Company tax, the Bingo Gross Receipts tax, registrations, transportation fees have generated more fee relating to such diverse enterprises as Pistol Dealers, Car portation fees totaled $194.2 million and accounted for 64.6 the 84th Legislature (2015) repealed several taxes which these fees had risen to $2.66 billion, and while still the larg- Substances tax, the Attorney Occupation tax, the Sulphur Transportation fees grew by an average annual rate of 5.9 tax, and the Combative Sports Gross Receipts tax. Revenue to the $111.8 million collected in 1972, an average annu- Transportation fees apply to activities related to owning occurred despite the repeal of a number of taxes formerly inspections, titles, driver licenses, and other miscellaneous (property) tax. Other taxes that no longer exist include the Since the 1920s when Texas enacted motor vehicle the Bedding Stamp tax and several small occupation taxes revenue than any other fee category. In fiscal 1972, trans- Companies, Stockbrokers, and Express Companies. Further, percent of total state fee collections. In 2018, revenues from had been in this group of taxes, namely: the Controlled est source of fee revenue, its share had fallen to 41.4 percent. Production tax, and the Bingo Rental tax. percent over those 46 years, the slowest growth rate of any Texas Fees state fee category. Fees for motor vehicle registration are constitutionally This section reviews the major state fees collected in dedicated for acquiring rights-of-way and for constructing, a variety of purposes. Many are collected to cover the costs registration fees include registrations for all cars, trucks, ers include tuition fees and court costs. Fees are presented plates (available for an amount in addition to the fee for tation, Business Regulation, Natural Resources, Parks and the universal registration sticker, which applies to passenger billion in fees were collected compared to $300.8 million in a three-year period beginning in 1985. The fee changed Recent editions of Sources of Revenue have used a of the vehicle, resulting in a variable rate for the universal fees would be highlighted in this discussion and Table 4. September 2011, the rate was changed back to a weight basis ing for programmatic and statutory changes, the individual and vehicles over 6,000 pounds pay a variable fee from $54 ous three editions (note: the Non-Bypassable Utility fee added for certain diesel trucks to fund the Texas Emissions statutorily inactive; and, having not generated revenue in Registration fee collections totaled $165.4 million in 1972 remarked upon in this edition). As before, exceptions to growth rate of 5.0 percent. Texas. These fees are paid by businesses and individuals for maintaining, and policing public roadways. Motor vehicle of registrations, licenses, permits and other certificates. Oth- motorcycles and other vehicles, as well as specialty license here and in Table 4 for seven broad categories: Transpor- registration). In 1984, the Legislature increased the rate for Wildlife, Education, Health, and Other. In fiscal 2018, $6.41 vehicles and light trucks, by $25 per vehicle, phased in over 1972, an average annual growth rate of 6.9 percent. from one based on gross weight to one based on the age $50 million annual collection threshold to determine which registration sticker ranging from $40.50 to $58.50. Effective This updated edition follows the same practice and, allow- in which vehicles of 6,000 pounds or less pay a fee of $50.75 fees discussed are the same as those covered in the previ- to $840. In 2001, a 10 percent registration surcharge was was set at a zero rate for several years; has now become Reduction Plan. The surcharge is set to expire in 2019. any significant amount for five years, is not individually and had grown to $1.59 billion by 2018, an average annual this threshold occur; for example, when a category has Texas Comptroller of Public Accounts – January 2019 27 Sources of Revenue The motor vehicle driver license requirement was type of test required. A $10 inspection fee surcharge to com- million and grew to $145.0 million in 2018, for an average lature in 2001 to fund the Texas Emissions Reduction Plan. enacted in 1935. In 1972, license fee collections were $21.0 annual growth rate in driver license fee revenue of 4.3 percent. Since 1972, the Legislature increased the license fee schedule several times. The last rate increase in 1997 allowed the Texas Department of Public Safety to phase in rates for a six-year original license at $24 for an operator’s mercial motor vehicle inspections was added by the Legis- Like the similar surcharge on registrations, this surcharge is set to expire in 2019. Inspection fee collections of almost $3.6 million in 1972 increased to $176.0 million in 2018, an average annual growth rate of 8.8 percent. Fees on motor vehicle certificate of title were imple- license, $32 when an operator’s license includes a motorcy- mented in 1939 and the Legislature has increased the fee rate fees are assessed on the issuance of an occupational license, to $33 for an original title issued to a resident of a federally cle license, and $60 for a commercial license. Various other duplicate license, suspension reinstatement, personal identification cards and other special licenses. Driver license rev- enue was dedicated to General Revenue until September 1, 2005, when it was rededicated to the Texas Mobility Fund. The 78th Legislature (2003) enacted the Driver Respon- sibility Program to assess, as part of the process of adjudi- cation and usually in addition to other court-mandated costs and fines, surcharges on individuals convicted of violating certain highway traffic laws such as speeding, driving while intoxicated, and driving without a license or insurance. Driv- er’s license point surcharges range from $100 to $2,000, are schedule several times since 1972. In 2003 the fee was set designated non-attainment county and $28 for residents in all other counties. State receipts from this fee were approx- imately $1.5 million in 1972, growing to $238.2 million in 2018. Collections of these fees have increased an average of 11.7 percent per year. Deposit funds for these fees include the State Highway Fund, General Revenue, the Texas Mobility Fund, and the Department of Motor Vehicles Fund (a portion of fee collections may be retained by the issuing county, depending on the type of title certificate; e.g., $5 for an original certificate of title). levied for three consecutive years, and are dedicated to trau- Business Regulation Fees In its first year of collections (2005), the program collected lines of business and activities with most of the revenue an average annual growth rate of 11.0 percent. The decrease a wide range of professional occupations, and on general ma and emergency medical services, and General Revenue. $36.8 million; collections were $143.5 million in 2018 for in revenue of $29.9 million from fiscal 2012 to 2018 may be, in part, due to various incentive and indigency programs Fees in this category are associated with a variety of coming from fees associated with the securities industry, business filings. In fiscal 1972, business regulation fees brought in which have lowered fine amounts levied by courts. $6.7 million and accounted for 2.2 percent of total state 1953, and since 1972 the Legislature has increased the fee of total state fee receipts and generated $429.0 million, an The motor vehicle inspection fee was implemented in schedule multiple times. A 2013 change in law did away with the separate inspection sticker; the state fee owed is fee receipts. In 2018, these fees accounted for 6.7 percent average annual growth rate in collections of 9.5 percent. In 1972, business-related professional fees (object code now paid at the time of vehicle registration. The current rates 3175) were $1.7 million. In 2018, collections had increased year safety inspection for new vehicles, and $50 for a com- cent. A reclassification of securities fees from this sub-cat- are $12.50 for an annual safety inspection, $21.75 for a twomercial inspection. Although emissions testing for certain counties existed previously, in 1996 the Legislature estab- lished it as part of the inspection process. Since that time, 17 counties, mostly in major metropolitan areas have emissions testing, charging an annual fee that varies depending of the to $94.8 million, an average annual growth rate of 9.2 per- egory to its own took place beginning in 2013 (see later discussion of this reclassification.) In 1991, House Bill 11 of the 72nd Legislature created a $200 fee increase on selected professions (the base fees on selected professions remain in force; see Appendix E.) This Texas Comptroller of Public Accounts – January 2019 28 Sources of Revenue CHART 3 Fiscal 1972 State Fee Revenue by Category $301 Million All Funds Excluding Trust Education, 11.0% Parks and Wildlife, 3.5% Business Regulation, 2.2% Health, 0.4% Natural Resources, 0.2% Transportation, 64.6% Other Fees, 18.1% CHART 4 Fiscal 2018 State Fee Revenue by Category $6.411 Billion All Funds Excluding Trust Business Regulation, 6.7% Education, 19.1% Health, 4.5% Natural Resources, 3.6% Parks and Wildlife, 2.9% Transportation, 41.4% Other Fees, 21.8% Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 29 TABLE 4 State Fees By Receipt Category A Historical Perspective Every Ten Years With Base Year and Last Completed Year All Funds Excluding Trust Last Completed: Fiscal 2018 Annual Growth Rate, 1972-2018 Category / Fee Base Year: Fiscal 1972 01 TRANSPORTATION 01 20 3014 Motor Vehicle Registration Fees 01 20 3012 Motor Vehicle Certificates 01 20 3018 Special Vehicle Permits 01 20 3020 Motor Vehicle Inspection Fees 01 20 3025 Driver’s License Fees 01 20 3024 Driver’s License Point Surcharges 01 30 3027 Driver Record Information Fees Other Transportation Total Transportation $165,392,110 1,476,369 2,159,375 3,579,169 21,016,418 – – 577,756 194,201,197 $284,134,362 7,181,149 3,984,286 18,913,640 26,732,779 – 3,606,481 6,305,564 350,858,261 $581,709,651 28,930,129 17,234,335 64,120,839 71,259,160 – 51,645,601 83,579,701 898,479,414 – 4,265,926 1,683,763 720,538 6,670,227 – 15,001,382 21,498,120 3,268,608 39,768,111 – 26,746,119 114,704,395 39,843,438 181,293,952 – 49,924,356 109,185,086 188,971,515 348,080,957 – 70,316,746 178,191,812 177,445,311 425,953,870 148,102,205 100,778,054 94,765,143 85,401,218 429,046,619 5.5% 7.1% 9.2% 10.9% 9.5% – – 505,983 505,983 – – 2,166,150 2,166,150 18,809,836 5,371,923 38,408,321 62,590,080 47,346,308 13,815,422 47,204,061 108,365,792 60,051,259 25,864,338 102,655,965 188,571,562 59,693,946 37,115,864 134,736,933 231,546,742 17.9% 8.8% 12.9% 14.2% 10 PARKS AND WILDLIFE 10 20 3434 Game/Fish/Equipment Fees-Non Commercial 10 20 3461 State Parks Fees Other Parks And Wildlife Total Parks And Wildlife 5,845,766 1,787,447 2,909,886 10,543,099 15,350,547 6,673,927 6,274,319 28,298,793 40,259,831 13,187,370 15,584,370 69,031,572 59,254,358 27,791,054 23,902,394 110,947,805 93,993,928 41,654,938 31,230,404 166,879,269 103,173,149 50,595,431 32,389,450 186,158,030 6.4% 7.5% 5.4% 6.4% 11 EDUCATION 11 20 3505 Higher Education Tuition/FeesNon-Pledge 11 10 3511 Teacher Certification Fees Other Education Total Education 29,983,547 – 3,186,319 33,169,866 55,657,701 377,602 5,987,009 62,022,313 260,614,713 2,217,506 13,964,158 276,796,377 561,303,978 14,222,527 21,688,672 597,215,177 928,720,244 24,090,969 73,665,421 1,026,476,634 1,181,161,501 28,040,620 17,365,907 1,226,568,028 8.3% 16.1% 3.8% 8.2% 48,697 1,825,035 2,644,151 25,227,039 71,149,674 79,154,889 17.4% – 397,959 383,712 486,305 1,316,673 – 2,915,491 1,297,022 1,384,169 7,421,717 39,931,586 18,319,853 7,531,665 46,742,703 115,169,957 56,962,638 18,718,864 13,813,657 59,548,791 174,270,988 54,713,142 39,272,779 28,039,594 103,724,319 296,899,508 53,691,997 43,096,794 34,973,030 75,995,388 286,912,098 8.4% 10.7% 10.3% 11.6% 12.4% – 30,963 – – 17,566 17,426,053 14,843,930 583,549 26,155,707 61,417,494 8,694,507 54,501,704 281,288,839 56,861,392 88,245,943 234,029,664 181,670,852 117,720,322 11.3% 20.8% 7.3% – – 54,345,288 54,376,251 – – 236,518,411 253,962,029 – 700 713,319,231 754,903,118 6,694,843 68,988,426 83,861,166 288,511 88,816,204 75,178,189 648,437,406 711,526,120 702,244,645 780,034,465 1,295,726,924 1,394,704,839 6.4% 36.9% 5.7% 7.3% $744,497,373 $2,358,264,471 $3,334,072,172 $5,690,157,841 $6,411,045,247 6.9% 03 BUSINESS REGULATION 03 10 3186 Securities Fees1 03 30 3133 General Business Filing Fees 03 10 3175 Professional Fees Other Business Regulation Total Business Regulation 08 NATURAL RESOURCES 08 30 3375 Air Pollution Control Fees 08 30 3371 Waste Treatment Inspection Fee Other Natural Resources Total Natural Resources 12 HEALTH 12 10 3557 Health Care Facilities Fees 12 10 3592 Waste Disposl Fac, Genrtor, Transporters 12 10 3560 Medical Exam & Registration 12 10 3562 Health Related Profession Fees Other Health Total Health OTHER 14 25 14 30 02 30 14 30 3704 3727 3106 3879 Court Costs Fees–Administrative Services City Sales Tax Service Fees Credit Card & Elect Svces Related Fees 14 25 3710 Court Fines Other Total Other GRAND TOTAL $300,783,296 Fiscal 1982 Fiscal 1992 Fiscal 2002 Fiscal 2012 $742,047,130 $1,328,771,372 $1,593,037,396 45,613,533 166,592,326 238,214,148 32,692,472 145,643,642 191,855,011 109,414,719 185,934,957 175,977,958 114,972,864 130,262,905 145,031,325 – 173,368,549 143,460,244 49,920,055 58,382,811 69,064,573 120,496,215 100,693,511 99,468,235 1,215,156,988 2,289,650,073 2,656,108,891 5.0% 11.7% 10.2% 8.8% 4.3% 11.0% 8.9% 11.8% 5.9% Note: Excludes Fund Groups 08, 09, 12 and 13 classified as Trust Note: Excludes certain receipts associated with Medicaid and the Disproportionate Share, UPL, DSRIP, UC, or other similar program; excluded Revenue Objects include 3564, 3568, 3569, 3588, and 3591. 1 Prior to 2013, object code 3186 revenue was deposited under object code 3175 Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 30 Sources of Revenue additional fee, like the small taxes previously discussed, was Air pollution control fees, which range from $25 to repealed by the 84th Legislature in 2015; the $200 increase $75,000 and were first collected in 1983, are assessed to Professional fee receipts are deposited to either undedi- standards established by federal and state laws and regula- on non-health professions generated $91.4 million that year. cated General Revenue; or in a General Revenue-Dedicated Account, the revenue dedicated for a particular purpose (e.g., permitting and/or regulating a profession). Securities fees are collected for the registration, appli- ensure that all industrial construction meets air pollution tions. In 2018, fee revenue was $59.7 million compared to $190,000 collected in 1983, a 17.9 percent average annual growth rate. Waste treatment inspection fees are levied on the plan- cation to sell, filing a notice of limited exemption, and other ning, management, collection, storage, or discharge of waste merly collected as professional fees (3175). However, they water resources. Fee receipts are deposited into the General activities related to securities. Many of these fees were for- were reclassified under a separate category (object code 3186) in fiscal 2013 to better reflect the nature of these fees. Securities fees make up the largest share of business regulation fees and totaled $148.1 million in fiscal 2018. General business filing fees are imposed on corpo- rations, partnerships, professional associations, and other business associations. Some of the more common examples are fees for filing articles of incorporation, articles of merg- er, certificates of authority to transact business, change of registered agent, registration and certification of corporate or wastewater; and for the costs of sampling and testing Revenue-dedicated Water Resource Management Account or the General Revenue Fund to administer water quality management programs. First collections occurred in 1984, producing $2.1 million in revenue; at that time, the fee level could not exceed $2,000. In fiscal 2010, the maximum fee level was raised to $100,000, a cap that is adjusted annu- ally based on changes in the Consumer Price Index up to $150,000. In 2018, revenues totaled $37.1 million with an average annual growth rate of 8.8 percent. name, original financing statement, and certificate of limited Parks and Wildlife Fees fee receipts are deposited as undedicated General Revenue. ment fees, state parks fees and other fees related to hunting, all business regulation fee collections that year. In 2018, $10.5 million, or 3.5 percent of all state fee collections. In partnership. With a few exceptions, general business filing In 1972, these fees produced $4.3 million, the majority of although collections had risen to $100.8 million, an average annual growth rate of 7.1 percent, general business filing fees accounted for less than one-quarter of all business regulation fee revenue. fishing and boating. In fiscal 1972, these fees generated 2018, they produced $186.2 million, a 6.4 percent average annual growth rate, and were 2.9 percent of all state fee collections. Game, fish, and equipment fees include a multiplicity of different licenses, stamps, or tags for hunting, fishing, Natural Resource Fees Natural resource fees are assessed for the use or protec- tion of state natural resources. These fees include air pollu- tion control fees, waste treatment inspection fees, and a host of other fees, fines, and penalties related to Texas natural resources. In fiscal 1972, collections from natural resource fees totaled less than $1 million. In 2018, these fees gener- ated $231.5 million—representing 3.6 percent of total state fee collections—yielding an average annual growth rate in revenue of 14.2 percent. Parks and wildlife fees include game, fish, and equip- or trapping in Texas. Most of the revenue is from sales of fishing and hunting licenses (about 55 percent in 2018). In 1972, receipts from these fees totaled $5.8 million. In 2018, they reached $103.2 million, a 6.4 percent average annual growth rate. These fees are dedicated for the administration and enforcement of game, fish, and water safety laws and wildlife management. The Legislature increased the rates for these fees four times between 1973 and 1983. Since September 1985, the Texas Parks and Wildlife Commission has authority to set the fee rates by rule, and the Commission has done so several times. Texas Comptroller of Public Accounts – January 2019 31 Sources of Revenue State parks entrance fees for more than 90 of Texas’ Between 1972 and 2018, collections increased by an state parks are set at the Texas Parks and Wildlife Depart- average of 12.4 percent each year. Much of this growth is In 2018, they generated $50.6 million, for an average annual 1980s and 1990s and to new health care facilities fees. ment. In 1972, receipts from these fees totaled $1.8 million. growth rate of 7.5 percent. attributable to the environmental health fees enacted in the Health care facilities fees are imposed for licensing a wide range of medical and other types of health care facil- Education Fees Education fees consist primarily of higher education tuition. In fiscal 1972, total education fees generated $33.2 million and accounted for 11 percent of all state fees. In 2018, education fee collections had increased to $1.23 billion, or 19.1 percent of all state fee collections. Educa- tion fee collections increased by an average of 8.2 percent annually. Higher education tuition revenues are dedicated for the ities. Previous to the passage of a quality assurance fee by the Legislature in 2001, total annual health care facilities fee revenue was less than $7 million. Quality assurance fee revenue resulted in total facility fee collections of $25.2 million in 2002. By 2018, health care facility fee collections were $79.2 million, an average annual growth rate of 17.4 percent, to become the top revenue source in the health fee category. Health-related professional fees include registration operation and maintenance of Texas public colleges and fees for over 20 professions tied to medical and health ser- reached $1.18 billion in 2018, an average annual growth rate they generated $35.0 million, an annual average growth rate universities. Tuition fees totaled $30 million in 1972 and of 8.3 percent. Before 2003 the Legislature set tuition rates by law for all higher education institutions. The 78th Legislature passed HB 3015, effective September 1, 2003, which dereg- vices. In 1972, they produced less than $1 million. In 2018, of 10.3 percent (See Appendix E for a listing of the occu- pations assessed a state professional fee and the associated rate limitations.) One factor contributing to the growth in health fee ulated the tuition rates that could be set by governing boards revenue had been the $200 fee increase on selected health Legislature. Universities began increasing designated tuition repealed by the 84th Legislature (2015), previously dis- of public universities above the base tuition rate set by the in the spring of 2004. Since the 2005-06 school year, the base tuition rate for an undergraduate semester credit hour for state university courses for resident students has been set by the Legislature at $50. Revenue from the base tuition is deposited to the institutions’ current funds. Health Fees Health fees are associated with the medical profession and environmental health. They include health-related pro- professions, enacted by the 72nd Legislature (1991) and cussed in the Business Regulation section with respect to the $200 surcharge on non-health professional occupations. Medical Examination and registration fees are collected for registering, licensing, and examining doctors, nurses and other medical professionals. In fiscal 1972, less than $1 million in these fees were collected. By 2018 that amount had grown to $43.1 million, an average annual growth rate of 10.7 percent. The waste disposal facilities, generators, and trans- fessional fees, health care facilities fees, waste disposal fees, porters fees were enacted by the Legislature in 1985 and cellaneous fees. In fiscal 1972, health fee collections were hazardous, solid, oil and gas, or industrial waste. Additional medical examination and registration fees, and other mis- $1.3 million, less than 1 percent of all state fee collections. In 2018, collections were $286.9 million, 4.5 percent of all state fee collections.  are assessed on the storage, transportation, or disposal of permit fees are charged for sewage, and landfill facilities. In 2018, fee collections were $53.7 million, compared to 1986 collections of $4 million, an average annual growth rate of 8.4 percent. These fees are statutorily-dedicated for the permitting, administering, and enforcement of various waste Texas Comptroller of Public Accounts – January 2019 32 Sources of Revenue disposal programs, and facility cleanup and maintenance of the entire Other fees category. These are levied on those ronmental Quality and Texas Railroad Commission. including certain civil cases. Most of these fees are ded- programs administered by the Texas Commission on Envi- Other Fees This group includes a large number of varied fees and other charges associated with property, insurance, utilities, tobacco, alcohol, welfare, agriculture, courts, and others. convicted for a variety of felony and misdemeanor offenses, icated for a specific purpose related to criminal justice programs. The first court fine was established in 1892 for contempt of court, allowing the levy of a fine of up to $500, with the collections deposited to General Revenue. City Sales Tax service fees associated with the collec- All of these revenue items, grouped here as “other fees,” tion and allocation of local sales taxes (i.e., the local-option had increased to $1.39 billion by 2018, an average annual $5.8 million in fiscal 1975. In 2018, service fee revenue was totaled $54.4 million in 1972. The category revenue total growth rate of 7.3 percent. In fiscal 2018, court costs ($234.0 million) and court fines ($75.2 million) account for approximately 22 percent counterparts to the state’s Limited Sales and Use tax) totaled $117.7 million, an average annual increase of 7.3 percent. This is a 2 percent administrative fee collected on local sales taxes remitted to the state. µ Texas Comptroller of Public Accounts – January 2019 33 Sources of Revenue Texas Comptroller of Public Accounts January 2019 34 State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Legislative Changes and Other Sources of Growth Pre-1972 increased following each price hike, economic activity mul- recurring pattern of budget crises followed by tax increases. $60 million in Sales and Use, Franchise, Natural Gas, and Throughout most of the 1950s, Texas experienced a In an attempt to break the cycle, the 57th Legislature, First Called Session, enacted a state Sales and Use tax in 1961. tiplied throughout the economy, generating an additional other tax receipts. The new revenues allowed the Legislature to increase HB 20 established a limited Sales and Use tax, with a rate agency budgets and fund new programs and services. years, however, proved insufficient to meet the state’s personal income and state tax collections each averaged 14 pegged at 2 percent. Revenue growth during the ensuing expanding needs. Within the next nine years the Legislature returned to the Sales and Use tax four times, either to raise the rate or to broaden the base. The Legislature churned out tax bills in 1963, 1965 (Cigarette and Inheritance taxes only), 1967 (Franchise tax only), 1968, 1969, and 1971. During the 1972-82 period, the annual growth rates for state percent. Texas’ economic prosperity drew new workers and their families from around the nation. This influx spawned demands for even more state spending, particularly for highways and schools. The oil boom allowed the Legislature to enjoy a remark- As 1971 drew to a close, the Sales and Use tax rate stood able 11-year period — from 1972 until 1983 — without the 60th Legislature SJR 32, a constitutional amendment did adopt one new tax — the Public Utility Gross Receipts at 4 percent — double its original rate. However, during to gradually reduce the state’s Ad Valorem tax (property), was passed and voters adopted the amendment by general election in 1968. imposing a major tax hike. Although the 64th Legislature assessment — in 1975 by passing HB 819 to support the newly-established Public Utility Commission’s regulatory activities, HB 546 abolished the Express Company tax, lowered the Cigar tax, eliminated the Franchise tax surtax, 1972 – 1982 Considering the budget turbulence that preceded it and the oil boom that followed, the 1972 budget year presents a paradigm of stability. From 1972 onward, escalating oil pric- es and vigorous economic growth (not to mention inflation) and struck debt from the Franchise tax base. Between 1973 and 1977, the state Ad Valorem (property) tax rate dropped by more than half, due to the adoption of SJR 32 by voters in 1968. In 1978, Governor Dolph Briscoe reconvened the 65th generated substantial increases in the state’s tax receipts. At Legislature for a Second Called Session to cut the state’s a $40 million “windfall” in Oil Production tax revenues. ation and spending limits. That special session produced the boom’s peak, a $1 increase in oil prices would induce The effect did not remain isolated to a single tax: natural gas prices rose with the price of oil and as drilling activity budget surplus by reducing certain taxes and enacting tax- HB 1 and HJR 1, the first major tax reduction legislation in modern Texas history. Texas Comptroller of Public Accounts – January 2019 35 Sources of Revenue HB 1 reduced the Sales and Use tax base and lowered the Inheritance tax. The bill exempted residential gas and electric services from the state Sales and Use tax base and extended the exemption to local tax bases (unless local several times, precipitating a drastic retail sales slump along Texas’ border. Unemployment increased and Sales and Use tax collections plummeted. Despite the first serious decline in severance tax reve- authorities voted to retain those services in their tax base). nues since the 1960s, the Legislature increased spending by nues by $101 million in 1979. HB 1 also reduced Inheri- authorization to spend available fund surpluses, and, most The new exemption reduced state Sales and Use tax reve- tance tax collections by establishing a $200,000 per estate exemption, scheduled to increase to $250,000 in 1982 and to $300,000 in 1985. This provision, which became effective at the beginning of fiscal 1979, reduced Inheritance tax revenues by $13.2 million in 1979 and $36.7 million during 16 percent through the enactment of various fee increases, importantly, passing of six bills designed to shift or “speed- up” tax collections to earlier collection dates. The speed-up legislation generated one-time gains totaling $21.7 million in 1983 and $412.6 million for the 1984-85 biennium. SB 713 restructured the payment schedule for the Motor the 1980-81 biennium. (Three years later, during the 67th Vehicle Sales and Use tax. The bill required counties to for- piggy-backed the state Inheritance tax onto the federal annual collections exceeding $10 million), weekly (between Legislative Session, the Legislature enacted HB 325, which inheritance tax, making it equal to the federal credit.) HJR 1, approved by voters in November 1978, provid- ed more state Ad Valorem tax relief. Among other measures, the amendment removed intangibles from the tax base and provided a $5,000 homestead exemption and other exemp- tions for non-income-producing personal property and ward their collections to the State Treasury on a daily (for $2 million and $10 million), or monthly (under $2 million) schedule. Previously, all counties submitted their collections on a monthly basis. This speed-up, effective September 1983, generated a $13.8 million one-time gain for the 198485 biennium. SB 985 advanced the due date for filing Sales and Use household goods. HJR 1 also placed a cap on state spending tax receipts to the 20th day of the month following the end economy,” as determined by the Legislature. last day of the month following the end of the reporting growth, limiting it to the “estimated growth of the state’s Four years later, during the Second Called Session of the 67th Legislature (1982), the Legislature took state property tax relief one step farther and sent the voters a new HJR 1 — a proposed constitutional amendment to abolish the state Ad Valorem tax. Voters adopted the amendment in November 1982. 1983: The 68th Legislature, Regular Session When the Legislature convened for its 68th Legislative Session in January 1983, it faced unfamiliar circumstances. After 22 years of uninterrupted growth, severance tax revenues were beginning to fall. Two years before, they account- ed for 28.3 percent of state tax receipts; by 1983, their share had fallen to 26.5 percent. In 1982, Oil Production tax revenues peaked at $1.3 billion; the following year they fell to $1.2 billion — a 9.6 percent decline. Compounding the problem, in 1982 and 1983 Mexico depreciated the peso of the reporting period. Previously, taxpayers had until the period to remit their collections. This speed-up, effective October 1983, generated a $168.6 million one-time gain for the 1984-85 biennium. SB 986 advanced the payment due date for the Public Utility Gross Receipts assessment to August 15 from August 31. This speed-up made an additional $14.7 million available for spending in 1983. SB 987 accelerated the payment due date for the Insur- ance Premium taxes in 1984 and established a quarterly pre- payment schedule to supersede the former annual payment requirement. This bill also increased the tax rate applicable to foreign (those domiciled out-of-state) life, accident and health insurers; but HB 122, enacted the following year, muted the bill’s fiscal implications. The speed-up, effective August 1984, produced a $143.8 million one-time gain for the 1984-85 biennium. SB 988 advanced by 10 days the August monthly due date for the Oil Production, Natural Gas Production, and Texas Comptroller of Public Accounts – January 2019 36 Sources of Revenue Motor Fuels taxes. Payments formerly due on August 25 became payable on August 15. Also, before the Legislature enacted SB 988, Natural Gas Production taxpayers calcu- lated their monthly tax liability on the volumes produced during the previous two months. SB 988 required Natural Gas Production taxpayers to remit tax payments for July production by the August due date in odd-numbered years. This meant that, henceforth, odd-numbered years would show 13 monthly tax payments while even-numbered years would show only 11 monthly payments. These speed-ups, which became effective for August 1985 tax payments, produced an $89.9 million one-time gain in 1985. HB 2108 accelerated Cigarette tax collections by requiring full payment by August 31 in the second year of the biennium for all tax stamp credit purchases executed on or before August 16 of that year. This change, effective August 1983, produced a $7 million one-time gain in 1983 but a $3.5 million loss for the 1984-85 biennium. Finally, HB 1122 abolished several minor occupation taxes relating to pistol dealers, billiard table owners or opera- tors, ship brokers, quotation services and brokers and factors. 1984: The 68th Legislature, Second Called Session Governor Mark White reconvened the 68th Legislature for a Second Called Session in June 1984 to finance the public education improvements required by HB 72 and the construction necessary to rebuild and expand the state’s highway system. The special session produced HB 122, the state’s first major tax bill since 1971. HB 122 became effective October 2, 1984 and affected almost every major state tax group other than severance taxes. The bill raised the Sales and Use tax rate to 4.125 percent from 4 percent. It also expanded the Sales and Use tax base to include: • cigarette and tobacco sales; • cable TV service; • auto parking and storage; • laundry and dry-cleaning services; • amusement admissions; • computer software (pre-programmed); • newspaper and magazine subscriptions (semiannual or longer exempted in 1987); • over-the-counter newspaper sales (also exempted in 1987); • repair of tangible personal property (excluding auto); • home fertilizer; and • vending machine sales of ready-to-eat food. HB 122 also increased the Motor Vehicle Sales and Use tax and the Motor Vehicle Rental tax rates to 5 percent from 4 percent, effective August 1984. It doubled the Motor Fuels tax rates from 5 cents to 10 cents per gallon, effective August 1984. The bill bumped the Franchise tax rate up by a dollar to $5.25 per $1,000 of taxable capital and surplus, effective for tax reports due in fiscal 1985. It raised the Hotel Occupancy tax from 3 percent to 4 percent, effective October 1984; and it doubled the Coin-Operated Machine tax from $15 to $30, effective October 1984. HB 122 increased the various Alcoholic Beverage tax rates by 20 percent and raised the Cigarette tax by two cents over a two-year period. Formerly set at 18.5 cents per pack, the Cigarette tax rose to 19.5 cents per pack, effective October 1984, then to 20.5 cents, effective September 1985. The bill also broadened the Cigar and Tobacco Products tax base to include snuff. With respect to Insurance Premium taxes, HB 122 revised certain foreign/domestic provisions, revised the retaliatory tax calculation methodology (subsequently repealed by HB 1421 in 1989), and eliminated the exemption for first-year premiums. The bill placed banks under the Franchise tax, eliminated the Ad Valorem tax on bank stock, and increased Motor Vehicle Registration fees. Finally, the bill raised Higher Education Tuition fees for non-resident and foreign students. HB 122 produced tax revenue gains totaling $1.2 billion (with $350 million dedicated to highways) in 1985 and $2.6 billion (with $750 million dedicated to highways) for the 1986-87 biennium. 1985: The 69th Legislature, Regular Session When the 69th Legislature convened in January 1985, the new revenues generated by HB 122 and an expanding state economy appeared sufficient to get the state through Texas Comptroller of Public Accounts – January 2019 37 Sources of Revenue the next biennium without a major tax bill. However, under Session, convened by Governor Bill Clements on June 22, service levels and to finance an employee pay raise and indi- 62, which increased taxes by $6.1 billion for the 1988-89 pressure to maintain higher education funding at current gent health care, the Legislature enacted HB 1593, which hiked tuitions, licenses and other fees. Also, the Telecommu- nications Act, HB 1949, transferred a major portion of the resolved the standoff and enacted two bills, HB 61 and HB biennium. Combined, the two bills represented the largest tax hike in any state’s history up to that time. HB 61 raised the Sales and Use tax rate to 6 percent, Telephone Company tax base to the Sales and Use tax base effective October 1987, and allowed the temporary 5.25 per- October 1, 1985. During this session, the Legislature also to carry over until the new rate became effective. and abolished the Telegraph tax. HB 1949 became effective passed HB 2359, which enacted the first Waste Disposal Facilities, Generators and Transporters fees. 1986: The 69th Legislature, Third Called Session The state’s revenue outlook grew cloudy in January 1986, when oil prices took another nosedive. By July, prices for some grades of oil had fallen below $10 per barrel, and the state plunged into a severe economic recession. The ensuing slide in severance and other tax revenues threatened to throw the state budget into serious deficit, with a shortfall projected to reach as deep as $2.9 billion. Following two unsuccessful special sessions, Governor White brought the Legislature back for a Third Called Session that September. This time the Legislature bridged the projected revenue gap by cutting back appropriations and imposing a temporary tax increase. The Legislature also authorized the state to issue “cash management notes” (short-term bonds) as a device for covering temporary cash shortfalls. HB 79, the new tax legislation, became effective January 1, 1987. The bill provided for two temporary tax increases, each set to expire on August 31, 1987. It raised the Sales and Use tax by 1.125 percentage points to 5.25 percent; and it raised Motor Fuels taxes by a nickel, to 15 cents per gallon. These increases generated a $791 million gain in 1987 (with $212 million dedicated to highways) and a $111 million “spillover” gain (with $31 million dedicated to highways) in 1988. cent rate, scheduled to revert to 4.125 percent on September 1, HB 61 also expanded the Sales and Use tax base to include: • custom software; • for-profit country club memberships; • credit reporting and debt collection services; • certain insurance, information, and real property services; • security services; • data processing services; and • real property repair and remodeling. The bill generated additional Sales and Use tax revenue by revising the provisions governing discounts and exempt sales. For example, it reduced the “timely filer” discount and redefined the “commercial use” of gas and electricity to include the amounts used for the storage or preparation of food for immediate consumption. HB 61 also raised the Motor Vehicle Sales and Use tax rate to 6 percent from 5 percent, effective October 1987. It increased the Hotel Occupancy tax rate to 6 percent from 4 percent, effective September 1987. It increased the Cigarette tax by more than a nickel from 20.5 cents to 26 cents per pack, effective October 1987; and it boosted the Cigar and Tobacco Products tax rates for snuff and for chewing and pipe tobacco to 28.125 percent, also effective October 1987. HB 61 repealed what remained of the Telephone Com- pany tax (and shifted most of its base to the Sales and Use tax), created the Administrative Services tax (at 2.5 percent of insurance administration revenues, effective September 1987), and imposed several temporary taxes and fees, each 1987: The 70th Legislature, Second Called Session The 70th Legislature concluded its regular session June 1, 1987 without writing a state budget. The Second Called designed to lapse after two years. (The Administrative Ser- vices tax was subsequently challenged in court and held to be in conflict with federal law in 1991.) HB 61’s temporary provisions included raising the Franchise tax from $5.25 to $6.70 per $1,000 of taxable Texas Comptroller of Public Accounts – January 2019 38 Sources of Revenue capital and surplus, effective for 1988 and 1989 reports. The challenges but released considerable cash reserves held in on all insurance premiums (effective for premiums written HB 1306 increased 1990-91 Franchise tax receipts bill also imposed a 20 percent Insurance Premium surtax suspense or as a contingency against possible refunds. during calendar years 1987 and 1988) and a $110 annual available to the state by $208.4 million by resolving two Professional fees by $110, effective only for the 1988-89 focused on whether pre-acquisition earnings belonged in Attorney Licensure tax. Likewise, HB 61 raised various biennium. Finally, HB 61 granted a Sales and Use tax exemption for manufacturing machinery and equipment, phased-in over five years. (The 70th Legislature originally scheduled this exemption to become effective for sales on or after January 1, 1991; but in 1991 the 72nd Legislature delayed implementation of the exemption in HB 11.) HB 62, the other tax bill, made permanent the five-cent Motor Fuels taxes increase, originally enacted as temporary by the 69th Legislature, Third Called Session in 1986 (HB 79). The HB 61 and HB 62 tax hikes generated an extra $6.1 billion (with $713 million dedicated to highways) for the 1988-89 biennium. 1989: The 71st Legislature, Regular Session The 71st Legislative Session convened January 1989, following the Comptroller’s forecast that the 1988-89 bien- nium would end with a small surplus. Unfortunately, the excess funds did not appear sufficient to bridge the budget gap projected for the 1990-91 biennium. The temporary tax and fee hikes that the Legislature adopted as short-term solutions during the previous session imposed a budget dilemma for the next session. If kept in place, they would generate some $600 million during 1990-91; allowing them legal controversies surrounding the tax. One question the tax base. Following a successful lawsuit challenging the inclusion, the Legislature enacted HB 1306, which redefined the tax base to specifically include such earnings. The sec- ond question involved the tax code apportionment formula used by firms conducting business outside Texas. HB 1306 eliminated the Franchise tax law provision that gave taxpayers the option of using a three-factor apportionment formula (based on sales, payroll and property), thereby forcing all taxpayers to use the single-factor formula based on gross receipts. The Legislature enacted two bills to resolve legal chal- lenges brought by “foreign” insurers (i.e., those domiciled in a state other than Texas) against the state’s Insurance Premium taxes. HB 1421 repealed the provisions in HB 122 (68th Legislature, Second Called Session, 1984) relating to retaliatory taxes owed by foreign property and casualty insurers. Following a successful lawsuit by one large insur- er, the bill permitted foreign insurers to use the state’s basic tax rate to calculate their tax liability. To compensate for the reduced retaliatory tax, HB 1421 raised the minimum rate from 1.2 percent to 1.6 percent and raised the rate paid by unauthorized and surplus lines carriers from 3.85 percent to 4.85 percent. The bill also granted insurers organized as reciprocal exchanges an optional 1.7 percent flat tax rate. HB 1954 resolved a legal dispute between the state and to lapse as scheduled at the end of fiscal 1989 meant that the life, accident and health insurers. This involved the stag- or impose other new taxes. entities. The tax rates varied from 1.1 to 2.5 percent, with Legislature would have to cut spending by the same amount This time the Legislature managed to cover the potential budget shortfall and avoid a tax increase (or extension) by adopting various accounting measures and resolving several legal challenges. In what had grown into a major problem during the 1980s, several large taxpayer groups — insur- ance, franchise, and gas utilities — brought court actions contesting the state’s tax laws. The Legislature responded by enacting “clean-up” legislation that not only addressed legal gered tax rate schedule applicable to domestic and foreign the lower rates for firms with higher proportions of their investments in Texas. Several insurers complained that the investment requirements discriminated against foreign insurers. As a compromise, the Legislature offered to phase- out the existing rate structure over several years, with a flat 1.75 percent tax rate to become effective for 1995 calendar year premiums. For their part, the insurers relinquished any claims for taxes paid under protest and dropped their law- Texas Comptroller of Public Accounts – January 2019 39 Sources of Revenue suit. Together, HB 1421 and HB 1954 increased Insurance reduced Oil Production tax rate for EOR projects under HB biennium. 1989. The accelerated effective date extended the period Premium tax revenues $141 million during the 1990-91 HB 2945 redefined the tax base for the Gas Utility Pipeline tax. One major taxpayer had challenged the tax, which used gross receipts as its base. The bill redefined the tax base as gross income and doubled the tax rate from 0.25 percent to 0.5 percent to compensate for the base loss. HB 24 created the Controlled Substances tax and fine, set at $3.50 per gram of marijuana with a 4 ounce minimum 428, 71st Regular Session, from January 1, 1990 to July 1, in which the reduced tax rate would be available by six months, to four and one-half years. The net effect was to provide $348,000 in tax relief for the 1990-91 biennium. 1989: The 71st Legislature, Second Called Session In November 1989, Governor Clements announced a and $200 per gram for other controlled substances with Second Called Session of the 71st Legislature to complete required tax stamps upon discovery became subject to a tion reform. The resulting legislation, SB 1, eliminated the a 7 gram minimum. Covered substances not bearing the fine. This tax, which became effective in fiscal 1990, raised $300,000 during the 1990-91 biennium and $800,000 during the 1992-93 biennium. (In 1991 the Legislature adopted HB 2595, which extended the tax to controlled substances not sold by weight. The new tax stamp cost $2,000 per 50 dosage units.) HB 428 reduced the Oil Production tax rate to 2.3 per- cent from 4.6 percent for all oil produced in a certified new project using Enhanced Oil Recovery (EOR) techniques. Similarly, SB 963 provided an exemption under the Natural Gas Production tax for gas produced by certain “high-cost” wells. The Legislature made the exemption effective for a 10-year period beginning September 1, 1991. the work of the preceding session on workers’ compensa- Industrial Accident Board and created two new entities: the Texas Workers’ Compensation Commission and the Texas Workers’ Compensation Research Center (since abolished). To fund the commission, SB 1 increased the Workers’ Compensation Commission Maintenance tax rate. The bill also created a new Workers’ Compensation Research Cen- ter Maintenance tax to provide the center its own funding source. These measures produced an additional $10.7 million in 1990 and $35.2 million in 1991. 1990: The 71st Legislature, Sixth Called Session Following the State Supreme Court’s Edgewood v. HB 2619 implemented a second Cigarette tax speed- Kirby decision, which declared the state’s public education full payment for stamps by the close of the biennium. This convened the Legislature four times between February and up by requiring all credit purchasers of tax stamps to remit bill, effective August 1991, generated $24 million for fiscal 1991. Finally, HB 112 sped up the effective date of the Sales and Use tax manufacturing exemption for machinery and equipment with a useful life of more than six months, making it applicable for property purchased during 1990. financing mechanism unconstitutional, Governor Clements June 1990. The last session, the Sixth Called Session of the 71st Legislature, produced three revenue bills to finance public school reform and certain short-term budget demands faced by the Department of Human Services and other agencies. HB 4 increased the fee for duplicate driver licenses and 1989: The 71st Legislature, First Called Session identification cards from $5 to $10. HB 5 raised the fees for Called Session of the 71st Legislature to reform the state’s from 6 percent to 6.25 percent; the Cigarette tax from 26 cents In June 1989, Governor Clements announced the First workers’ compensation insurance program. As the session progressed, the call was opened to other topics. Among the legislation passed, HB 40 changed the effective date of the oversized and overweight transport vehicles. HB 6, which became effective July 1990, increased the Sales and Use tax to 41 cents per pack; the Cigar and Tobacco Products tax from 28.125 percent to 35.213 percent; and the Mixed Bever- age tax from 12 percent to 14 percent. HB 4 and HB 5 raised Texas Comptroller of Public Accounts – January 2019 40 Sources of Revenue $14.7 million for the 1990-91 biennium and $29.8 million for the 1992-93 biennium. HB 6 raised $576 million for the 1990-91 biennium and $1.1 billion for the 1992-93 biennium. 1991: The 72nd Legislature, Regular Session In January 1991, the Comptroller’s 1992-93 Biennial Revenue Estimate indicated that even though available rev- enues collected during the 1992-93 biennium would exceed revenues for the previous biennium by $1.9 billion, they would fall $4.8 billion below the current services budget laid out by the Legislative Budget Board (LBB). Rather than attempt to write a budget under such con- straints, the Legislature directed the LBB to audit the state’s budget and spending procedures and submit its findings to the Governor by July 1, 1991. The audit, which the LBB assigned to the Comptroller’s office, was called the “Texas Performance Review” (TPR). As expected, the 72nd Legislative Session adjourned without completing a state budget. It did, however, produce a number of tax-related bills. SB 1105 reduced the Oil Pro- duction tax rate to 2.3 percent for incremental production from the expansion of EOR projects in existence before September 1, 1989. This provided short-term tax relief that totaled $13.5 million for the 1992-93 biennium. HB 2, an insurance reform bill, expanded the base for the Office of Public Insurance Counsel (OPIC) assessment and reduced the proportion of guaranty fund assessments that insurers could claim as a credit against their Insurance Premium tax liability. These provisions produced $2.6 million in new revenue for the 1992-93 biennium. HB 278 created the Texas Limited Liability Company Act and extended the Franchise tax base to include limited liability companies. HB 640 created the Automobile Theft Prevention Authority and established an Automobile Theft Prevention Authority fee of $1 per insured motor vehicle year to fund the authority. The new fee produced $17.1 million for the 1992-93 biennium. HB 651 clarified and tightened the exemptions relating to the Hotel Occupancy tax; it generated $440,000 in 1993. Finally, HB 1986 enacted the Battery Sales fee and SB 14 enacted the Coastal Protection fee. 1991: The 72nd Legislature, First Called Session Upon receipt of the TPR report, Governor Ann Rich- ards reconvened the Legislature in a First Called Session to write the state’s budget for 1992-93. The session’s principal budget-related efforts involved three bills: HB 11, the tax and fee bill; SB 3, the fiscal management bill; and HB 54, the state lottery bill. HB 11 included 29 separate changes affecting fees or taxes and made an extra $2.1 billion available for the 199293 biennium. The biggest change involved the Franchise tax. As discussed previously, this tax, formerly levied at a rate of $5.25 per $1,000 in taxable capital and surplus, had suffered considerable base erosion due to court challenges — to the point where the state was refunding as much as half of its gross collections. The state’s major business tax had become an unpredictable, unreliable and inefficient revenue source. HB 11 sought to remedy the problem by splitting the tax base into two components, taxable capital and “earned surplus,” the latter defined as federal taxable income (before any net operating loss deductions), with officer and director compensation added back into the base. In effect, the new bill required taxpayers to pay the higher of either the tax on capital, set at $2.50 per $1,000 in taxable capital, or the tax on earned surplus, set at 4.5 percent of earned surplus. In addition to restructuring the Franchise tax, HB 11 continued the trend toward gradually expanding the Sales and Use tax base. The bill added as taxable packaging, telephone answering services, non-profit country club membership fees, amusement ticket sales by non-profit organiza- tions, and personal property used to improve realty owned by certain exempt entities. It removed boat and boat motor sales from the Sales and Use tax base and placed them under a separate Boat and Boat Motor Sales and Use tax, also levied at 6.25 percent. HB 11 delayed implementing the partial Sales and Use tax exemption for manufacturing machinery and equipment, as originally called for by HB 61 in 1987. Instead of allow- ing all businesses to qualify for refunds or reduced Sales and Use taxes for eligible purchases in 1992-93, HB 11 autho- rized Franchise taxpayers to claim a credit for a portion of Texas Comptroller of Public Accounts – January 2019 41 Sources of Revenue their Sales and Use tax payments for purchases of qualifying machinery and equipment. The bill, however, required firms to wait until fiscal 1994 before claiming the credits. HB 11 increased the Motor Vehicle Sales and Use tax from 6 percent to 6.25 percent, putting it on parity with the “general” Sales and Use tax rate; increased the Bingo Gross Receipts tax; and created a higher, 10 percent tax rate for Motor Vehicle Rentals for 30 or fewer days. HB 11 also pushed the Gasoline and Diesel Fuel tax rates up another nickel — from 15 cents to 20 cents per gallon. Finally, HB 11 increased Professional fees paid by such occupations as physicians, dentists, optometrists, psychologists, chiroprac- tors, veterinarians, architects, real estate brokers, engineers and security dealers by $200; levied a separate $200 annual Attorney Occupation tax on active attorneys; increased Motor Vehicle Driver Record, General Business Filing, Court Cost and various other fees; and enacted the Bingo Rental tax and Bingo Prize fee. SB 3, the fiscal management reform bill, consolidat- ed many general operating and disbursement funds into the General Revenue Fund 0001, increased Motor Vehicle Certificate of Title fees from $10 to $13, and delayed the August Motor Fuels taxes allocation until September. It also replaced the county Motor Vehicle Sales and Use tax allocation with a portion of Motor Vehicle Registration fees, effective January 1992. HB 54, along with voter approval on November 5, 1991 of an amendment to the Texas Constitution, established a State Lottery. Texans bought their first tickets on May 29, 1992. Operated by the Comptroller’s office through 1993, the lottery generated net state revenues totaling $812.3 mil- lion — $307 million above expectations — during the 199293 biennium. Record-setting sales and the efforts by the Comptroller’s office to start both instant ticket and on-line sales well ahead of schedule accounted for the higher than expected sales. In total, HB 11, SB 3, HB 54, and other miscellaneous revenue generating bills made available $3.6 billion in tax revenue, fees and lottery proceeds to balance the state’s 1992-93 budget. 1993: The 73rd Legislature, Regular Session In January 1993, the Comptroller’s Biennial Revenue Estimate for 1994-95 projected that state revenues available for general purpose spending would increase by $1.8 billion over the previous biennium to $36.4 billion. This represented a 12.3 percent growth rate — the smallest increase since 1988-89. Among this session’s major tax legislation, three bills — SB 82, SB 83, and HB 1461 — involved the speed-up of tax collections. SB 82 affected three major taxes: Sales and Use tax; Franchise tax; and Hotel Occupancy tax. Subject to waiver by the Comptroller, SB 82 required monthly Sales and Use tax electronic filers who received a payment for sales made between August 1 and August 15 to remit that tax by August 20. This would have become effective September 1994 and expired January 1996. However, the Comptroller subsequently waived this provision; thus, it never took effect. For Franchise taxpayers, SB 82 advanced the annual liability reconciliation date to August 15 (from November 15). This speed-up affected only taxpayers required to pay electronically and became effective for the 1995 report year. The bill also required Hotel Occupancy taxpayers to remit their collections on the same schedule as Sales and Use tax payments, effective October 1994. SB 82 increased tax revenues by $141.7 million during the 1994-95 biennium. The new revenues involved $34.8 million in Sales and Use tax receipts (including $21.6 million in TPR-related enhanced enforcement measures), $106.9 million in net Franchise tax receipts, and $12 million in Hotel Occupancy tax receipts. SB 83 provided an additional $17.4 million revenue gain for the 1994-95 biennium by requiring Public Utility Gross Receipts assessment payers to remit one-half of their estimated 1995 taxes (normally due on August 15, 1995) with their August 15, 1994 payment and to remit the remaining portion on February 15, 1995. HB 1461 transferred the authority to collect Insurance Premium, Maintenance, and other insurance-related taxes to the Comptroller’s Office from the Department of Insurance. The bill also changed Insurance Premium tax prepayment due dates from a quarterly (March, May, August and Texas Comptroller of Public Accounts – January 2019 42 Sources of Revenue November) schedule to a semiannual (March and August) Major tax-related bills enacted during the 74th Legis- schedule. This provision, effective March 1994, effectively lature included SB 3, which repealed the Interstate Motor would have collected in November 1994 (fiscal 1995). HB to the Public Utility Gross Receipts assessment; HB 398, increased fiscal 1994 remittances by the amount the state 1461 generated one-time revenue gains of $105 million for fiscal 1994. The Legislature also enacted one tax increase relating to certain insurance purchases. HB 958 revised the statutes relating to surplus lines insurance and implemented a uni- Carrier tax, effective September 1, 1997; HB 2128, relating which provided Natural Gas Production tax incentives for high-cost gas; HB 462, which made the Sales and Use tax applicable to purchases by prison inmates; and HB 2129, which concerned the Hotel Occupancy tax. HB 2128 provided for an extension of the speed-up pro- form 4.85 percent rate for eligible surplus lines carriers. In vision enacted by the 73rd Legislature in SB 83. SB 83 had the Boat and Boat Motor Sales and Use tax base; and HB remit one-half of their estimated 1995 taxes (normally due other tax-related legislation, HB 1970 effectively expanded 2771 eliminated the state and local Bingo Gross Receipts tax and raised the Bingo Prize fee. In addition, the Legislature passed several Oil Pro- duction and Natural Gas Production tax bills designed to encourage drilling and production. HB 1974 established a tax credit system for persons drilling new-field discovery wells, conditional upon the total number of new discovery wells in the state reaching specific target levels. HB 1975 provided a 10-year exemption from Oil Production and Natural Gas Production taxes for production from wells that required Public Utility Gross Receipts assessment payers to on August 15, 1995) with their August 15, 1994, payment and to remit the remaining portion on February 15, 1995. Essentially, this provided a year and a half’s worth of tax revenue in fiscal 1994. The provision was to expire in fiscal 1997. HB 2128 delayed the expiration date by one year, thereby allowing a year’s worth of revenue to be collected in fiscal 1997, but only one-half of a year’s worth to be collected in fiscal 1998. The delay provided a one-time gain of $18.3 million for the 1996-97 biennium. HB 2128 also established the Telecommunications had been inactive for three or more years. HB 2723 expand- Infrastructure Fund, to be supported by the Telecommunica- tax rate) EOR projects. These three bills became effective on annual assessment was to be set by the Comptroller at two ed the definitions of (tax exempt) high-cost gas and (reduced September 1, 1993. SB 466, effective on January 1, 1994, extended the application period for obtaining certification as an EOR project. By design, any tax losses associated with the four energy bills would not occur until 1996; thus, they had no effect on 1994-95 revenues. Losses for the 1996-97 biennium totaled $66.4 million. tions Infrastructure Fund (TIF) assessment. As enacted, the separate rates that would generate $75 million annually from telecommunications utilities and another $75 million from commercial mobile service providers. Because of a success- ful legal challenge concerning the dual rate structure, the assessment brought in $191.4 million for the 1996-97 biennium — roughly $100 million less than originally intended. HB 398 extended and modified the Natural Gas Pro- 1995: The 74th Legislature, Regular Session duction tax reduced rate program for high-cost gas wells. Estimate for 1996-97 projected that the state would have reduced tax rate for a 120-month period from the date of In January 1995, the Comptroller’s Biennial Revenue $46.9 billion available for general purpose spending — a $7.8 billion increase over the amount certified as available for the 1994-95 appropriation. (Of this amount, $3.3 billion came from previously dedicated revenue, and $4.5 billion came from sources used to certify 1994-95 appropriations.) Qualifying wells spudded or completed after August 31, 1996 and before September 1, 2002, became eligible for a first production. The bill provided a rate reduction program based on the ratio of reported drilling and completion costs per well to an amount equal to twice the value of the median drilling and completion costs for all wells for which appli- cations had been filed for the year. Because the benefits of the reduced rate program would not become available until Texas Comptroller of Public Accounts – January 2019 43 Sources of Revenue fiscal 1998, there were no revenue losses for the 1996-97 tax relief. The increase in the exemption became effective biennium were estimated at $32.2 million. The inclusion allowable prize payout for the state lottery and dedicated the biennium associated with the bill. Losses for the 1998-99 of prison inmate purchases in the Sales and Use tax base, as enacted by HB 462, added another $1.5 million for the 1996-97 biennium. for the 1997 tax year. HB 4 also established a cap on the unobligated lottery balance (which had previously been allocated to General Revenue) to the Foundation School Fund. HB 966 (with the same language repeated in HB 2542) HB 2129 amended the procedure for exempting gov- expanded the Boat and Boat Motor Sales and Use tax base Pursuant to the change, revenues for the 1996-97 biennium legislation, effective September 1, 1997, produced an esti- ernment entities from payment of the Hotel Occupancy tax. increased by $3.2 million. SB 60 enacted the Concealed Handgun fees. SB 401 enacted a TPR recommendation and to include commercial boats 65 feet or less in length. This mated $654,000 for the 1998-99 biennium. HB 1200 was a partial response to a TPR proposal granted the Comptroller increased enforcement capabilities to provide a “lifetime” motor vehicle driver license and collections for the 1996-97 biennium. by 50 percent — to six years from four years. The Motor that generated an estimated $40 million in Sales and Use tax 1997: The 75th Legislature, Regular Session In January 1997, the Comptroller’s Biennial Revenue Estimate for 1998-99 projected the state would have $50 extended the term of each new or renewal operator license Vehicle Driver License fee was adjusted upward accordingly — from $16 to $24, thereby generating an additional $57.6 million in “speed-up” revenue for the 1998-99 biennium. This bill became effective September 1, 1997. HB 1387 established a semi-annual payment schedule billion available for general purpose spending — a 7.8 for the Automobile Theft Prevention Authority fee. Under for the 1996-97 appropriation. In an effort to limit spending months of the previous year and on August 1 for the first percent increase over the $46.4 billion certified as available increases and to provide local property tax relief, the 75th Legislature concentrated on cost-saving measures and HB 4, the local property tax relief legislation initiated by Governor George W. Bush. HB 4 originally proposed replacement of the Franchise tax with a value-added tax levied on all business entities and one-half percent rate hikes in both the state Sales and Use HB 1387, payment was due on March 1 for the last six six months of the current year. Because a full 12 months of coverage (for 1997) would be collected March 1, 1998 and another six months of coverage (for the first half of 1998) would be collected on August 1, 1998, this bill was expected to produce an estimated $6.5 million “speed-up” in revenue for the 1998-99 biennium. HB 1855 amended the Sales and Use tax exemption for tax and the Motor Vehicle Sales and Use tax. The $4.3 bil- personal property used in the manufacturing process. The be used to help pay for $5.7 billion in school property tax used directly in the manufacturing process that makes or lion in additional revenues provided by these changes would relief. House amendments dropped the value-added tax and the increases in the Sales and Use and Motor Vehicle Sales and Use tax rates and added provisions to broaden the Fran- chise tax and Sales and Use tax bases, increase the tax rates in other taxes, and create a number of new taxes and fees. The Senate countered with a more incremental approach to tax reform, creating an impasse that resulted in a proposed constitutional amendment (subsequently approved by voters in August 1997) raising the homestead exemption from $5,000 to $15,000, yielding $1.04 billion in local property bill specifically limited the exemption to essential property causes a physical or chemical change in 1) the product being manufactured for sale, or 2) a preliminary or intermediate product that becomes part of the final product for sale. In addition, the bill clarified intraplant transportation equip- ment did not qualify for the exemption. This bill became effective October 1, 1997 and produced an estimated $128.2 million for the 1998-99 biennium. SB 226 allowed for the creation of Defense Economic Readjustment Zones. Under this bill, Defense Readjustment Projects designated by the Texas Department of Economic Texas Comptroller of Public Accounts – January 2019 44 Sources of Revenue Development would be able to request Sales and Use tax refunds of $2,500 paid on qualifying purchases for each new permanent job created or retained, not to exceed $250,000 annually. Also, for Franchise tax reporting, corporations designated as qualified projects would be permitted to deduct either 1) from their apportioned taxable capital, 50 percent of their capital investment in the zone, or 2) from their appor- tioned earned surplus, 5 percent of their capital investment in the zone. This bill, which became effective May 19, 1997, was estimated to cost $4.1 million in the 1998-99 biennium and $11.2 million in the 2000-01 biennium. SB 249 set the Telecommunications Infrastructure Fund assessment rate at a flat 1.25 percent for all payers. The bill required the rate to remain in effect until the revenue col- lected reached $1.2 billion, at which point the Comptroller would set a final year rate to allow the total collections to come as close to $1.5 billion as possibilble without exceeding that figure. This bill became effective July 1, 1997. SB 385 increased the OPIC assessment for life, accident and health insurance to 5.7 cents from 3 cents per policy to cover the costs of OPIC’s increased responsibilities under SB 385. This bill, which applied to policies issued in and after calendar 1998, was expected to produce $342,000 in the 1998-99 biennium and $729,000 in the 2000-01 biennium. Finally, the Legislature adopted four bills relating to Oil Production and Natural Gas Production taxes. SB 126 created a 10-year tax exemption for oil or gas produced from a well certified by the Texas Railroad Commission as a “twoyear inactive well.” SB 582 extended the application period for the existing EOR exemption; and SB 862 eliminated the “180-day window” and allowed producers to request Texas Railroad Commission certification for a “high-cost” gas well any time after the date of first production. Lastly, SB 1440 reduced the Oil Production tax rate to 2.3 percent on incremental production from improved wells previously producing seven or fewer barrels a day. The bill also reduced the Natural Gas Production tax rate to 3.75 percent on incremental casinghead gas production from approved oil leases, and granted an exemption on casinghead gas vented or flared for 12 months or more. All four bills became effective September 1, 1997. 1999: The 76th Legislature, Regular Session In January 1999, the Comptroller’s Biennial Revenue Estimate for 2000-01 projected the state would have $58 billion available for general purpose spending — a 11.3 percent increase over the $52.1 billion certified in 1998-99. The 76th Legislature’s tax agenda focused on SB 4, relating to school funding and local property tax relief; SB 7, relating to electric utility deregulation; and SB 441, relating to Sales and Use and Franchise tax relief. SB 4 provided $3.8 billion in local school funding and property tax relief. In addition to making possible a $3,000 statewide teacher pay raise, this bill granted $1.4 billion in local school district property tax relief for 2000-01. SB 7 froze the rates charged by investor-owned electric utilities as of September 1, 1999 and lowered the rates by 6 percent on January 1, 2002. Municipally-owned electric util- ities and cooperatives were provided the option of deciding if and when to open their service area to competition. The bill was designed to preserve the tax bases for the Sales and Use tax on electricity; the Gas, Electric, and Water Utility tax; and the Public Utility Gross Receipts assessment. SB 7 also created the System Benefit Fund by autho- rizing a fee not to exceed $0.65 per megawatt hour. The bill imposed the System Benefit Fund/Non-Bypassable Utility fee on the customers of investor-owned electric utilities and the customers of those municipal and cooperative electric utilities electing competition. The fund was established to provide for customer education, low-income assistance pro- grams, state agency administrative expenses, and to replace any property tax revenue lost by school districts as a result of electric utility restructuring. This fee was expected to generate $15.3 million in the 2000-01 biennium. SB 441, the session’s major state tax bill, enacted sev- eral exemptions and credits relating to the Sales and Use and Franchise taxes. With respect to the Sales and Use tax, the bill provided an exemption for the first $25 of a month- ly charge for internet access service, effective October 1, 1999; an exemption for non-prescription drugs, effective April 1, 2000; an annual three-day clothing and footwear sales tax holiday every August, starting August 1999; and a Texas Comptroller of Public Accounts – January 2019 45 Sources of Revenue 20 percent exemption for data processing and information to the Available School Fund, the bill created a new fee With respect to the Franchise tax, SB 441 added a small make up for the lost tax revenue. This bill, which became services, effective October 1, 1999. business exemption for corporations with less than $150,000 in gross receipts, effective for tax reports due on or after January 1, 2000; a credit for corporations providing childcare facilities or services for their employees’ children; and equal to $0.04875 per gallon and deposited to the fund to effective September 1, 1999, was estimated to create a loss of $2.1 million to the State Highway Fund 0006 for the 2000-01 biennium. HB 3697 eliminated the Workers’ Compensation Insur- separate credits for certain research and development activ- ance Fund surcharge. The 71st Legislature created the (SIAs), and qualifying investment in SIAs. Finally, SB 441 entity to stimulate competition in the workers’ compen- ities, qualifying job creation in “strategic investment areas” added an additional credit for corporations that contribute to the operation of a qualifying “school-age child care pro- gram.” In aggregate, the Sales and Use tax and Franchise tax provisions in SB 441 granted $10.5 million in tax relief in fiscal 1999 and an estimated $496 million in tax relief for the 2000-01 biennium. HB 1014 broadened the Hotel Occupancy tax base by including out-of-state public and private institutions of higher education. This revision was expected to generate an additional $1.5 million in tax revenue for the 2000- Workers’ Compensation Insurance Fund as a quasi-public sation market and to serve as the insurer of last resort. $300 million in revenue bonds were authorized to cover the Fund’s initial capitalization and operating expenses. A new Insurance Maintenance surcharge was levied against all workers’ compensation premiums written in the state. To offset the fund’s losses incurred as the state’s “insurer of last resort,” the Legislature granted the fund a 2 percent tax credit against the fund’s insurance premium and maintenance tax liabilities. By 1999, the fund had retired all of its bond debt and 01 biennium, effective September 1, 1999. Against these acquired a substantial surplus. Consequently, the Legislature Occupancy taxes collected from remitters in South Padre charge and refund all past surcharge collections. Because the gains, however, the bill required that 1 percent of the Hotel Island be returned to the community for beach cleanup. The amount allocated to South Padre Island was estimated to be $1 million for the 2000-01 biennium. HB 1837 established flat tax rates for the Insurance Premium taxes on property and casualty insurance and title passed HB 3697 to remove the tax credit, repeal the sur- surcharge was not counted as state revenue and the 2 percent tax credit had been exhausted before it could be applied to insurance premium tax liability, this bill had no significant revenue implications for the 2000-01 biennium. SB 530 expanded the Insurance Premium tax exemp- insurance, effective for the 2000 tax year and beyond. Previ- tion for certain group accident and health insurance policies was 3.5 percent; and the basic rate for title insurance was the exemption to include certain plans for hospital district ously, the basic tax rate for property and casualty insurance 2.0 percent. Depending on their proportion of Texas invest- ments, however, insurers could qualify for significantly lower rates. This bill established a single rate of 1.6 percent for property and casualty insurance and, likewise, a single rate of 1.35 percent for title insurance. Because the new rates for municipal and county employees. This bill broadened employees and employees of municipal or county hospitals. This bill, which became effective January 1, 2000, was estimated to have a negligible effect on state revenue for the 2000-01 biennium. SB 977 created a Motor Vehicle Sales and Use tax were calculated to be revenue-neutral based on their positive exemption for the purchase, purchase for lease, or rental of ed to produce no significant effect on net tax collections. Because it did not become effective until October 1, 2001, effect on retaliatory tax collections, this change was expect- HB 3159 created a Diesel Fuel tax exemption for fuel used in commercial passenger vehicles operating on fixed routes. Because 25 percent of Diesel Fuel tax revenue goes a machine or trailer used primarily for timber operations. this provision was estimated to have no significant effect for the 2000-01 biennium. The bill repealed the current Sales and Use tax exemption for the first $50,000 of the purchase Texas Comptroller of Public Accounts – January 2019 46 Sources of Revenue price of units of machinery used exclusively for certain HB 2816 was estimated to cause a General Revenue loss of electricity used by persons engaged in timber operations — loss to Petroleum Storage Tank Remediation Account over timber operations and created a new exemption for gas and both effective October 1, 2001. In addition, SB 977 granted a Sales and Use tax exemp- $1.5 million in the 2000-01 biennium and a $74.6 million the same period. SB 290, which became effective March 11, 1999, tion for seedlings, certain chemicals, and machinery and created a temporary Oil Production tax and Natural Gas 2008. As a means of phasing-in this exemption, the bill under certain market conditions. The temporary tax exemp- equipment used in timber production, effective January 1, established a schedule allowing purchasers to apply for a credit or refund for a portion of such taxes paid within a defined period. The refundable/creditable portion started at 33 percent for purchases made between October 1, 2001 through the end of calendar 2003, rising to 50 percent for purchases in 2004 and 2005, and topping out at 75 percent for the two calendar years preceding January 1, 2008, at which point the exemption took full effect. Finally, the Legislature enacted five bills directly affect- ing energy-related taxes or fees. HB 2615, which became effective September 1, 1999, concerned two-year inactive wells and “high-cost” gas wells. The bill extended the appli- Production tax exemption for oil or gas from certain wells tion applied to crude oil wells producing no more than 15 barrels of oil per day per well; and the monthly average price of oil had to be below $15 per barrel as reported on the New York Mercantile Exchange (NYMEX) for three consecutive months prior to the reporting period. The temporary exemp- tion also applied to natural gas wells producing no more than 90 Mcf of gas per day (and casinghead gas from oil wells producing no more than 15 barrels of oil per day per well); and the monthly average price of gas had to be below $1.80 per Mcf as reported on the NYMEX for three consecutive months prior to the reporting period. The price conditions for exemption under SB 290 cation period for the existing 10-year Oil Production tax and were satisfied for only a few reporting months — Febru- duced from a well that had been certified by the Texas Rail- production. The three following reporting months — May, Natural Gas Production tax exemption for oil or gas proroad Commission as a “two-year inactive well.” (Despite the name, there can be one month of production during that two-year period.) In addition, HB 2615 (and, similarly, HB 2104) extended the existing reduced tax rate for high-cost wells to include wells spudded or completed after August 31, 2002 and before September 1, 2010. HB 2615 had no fiscal impact for the 2000-01 biennium. HB 2816 reduced the Petroleum Product Delivery fee ary, March, and April 1999 — and then only for crude oil June, and July 1999 — failed to qualify for the exemption because the price of oil was above $15 per barrel during at least one of the three consecutive months preceding them. The temporary gas exemption never went into effect because the average price for gas never fell below $1.80 per Mcf. SB 290 had a statutory maximum loss of $45 million that could be claimed for 1999 production. SB 329, which became effective September 1, 2001, schedule by 25 percent, effective September 1, 1999. This repealed the odd-year estimated tax prepayment for the Oil Program. Before passage of HB 2816, the fee could only eliminated the estimated prepayment of taxes for the report- fee is used to finance the Groundwater Protection Cleanup be collected when the unobligated balance in the Petroleum Storage Tank Remediation Account fell below $125 million. HB 2816 reduced the fund cap to $100 million and extended the life of the program (which was due to expire on September 1, 2001) an additional two years — until September 1, 2003. Finally, this bill directed no fees could be collected on or after March 1, 2002. Because 2 percent of the fee is cred- ited to the General Revenue Fund as a state service charge, Production tax and Natural Gas Production tax. This bill ing month of July, due on August 15 of each odd-numbered year. Because the effective date was September 1, 2001, the odd-year prepayment had to be paid on August 15, 1999, as well as on August 15, 2001. In addition, SB 329 repealed the speed-up of the due date for the August payment for gasoline and diesel fuel taxes. This bill had no fiscal impact for the 2000-01 biennium. Texas Comptroller of Public Accounts – January 2019 47 Sources of Revenue SB 2 created Sales and Use tax exemptions for certain 2001: The 77th Legislature, Regular Session non-profit water supply and sewer-service corporations and Estimate for 2002-03 projected the state would have $60.8 took effect September 1, 2001, was estimated to reduce state cent increase over the $57.7 billion certified as available for SB 5 created the Texas Emissions Reduction Plan In January 2001, the Comptroller’s Biennial Revenue for certain water and wastewater equipment. The bill, which billion available for general purpose spending — a 5.3 per- revenues by $10.9 million for the 2002-03 biennium. the 2000-01 appropriation. (TERP) Fund, to consist of revenues generated by several had relatively little on its tax agenda; and what there was tion fee for truck-tractors or commercial motor vehicles; a 1 significant bills did become law. rental of new or used off-road heavy duty diesel construction Act to allow school districts to limit property appraisals for of 2.5 percent of the total price paid on every retail sale or rations creating new jobs and investing certain minimum vehicles weighing over 14,000 pounds; a Motor Vehicle new and existing operations. This bill, which became effec- vehicle inspection; and a Motor Vehicle Inspection special biennium. titled in another state (this last provision was repealed by HB In contrast to previous sessions, the 77th Legislature new surcharges: a 10 percent of the Motor Vehicle Registra- focused mostly on property tax issues. Nevertheless, several percent Sales and Use tax surcharge for each sale, lease, or HB 1200 created the Texas Economic Development equipment; a Motor Vehicle Sales and Use tax surcharge maintenance and operation (M&O) tax purposes for corpo- lease of model-year 1996 and earlier on-road diesel motor amounts in tangible personal property and improvements in Inspection fee surcharge of $10 on each commercial motor tive January 1, 2002, had no fiscal impact for the 2002-03 fee of $225 for a motor vehicle previously registered or HB 2604 created the Volunteer Fire Department Assis- tance Fund assessment. Pursuant to the bill, the assessment 2481, 79th Legislature, Regular Session). SB 5 also provided a Diesel Fuel tax exemption for the rate was to be set each year to generate annual revenues of volume of water, fuel ethanol, biodiesel, or mixtures of any ance premiums. This bill took effect July 1, 2001 and was effect September 1, 2001, was estimated to reduce General bill was scheduled to expire September 1, 2011, however, Fund amounts by $28.2 million in the 2002-03 biennium. expiration. was estimated to be $275.6 million. fee on petroleum products when they are withdrawn from persons with certain disabilities, with the credit being equal imported into the state in a cargo tank or barge for delivery taken on report year 2002 tax reports, was estimated to save took effect September 1, 2001, was estimated to produce SB 317 included sale-leaseback transactions in the defi- $15 million based on certain property and casualty insur- of those elements in the final product. The bill, which took estimated to raise $30 million in the 2002-03 biennium. The Revenue-related funds by $15.6 million and State Highway HB 3315 80th Legislature Regular Session repealed this The gain in fee and surcharge revenue to the new TERP fund HB 2687 reinstated the Petroleum Products Delivery SB 63 provided a Franchise tax credit for wages paid to a bulk facility and delivered into a cargo tank or barge, or to 10 percent of wages paid. The credit, which could first be to another location for distribution or sale. The bill, which taxpayers $506,000 for the 2002-03 biennium. $4.1 million in General Revenue and $201.2 million for the nition for “loan” under the Finance Code, Section 341.001, 03 biennium. Use tax. This bill, which became effective September 1, 2 percent, in addition to the existing applicable state and for the 2002-03 biennium. October 1, 2001, was estimated to generate $848,000 in the means to facilitate the creation and funding of certified cap- Petroleum Storage Tank Remediation Account in the 2002- thereby exempting those transactions from the Sales and HB 3667 created a separate Fireworks tax, levied at 2001, was estimated to cost General Revenue $2.7 million local Sales and Use taxes. This bill, which became effective SB 601 granted Insurance Premium tax credits as 2002-03 biennium. ital companies (CAPCOs) to invest in Texas businesses. The Texas Comptroller of Public Accounts – January 2019 48 Sources of Revenue Legislature made the bill’s implementation contingent upon was “self-funded” through the dedicated maintenance tax, credits. If such additional revenue had become available, the 05 biennium. the availability of sufficient additional revenue to fund the maximum annual General Revenue cost in fiscal 2002 and this action had no significant net fiscal impact for the 2004- HB 1365 enacted several revenue increases for the each year thereafter for a 10-year period would have been Texas Emissions Reduction Plan Fund (TERP). The bill SB 1839 provided for the establishment of a $75 million heavy duty diesel construction equipment from 1 percent $20 million. bond program to support nursing home liability insurance and a Nursing Home Stabilization Reserve Fund Bond Debt Service Maintenance tax surcharge. The bill also created the Quality Assurance Fund outside of the State Treasury for long-term health care facilities. The fund would consist of the proceeds from a new fee imposed on certain intermediate-care facilities to be used to obtain matching federal Medicaid funds. The bill proscribed collection of the bond debt surcharge until March 1, 2003, contingent on the issu- ance of revenue bonds before January 2003. The estimated General Revenue-related cost for the 2002-03 biennium was $3 million. 2003: The 78th Legislature, Regular Session increased the Sales and Use tax surcharge on off-road to 2 percent, and broadened the scope of the surcharge by including mining equipment and extending the surcharge to both sales and use of equipment. The Motor Vehicle Sales and Use tax surcharge on the sale, lease, and use of on-road diesel motor vehicles over 14,000 pounds was extended to include model years later than 1996 but at a lower rate of 1 percent of the total price paid. In addition, the bill increased the Motor Vehicle Certificate of Title application fee by $20 if the applicant’s residence is in a county located within a nonattainment area, or by an additional $15 if the applicant’s residence was in any other county. HB 1365 was effective July 1, 2003. The bill was expected to reduce General Revenue by $4.6 million and increase TERP fund revenue by $234.9 million in the 2004-05 biennium. HB 2292 changed the definition of premiums and In January 2003, the Comptroller’s Biennial Revenue revenues for insurance taxation purposes. The definitions revenues, exacerbated by a $1.8 billion projected shortfall in enues were amended to make the premiums and revenues Estimate for 2004-05 forecast a severe downturn in state the 2002-03 General Revenue ending balance. In contrast to the ending balance surpluses and ever-rising revenue streams that characterized the preceding 10 years, the new estimate projected that the state would have only $54.1 billion in funds available for general purpose spending — 12.2 percent less than the $61.6 billion certified as available for 2002-03. In the past, revenue shortfalls typically led to major tax rate increases and base expansions. The 78th Legislature chose a different path, focusing on spending reductions and relatively obscure fee/assessment hikes. As a result, the session produced few significant tax or fee bills. of accident and health insurance premiums and HMO revreceived from the State Treasury by insurers and HMOs for insurance under the Medicaid and the Children’s Health Insurance Program (CHIP) subject to Insurance Premium and Insurance Maintenance taxes. The bill also amended the definition of HMO enrollees to include, for maintenance tax purposes, enrollees covered by the Medicaid and CHIP programs. Effective September 1, 2003, and applicable for reports due on or after January 1, 2004, these specific provi- sions were estimated to raise an additional $51.1 million in General Revenue in 2004-05. HB 2424, effective October 1, 2003, made the Natural HB 1, pursuant to Governor Perry’s veto of the appro- Gas Production tax exemption permanent for high-cost gas. Compensation Commission the commission was effective- drill a qualified well. The exemption period for each qual- priation to the Research and Oversight Council on Worker’s ly abolished on September 1, 2003, thereby moving the Research and Oversight Council on Workers’ Compensation Maintenance tax. Because the commission’s appropriation The bill removed the September 1, 2010 expiration date to ified gas well remained the first 120 consecutive calendar months beginning on the day of first production or until the cumulative value of the tax reduction equals 50 percent Texas Comptroller of Public Accounts – January 2019 49 Sources of Revenue of the drilling and completion costs incurred for the well. wholesaler. The bill eliminated the tax exemption for “clear” 2011, it had no effect on revenues in 2004-05. to generate a gain of $35.1 million for 2004-05. Because this change was scheduled not to occur until fiscal The bill made the Oil Production tax exemption perma- diesel fuel. Effective January 1, 2004, the bill was estimated HB 3459 extended the life of the Telecommunications nent for new and expanded existing enhanced oil recovery Infrastructure Fund (TIF) assessment by raising the TIF cap uary 1, 2008. This provision also had no fiscal impact for 2003, this change was expected to generate a gain of $250 (EOR) projects by deleting the application deadline of Jan2004-05. HB 2425 modified the Natural Gas Production tax filing requirements for high-cost gas. Taxpayers that file an application for high-cost gas certification with the Railroad Commission after January 1, 2004 may have received a credit for severance taxes paid on production for the 24 from $1.5 billion cap to $1.75 billion. Effective June 30, million to the Telecommunications Infrastructure Account for 2004-05. The bill also authorized the Texas Lottery Commission’s participation in multi-jurisdictional lottery games, and subsequently the state joined the MegaMillions (2003) and Powerball (2010) multi-state lottery games. Before this bill, taxpayers could receive up to four years 2003: The 78th Legislature, Third Called Session deadline to apply for those severance tax refunds. Council on Workers’ Compensation, following the Gov- companies (CAPCOs), which are state-regulated, privately end of the regular session (see discussion of HB 1, under consecutive months immediately preceding the application. or more in severance tax refunds and were not bound by a HB 2425 permitted the creation of certified capital owned and operated venture capital entities that invest funds in early stage companies doing business in the state. Effective June 20, 2003, the bill reinstated the CAPCO program that had originally passed in 2001 by repealing the implementation contingency clause in the original legislation (SB 601, 76th Legislature). The bill allowed licensed insurers to invest a total of $200 million in venture capital through qualified CAPCOs and to receive, in aggregate, Insurance Premium tax credits totaling no more than $50 million per year (capped at $200 million over all years) beginning with the 2008 tax year. These changes had no fiscal impact for the 2004-05 biennium. HB 2425 implemented provisions to improve and clarify the Sales and Use tax refund process; exempted HB 28 officially abolished the Research and Oversight ernor’s veto of the council’s HB 1 appropriation after the 2003: The 78th Legislature, Regular Session). To replace the council, the bill established a workers’ compensation research program at the Texas Department of Insurance (TDI) and transferred its property and references in law to TDI. In addition, the bill transferred the balance of the Research and Oversight Council on Workers’ Compensation Account to the Texas Department of Insurance Account and granted TDI the authority to levy the separate Insurance Maintenance tax to fund program activities for which funds had been appropriated. Because appropriations for insurance regulation and oversight are self-funded via annual adjustments in Insurance Maintenance tax rates, this bill had no net fiscal impact. cleanrooms; imposed use tax on materials purchased or 2005: The 79th Legislature, Regular Session manufacturing; and implemented destination-based sourcing Legislature during the preceding biennium, the Comptroller’s Agreement. These changes made available an additional not only a significant upturn in state revenues, but a positive materials used in the construction of certain pharmaceutical processed out of state but used in Texas after processing or for services and other elements of the Streamlined Sales Tax $36.4 million for the 2004-05 biennium. HB 2458 moved the imposition and collection of the Motor Fuels tax to the terminal rack from the motor fuel In contrast to the potential budget shortfall that faced the January 2005 Biennial Revenue Estimate for 2006-07 forecast $2.3 billion 2004-05 ending balance. The new estimate pro- jected the state would have $64.7 billion in funds available Texas Comptroller of Public Accounts – January 2019 50 Sources of Revenue for general-purpose spending, or 10.8 percent more than the HB 2201 would provide Franchise tax deductions for $58.4 billion certified as available for 2004-05. the cost of equipment purchased for a clean coal project. The back on track, the 79th Legislature sought to provide school impact in the 2006-07 biennium. With the state’s tax revenues and economy seemingly property tax relief, increase funding for school districts, bill took effect June 18, 2005, and had no significant fiscal HB 2481 extended the expiration dates of surcharges provide more equitable funding for education, and reform supporting the Texas Emissions Reduction Plan (TERP) these goals took center stage throughout the regular session Use tax surcharge of 2 percent on off-road heavy duty diesel the state’s chief tax on business — the Franchise tax. While and each of the subsequent two called sessions in 2005, they Fund by two years. These surcharges include the Sales and powered construction equipment, and the Motor Vehicle remained elusive until a third called session in 2006. None- Sales and Use tax surcharges of 1 percent or 2.5 percent affecting state tax and fee revenues. powered trucks, both extended to September 30, 2010. The theless, the Legislature did enact a number of unrelated bills HB 7 abolished the Workers’ Compensation Commis- sion and transferred responsibility for regulating workers’ compensation to the Texas Department of Insurance. As such, the rate-setting authority for the Workers’ Compen- sation Maintenance tax was transferred to the successor (depending on the age of a vehicle) on certain on-road diesel Motor Vehicle Registration fee surcharge of 10 percent on truck-tractors or commercial motor vehicles, and the Motor Vehicle Inspection fee surcharge of $10 on commercial motor vehicles, both extended to August 31, 2010. HB 2481 extended the Motor Vehicle Certificate of Title agency, but there was no substantive change in the tax base. two-rate surcharge of $20 or $15, depending on the county no direct fiscal implications. time the rate would become $15 regardless of county of Those portions of the bill affecting the Maintenance tax had HB 532 allowed title insurance companies to invest in certified capital companies (CAPCOs), reversing their exclusion in prior law. As the bill would have no effect on the timing or aggregate limit of insurance premium tax credits allowed to be claimed by CAPCO investors, it would have no fiscal impact on the state. HB 2161 established several severance tax incentives. of residence, until on or after September 1, 2010, at which residence. This surcharge revenue would continue to be ded- icated to TERP until September 1, 2008, then to the Texas Mobility Fund (TMF), except for the $5 additional amount charged in non-attainment counties that would continue to be deposited to TERP through September 1, 2010, at which time the $5 would revert to the TMF. HB 2481 also repealed the Motor Vehicle Inspection The bill created temporary credits for the Natural Gas and special fee of $225 on motor vehicles previously registered low-producing wells. The credits, set to expire September determine the amount of money dedicated to TMF each Oil Production taxes for natural gas and oil pumped from 1, 2007, would apply only when certain trigger prices were met, and could increase until either the taxable price of natural gas dropped to $2.50 or less per Mcf, or the taxable price of oil dropped to $22 or less per barrel, at which point the credit would equal 100 percent of the tax due. The bill also established exemptions for the Natural Gas tax and or titled in another state. The Comptroller was directed to month and transfer a like amount from the State Highway Fund to TERP until September 1, 2010 at which time this provision expired. Along with other revenue-related provi- sions in the bill, these changes had no significant anticipated fiscal impact in the 2006-07 biennium. HB 2883 revised various provisions in state law relat- Oil Production tax for future production from a qualifying ing to the Life, Accident, Health, and Hospital Service energy efficiency equipment on oil wells with marginal pro- bill raised the maximum assessment that could be made orphan well, and an oil tax credit for installation of enhanced duction. Effective September 1, 2005, this bill had no net fiscal impact for 2006-07. Insurance Guaranty Association. Among the changes, the against an insurer, and it compressed the rate at which such assessments could be taken as credits against an insurer’s Insurance Premium tax liability. Texas Comptroller of Public Accounts – January 2019 51 Sources of Revenue For assessments relating to an insolvency occurring on or after September 1, 2005, the credit was allowed at a rate of 20 percent per year over 5 years, instead of 10 percent per year over 10 years. Because the timing and amount of guar- anty fund assessments cannot be predicted with any degree of certainty, the fiscal impact could not be estimated. This bill took effect September 1, 2005. increased the ceiling on assessments, and increased General Revenue-related funds by $400 million in the 2006-07 biennium. This change took effect September 1, 2005. 2006: The 79th Legislature, Third Called Session Following up on the recommendations of the March 29, SB 796 renamed and revised the Boxing Admissions 2006 final report of the Texas Tax Reform Commission, the As the Combative Sports Admissions tax, the levy became bills that, together, provided a means to reduce school prop- tax to bring it more in line with the evolution of the sport. applicable to a wider scope of martial arts contests; but the 3 percent tax on broadcast rights was capped at $30,000, Third Called Session of the 79th Legislature enacted five erty tax rates and a revenue stream to help fund that relief. HB 1 established a procedure to phase in over two years making the net fiscal impact insignificant. This bill took a reduction in the average school district maintenance and SB 877 allowed Texas wineries, and out-of-state win- in fiscal 2007, and then to $1.00 per $100 of taxable value effect September 1, 2005. eries holding a Texas shipper’s permit, to ship wine to con- sumers in Texas. Out-of-state shippers would be required to remit all applicable state taxes on sales to Texas customers. This bill took effect May 9, 2005, and had no significant operations tax rate, first to $1.33 per $100 of taxable value in fiscal 2008. This bill generated an estimated General Revenue-related cost of $3.9 billion in fiscal 2007 and $18.8 billion in the 2008-09 biennium. HB 2 created the Property Tax Relief Fund to receive fiscal impact. certain new revenues for the purpose of reducing school ees’ uniform group health insurance coverage from Insur- the tax revenue attributable to the revenue gains (defined as SB 1691 exempted premiums for Texas school employ- ance Premium and Maintenance taxes.  This change took effect September 1, 2005, and resulted in a net loss of $59.4 million in General Revenue in the 2006-07 biennium. SB 1863, a broad fiscal management bill, continued the Petroleum Products Delivery fee at the same rates. Pre- property tax rates. As such, the bill allocated to the new fund the amounts above what would have accrued had current law remained in effect) from the changes implemented by HB 3, HB 4, and HB 5. By itself, this bill had no direct fiscal impact. HB 3 made substantial changes to the Franchise tax, viously the rates were scheduled to decrease in fiscal 2006 affecting not only the types of entities subject to the tax, but fee remained unchanged. This change generated a $105.4 HB 3, only businesses organized as corporations or limited and 2007. The September 1, 2007 expiration date of the million gain to the Petroleum Storage Tank Remediation Account in the 2006-07 biennium. This change took effect September 1, 2005. SB 1863 decreased the Coastal Protection fee from two cents per barrel to 1.33 cents per barrel. The bill reduced the ceiling on the Coastal Protection Account from $25 million to $20 million, and lowered the floor from $14 million to also how the tax is calculated. Before the changes made in liability companies were subject to the tax. HB 3 extended the tax to other business entities, including limited partner- ships, certain general partnerships, business trusts, and other legal entities. Sole proprietorships, general partnerships directly owned only by natural persons, and passive entities remained exempt from taxation. Before the changes made in HB 3, a taxpayer calculated $10 million. These provisions resulted in a net loss of $6.5 tax liability as the greater of 4.5 percent of Texas-apportioned change took effect August 29, 2005. HB 3 eliminated both the earned surplus and capital bases million for the Coastal Protection Account for 2006-07. This SB 1863 extended the Telecommunications Infrastruc- ture Fund (TIF) assessment through August 31, 2011, earned surplus, or 0.25 percent of Texas-apportioned capital. and replaced them with a firm’s “taxable margin,” defined as total revenue less the greater of: cost of goods sold, or Texas Comptroller of Public Accounts – January 2019 52 Sources of Revenue total compensation. The tax rate on margin apportioned to spending — 14.6 percent more than the $71.9 billion certi- a half-rate of 0.5 percent applicable to businesses in retail or HB 4 expanded the water-related exemptions in the Texas was set at 1 percent for most taxable businesses, with fied as available for 2006-07. wholesale trade. sales and use tax code to exempt tangible personal property exemption provisions of the tax. Before, a business with less used in fracturing work performed at an oil or gas well. The In addition, HB 3 made changes to the small business than $150,000 in total gross receipts or a tax liability of $100 or less owed no tax. HB 3 increased the exemption levels to $300,000 in gross receipts and $1,000 in tax liability. specifically used to process, reuse or recycle wastewater new exemption was estimated to reduce state sales tax collection in the 2008-2009 biennium by $1.4 million. HB 11 allowed the Comptroller to require wholesalers Finally, HB 3 required combined reporting for taxpayer and distributors of alcoholic beverages and tobacco products group members are engaged in a unitary business. Before to retailers in the state. Increased audit coverage of retail groups with common ownership in those situations where HB 3, franchise taxpayers had to report on a separate-entity basis. The franchise tax provisions of HB 3 applied to reports due after January 1, 2008. HB 3 made $6.8 billion in General Revenue–related funds available for school property tax to submit to the Comptroller monthly reports of their sales outlets in response to the information provided through the new reporting procedure was estimated to raise sales tax collections by $72.5 million in the 2008-09 biennium. This change took effect September 1, 2007. HB 735 abolished the Telecommunications Infrastruc- relief in the 2008-09 biennium. ture Fund (TIF) and the TIF assessment. The 1.25 percent dard “presumptive value” for the purpose of determining quarter ending September 30, 2008. Telecommunications HB 4 established, effective October 1, 2006, a stan- the amount of Motor Vehicle Sales and Use tax due on private-party sales of used motor vehicles. This bill made $30.6 million in General Revenue-related funds available for school property tax relief in fiscal 2007 and another $85.1 million in the 2008-09 biennium. HB 5 raised the Cigarette tax rate by $1.00, making the rate $1.41 per pack, and raised the Cigar and Tobacco TIF assessment was eliminated at the end of the calendar utilities and cellular phone companies were allowed to con- tinue to recover from customers, through a monthly billing process, reimbursement of the assessment that had been imposed on those companies. This change resulted in a loss to General Revenue-related funds of $176 million in the 2008-09 biennium. The bill took effect September 1, 2008. HB 1009 expanded the number of municipalities eli- Products tax rate on tobacco products other than cigars to 40 gible to receive a portion of state Hotel Occupancy taxes of 35.213 percent. Effective January 1, 2007, HB 5 made The bill’s provisions made Corpus Christi and Port Isabel percent of the manufacturer’s list price from the former rate $431.7 million in General Revenue related funds available for school property tax relief in fiscal 2007, and another $1.4 billion in the 2008-09 biennium. to fund the cleaning and maintenance of public beaches. eligible, and resulted in a loss to General Revenue of $2.2 million in the 2008-09 biennium. The bill took effect June 15, 2007. HB 1332 allowed a credit or refund of the Diesel Fuel 2007: The 80th Legislature, Regular Session tax on fuel used as a feedstock for the manufacturing of mate for 2008-09 forecast continued with moderate growth in a loss to General Revenue related funds of $1.2 million, The Comptroller’s January 2007 Biennial Revenue Esti- in state revenues, with a positive $7 billion 2006-07 ending balance. The new estimate projected that the state would have $82.5 billion in funds available for general-purpose tangible personal property for resale or used for certain procedures in the production of oil or natural gas, resulting and a loss of $3.6 million to the State Highway Fund, in the 2008-09 biennium. The bill took effect September 1, 2007. HB 1459 excluded telephone calls made from a pay telephone and paid for with coins from the definition of a Texas Comptroller of Public Accounts – January 2019 53 Sources of Revenue telecommunications service, thereby exempting such calls tax credit from September 1, 2009 to September 1, 2013. General Revenue related funds of $2.5 million in the 2008- impact in the 2008-09 biennium. from the Sales and Use tax. This change resulted in a loss to 09 biennium. The bill took effect September 1, 2007. This change took effect September 1, 2007 and had no fiscal HB 3314 also allowed a credit or refund of Gasoline HB 1741 renewed an Insurance Premium tax credit for tax, Diesel Fuel tax, and Liquefied Petroleum Gas tax COs), under which the total amount of certified capital for authorities providing specified public school transportation certain investments in certified capital companies (CAP- which credits would be allowed would be $200 million, and the aggregate credits that could be taken each year would be limited to $50 million. Credit claims could not be filed until fiscal 2013, and therefore there would be no fiscal impact in paid on the fuels used by certain metropolitan rapid transit services to a school district. This change took effect July 1, 2007 and resulted in a small loss to General Revenue related funds and the State Highway Fund in the 2008-09 biennium. (HB 3314 included the sales tax holiday provisions also the 2008-09 biennium. This change took effect September included in HB 3319. Those changes are explained in the HB 1751 created a new Sexually-Oriented Business HB 3315 increased the Volunteer Fire Department 1, 2007. discusion under HB 3319.) Admissions fee of $5 to be paid by customers for admission Assistance Fund assessments levied on certain property mances. The bill resulted in a dedicated General Revenue aggregate annual receipts of $30 million (an increase of $15 to businesses providing live nude entertainment or perfor- funds certification gain of $87.3 million in the 2008-09 biennium. The bill took effect January 1, 2008. HB 1849 repealed the Life Insurance Valuation fee and casualty insurance premiums at rates sufficient to yield million), and repealed the assessment’s expiration date. This change took effect June 15, 2007. HB 3315 also authorized the Comptroller to enter into imposed on the issuers of life insurance policies, and the agreements with other states relating to retaliatory taxes and resulted in a gain to General Revenue-related funds of $8.4 plus lines and independently procured insurance, for which corresponding Insurance Premium tax credit. These changes million in the 2008-09 biennium. The bill took effect September 1, 2007. HB 2982 repealed the expiration dates of Natural Gas tax and Oil Production tax credits for qualifying low-pro- ducing wells, and provided a credit or refund of Diesel Fuel tax paid on fuel used in certain oil field well service equip- ment. The Diesel Fuel tax provision took effect September collection of Insurance Premium taxes on multi-state sur- there would be no significant fiscal impact. The bill repealed provisions relating to the treatment of certified capital com- pany premium tax credits under the retaliatory tax to make Texas law consistent with other states’ laws, for which the fiscal impact cannot be estimated. These changes took effect June 15, 2007. HB 3319 amended Sales and Use tax law to exclude 1, 2007, and resulted in a loss to General Revenue-related certain landman services from the definition of real property of $3.5 million in the 2008-09 biennium. The Production tax ing the transfer of a wireless voice communication device; to funds of $1.2 million, and a loss to the State Highway Fund repeals took effect January 1, 2008, and had no significant fiscal impact. HB 2982 also changed the method used by county tax appraisers to value oil and natural gas properties for ad valorem taxation purposes. This change took effect January 1, 2008, and had no significant fiscal impact. HB 3314 extended the date by which enhanced effi- ciency equipment must be purchased and installed on a qualifying marginal well in order to claim an Oil Production services; to clarify the definition of “sale for resale” regard- require ready-mix concrete contractors to collect and remit the tax and include on sales invoices quantities produced and consumed; to remove tax exemption limitations for pharmaceutical biotechnology cleanrooms; to move the start date for the annual clothing and footwear tax holiday and to add an exemption for certain backpacks; to make technical changes or clarifications to the exemptions for drugs or medicines, tree seedlings grown for commercial timber, and aircraft; and to make various changes affecting local sales Texas Comptroller of Public Accounts – January 2019 54 Sources of Revenue taxes. The sales tax holiday provisions took effect June incomes reporting, as well as by other minor changes. These 2007, resulting in a loss to General Revenue of $101,000 in fiscal impact in the 2008-09 biennium. 15, 2007 and the other provisions took effect September 1, fiscal 2007 and a gain of $333,000 in the 2008-09 biennium. changes took effect January 1, 2008, and had no significant SB 12 extended the expiration dates of surcharges (This bill’s sales tax holiday provisions were also included supporting the Texas Emissions Reduction Plan (TERP) HB 3319 also exempted from the Motor Vehicle Sales included the Sales and Use tax surcharge of 2 percent on in HB 3314.) and Use tax a hydrogen power-capable vehicle with a fuel economy rating of at least 45 miles per gallon, or a fully hydrogen-powered vehicle. This change took effect Septem- ber 1, 2007, and the fiscal impact for the 2008-09 biennium could not be estimated. HB 3554 continued the Petroleum Products Delivery fee through August 31, 2011 and reduced the fee’s rate schedule. In addition, the bill eliminated the storage tank registration fee. This change was estimated to produce $1.2 million gain in General Revenue, a $60.4 million gain for the Petroleum Storage Tank Remediation Account and a $6.5 million loss for the Waste Management Account in fiscal 2008-09. This change took effect September 1, 2007. HB 3693 exempted certain energy-efficient products from the Sales and Use tax during the Memorial Day holi- Fund by three years, to August 31, 2013. These surcharges off-road heavy duty diesel powered construction equip- ment; the Motor Vehicle Sales and Use tax surcharges of 1 percent or 2.5 percent (depending on the age of a vehicle) of certain on-road diesel powered trucks; the Motor Vehicle Registration fee surcharge of 10 percent on truck-tractors or commercial motor vehicles; and the Motor Vehicle Inspec- tion fee surcharge of $10 on commercial motor vehicles. The bill continued the Motor Vehicle Certificate of Title two-rate surcharge ($20 or $15 depending of the county of residence) that was set to become a single-rate surcharge of $15, and extended the surcharge revenue dedication structure between TERP and the Texas Mobility Fund through Sep- tember 1, 2015. The bill took effect September 1, 2007, and had no significant fiscal impact in the 2008-09 biennium. SB 1436 transferred administration of the National day weekend each year. This change took effect September Flood Insurance Program from the Texas Commission on million in the 2008-09 biennium. Board, and required that the first $3.05 million in Insurance 1, 2007 and had estimated losses to General Revenue of $4.6 HB 3694 provided a Franchise tax credit for certain capital investments in qualifying enterprise zone projects and a Sales and Use tax refund for taxable items purchased for use at a qualified business site related to an enterprise zone project or activity. This change took effect June 15, 2007 and had estimated losses to General Revenue of $4.4 million and $9.6 million to the Property Tax Relief Fund in the 2008-09 biennium. Environmental Quality to the Texas Water Development Maintenance tax collections each fiscal year be deposited in a new account funding the Board’s responsibilities. The Department of Insurance would be expected to increase Insurance Maintenance tax collections to offset transfers to the new account, resulting in reduced General Revenue-re- lated retaliatory tax collections of $211,000 in the 2008-09 biennium. The bill took effect September 1, 2007. SB 1604 requires the holder of a license issued by the HB 3928 made revisions to the Franchise tax to provide Texas Commission on Environmental Quality authorizing enue between $300,000 and $900,000, provide an alterna- to remit each quarter an amount equal to 10 percent of the a tax discount on a sliding scale for taxpayers with total rev- tive tax calculation for certain taxpayers with less than $10 million in total revenue, and provide that a taxpayer’s gross proceeds from the sale of a loan or security treated as inven- tory of the seller for federal income tax purposes would be considered gross receipts for apportionment. Those provisions’ revenue losses were offset by partnerships rental the disposal of a radioactive substance from other persons holder’s gross receipts from disposal operations, with half of each payment deposited to General Revenue and the other half to the disposal facility’s host county. The bill took effect June 15, 2007, and the fiscal impact could not be estimated. SB 1617 exempted certain motor vehicle sales by deal- ers from the Motor Vehicle Sales and Use tax due when a Texas Comptroller of Public Accounts – January 2019 55 Sources of Revenue dealer factored, assigned or otherwise transferred the right to dioxide associated with the generation of electricity by the ing payment of the balance of the Motor Vehicle Sales tax geologic formation, and be capable of supplying the carbon receive payments on a seller-financed sale. The law requir- due on the transaction would not apply to a dealer who sold a purchaser’s account to a person registered with the Comp- troller as a related finance company. The Comptroller could facility, be capable of sequestering this carbon dioxide in a dioxide captured for purposes of an enhanced oil recovery project. HB 469 also extended the reduced tax rate for the charge a fee for this registration. The bill took effect July 1, Oil Production tax from seven to 30 years for qualifying million in the 2008-09 biennium. tured from anthropogenic sources in this state such as a 2007, and had estimated losses to General Revenue of $3.9 2009: The 81st Legislature, Regular Session The national economy fell into recession at the end of calendar 2007, early in the 2008-09 biennium. When the Comptroller presented the Governor and Legislature with the Biennial Revenue Estimate for 2010-11 in January 2009, the recession was in its second year but contemporary eco- enhanced oil recovery projects using carbon dioxide cap- clean energy project. The Bill provided certain Sales and Use tax exemptions for tangible personal property used in connection with a clean energy project and created prop- erty tax abatement provisions for advanced clean energy projects located in county reinvestment zones. The bill took effect September 1, 2009, and the fiscal impact could not be determined. HB 1796 extended the expiration dates of the surcharg- nomic statistics had not yet made the recession’s full effects es supporting the Texas Emissions Reduction Plan (TERP) estimate assumed the state’s economy would substantially included the Sales and Use tax surcharge of 2 percent on on the Texas economy evident. That session’s revenue weaken, but not fall into recession, and the state would have a $2.1 billion ending balance in 2008-09. The revenue estimate projected the state would have $77.1 billion in funds available for general purpose spending, a decline of 9.4 percent from the $85.1 billion certified as available for 2008-09. Despite reduced General Revenue-related funds, the Legislature maintained a moderate spending growth rate in the 2010-11 biennium with the assistance of federal stimulus funds provided to state and local governments through the American Recovery and Reinvestment Act of 2009. With major revenue-raising measures not required, there were few bills with significant fiscal impact in the biennium. HB 469 provided tax incentives to organizations that participate in the research and development of certain qualified clean energy projects. For each qualifying project Fund by six years, to August 31, 2019. These surcharges off-road heavy duty diesel powered construction equip- ment; the Motor Vehicle Sales and Use tax surcharges of 1 percent or 2.5 percent (depending on the age of a vehicle) of certain on-road diesel powered trucks; the Motor Vehicle Registration fee surcharge of 10 percent on truck-tractors or commercial motor vehicles; and the Motor Vehicle Inspec- tion fee surcharge of $10 on commercial motor vehicles. The bill extended by four years, to August 31, 2019, the Motor Vehicle Certificate of Title surcharge (an additional $20 or $15 depending on the county of residence) that was set to become a single surcharge of $15, and extended the revenue dedication structure between TERP and the Texas Mobility Fund. The bill took effect September 1, 2009, and these provisions of the bill had no fiscal impact in the 201011 biennium. HB 1801 expanded the list of items qualifying for a Franchise tax credit could be issued for the lesser of 10 exemption from state and local Sales and Use taxes during of a project or $100 million dollars. These clean energy supplies,” as that term is defined in the Streamlined Sales percent of specified costs associated with the construction projects would be required to have a capacity of at least 200 megawatts, meet the emissions profile for an advanced clean energy project, capture at least 70 percent of the carbon the annual sales tax holiday in August to include “school and Use Tax Agreement, that are priced at less than $100 and are purchased for use by a student in an elementary or secondary school. The bill took effect July 1, 2009, and Texas Comptroller of Public Accounts – January 2019 56 Sources of Revenue reduced General Revenue by $1.9 million in fiscal 2009 and and Registry. The bill took effect September 1st, 2009, and HB 2154 changed the taxation method for the non-cigar HB 3433 allowed certain registered owners of a fleet by $14.6 million in the 2010-11 biennium. would have no General Revenue-related fiscal impact. component of the Cigar and Tobacco Products tax, which of commercial nonapportioned vehicles to apply for license tobacco, pipe tobacco and roll-your-own cigarette tobacco. of one to eight years for each vehicle. Each eligible vehicle affected the taxation of products such as snuff, chewing The tax for those products changed from one based on the product’s wholesale value to a tax based on the product’s weight. The bill took effect September 1, 2009, and in the 2010-11 biennium allocated $21.7 million to the new Physician Education Loan Repayment Account, and due to provi- sions in HB 4765 (see below) increased General Revenue by $83.0 million. Allocations from this tax to the Property Tax Relief Fund would not change. HB 2582 exempted renewable diesel from the Diesel Fuel tax, and added renewable diesel to the Fuel Ethanol plates, permanent decals and registration cards for a period would be assessed an annual fleet management fee of $10, a one-time license plate manufacturing fee of $1.50 for each set of plates, or $8 for each set of plates if a name or logo of the business entity was included. These fees, along with all normal registration fees, would be paid in advance for each vehicle for each year of registration requested. The bill was effective September 1, 2009. The State Highway Fund gained $153.3 million during the 2010-11 biennium, and county road and bridge funds gained $65.5 million. HB 4409 eliminated Insurance Premium tax credits for and Biodiesel Production Incentive Program. The bill took all Texas Windstorm Insurance Association (TWIA) assess- determined. The unpredictability of any future windstorm damage made effect June 19, 2009, and the fiscal impact could not be HB 2654 limited the use of the $10 gift tax to motor vehicle transfers from a person to a spouse, parent, step-parent, grandparent, child, stepchild, sibling, grandchild, guard- ian, an estate or a not-for-profit organization. Otherwise the Motor Vehicle Sales and Use tax would apply. The bill took ments made after the bill’s effective date of June 19, 2009. it impossible to determine the fiscal impact; to the extent that future assessments would no longer result in reduced collection of Insurance Premium taxes, the impact would be positive. HB 4765 provided that for Franchise tax reports due effect September 1, 2009, and increased General Revenue in 2010 and 2011, a business with total revenue of $1 HB 2730 included minor provisions affecting Motor total revenue amount at which a business owed no tax was by $26 million in the 2010-11 biennium. Vehicle Drivers License fees and Driver Responsibility Pro- gram (DRP) surcharges. The bill took effect September 1, 2009. The fiscal impact from the Driver License fees could not be determined, and the DRP surcharge fiscal impacts will occur after the 2010-11 biennium. HB 2774 made the Texas Department of Banking, Office of Consumer Credit Commissioner, Department of Savings and Mortgage Lending, and the Credit Union Department self-directed and semi-independent agencies million or less would owe no tax. Prior to the change the $300,000. For Franchise tax reports due in 2012 or later the total revenue amount for the no-tax-due provision would be $600,000. The bill took effect January 1, 2010, and reduced General Revenue by $172 million in the 2010-11 biennium. In addition, HB 4765 amended the revenue allocations from the Cigar and Tobacco Products tax, as amended by HB 2154 (see above), in order to fund the estimated fiscal impacts of HB 4765. SB 254 exempted volunteer fire departments from the and required all revenue collected by these agencies be Gasoline tax and Diesel Fuel tax. The bill took effect July 1, pany. The bill required that any amounts in Mortgage Broker fiscal 2009 and $1.4 million in the 2010-11 biennium, and deposited with the Texas Treasury Safekeeping Trust ComRecovery Fund over $3.5 million be available for the Texas Finance Commission to use toward offsetting the cost of participating in the Nationwide Mortgage Licensing System 2009, and reduced General Revenue by about $100,000 in reduced State Highway Fund revenue by $200,000 in fiscal 2009 and $4.4 million in the 2010-11 biennium. Texas Comptroller of Public Accounts – January 2019 57 Sources of Revenue SB 711 created a winery festival permit that authorizes Medicaid program, made spending for certain items contin- farmers’ market, celebration or similar event. The permit short-term revenue-raising provisions. During the session, the permit’s holder to sell wine at a civic or wine festival, holder could not offer wine for sale for more than five days in a 30-day period or on more than three consecutive days in one location. Only winery permit holders can apply for a winery festival permit. The bill took effect September 1, 2009, and increased General Revenue by $143,000 in the gent on improved revenue collections, and approved several the Comptroller increased the fiscal 2011 sales tax revenue estimate by $300 million, and near the session’s end the Comptroller raised the General Revenue-related revenue estimate for the 2012-13 biennium by $1.2 billion. HB 1, the General Appropriations Act, directed the 2010-11 biennium. Comptroller to conduct a limited-duration tax amnesty aircraft purchased for agricultural uses. An aircraft is con- es, with all applicable penalties and interest to be waived. SB 958 created a Sales and Use tax exemption for sidered to be used exclusively for agricultural purposes if at least 95 percent of the use is for agricultural activi- ties. Repairs, remodeling and maintenance services for an exempt aircraft would also be exempt. The bill took effect program to encourage voluntary tax reporting by business- The two month amnesty program during the summer 2012 increased General Revenue-related funds by $75 million in the 2012-13 biennium. HB 1541 increased the Automobile Burglary and Theft September 1, 2009, and reduced General Revenue by $1 Prevention Authority fee from $1 to $2 per motor vehicle SB 1655 directed the Texas Lottery Commission to with the remainder to General Revenue. The bill took effect million in the 2010-11 biennium. create and operate a new instant ticket lottery game no later than March 2, 2010, with the new game’s net revenue depos- ited to the Fund for Veterans’ Assistance. The bill took effect June 19, 2009, and was estimated to increase General Reve- nue-related funds by $14.9 million in the 2010-11 biennium. 2011: The 82nd Legislature, Regular Session When the 82nd Legislature convened in January 2011 the national recession had ended a year and a half earlier, but the economy remained weak and there was reasonable con- cern recession conditions could return. The Texas economy, year. The Authority would receive 50 percent of the new fee September 1, 2011, and increased General Revenue by $37 million in the 2012-13 biennium. HB 2048 directed municipalities and counties to notify the Comptroller when an audit determines a hotel failed to collect or pay state Hotel Occupancy taxes. If that audit results in collection of delinquent state hotel taxes, the Comptroller will pay the local government an amount equal to 20 percent of the delinquent tax collected, not including penalty, interest or amounts paid under protest. The bill took effect September 1, 2011, but the fiscal impact for the state and local government could not be estimated. HB 2694 reauthorized the petroleum product delivery while better than most of the country, was not performing fee on petroleum products withdrawn from a bulk facility nial Revenue Estimate reflected this economic uncertainty, Texas, that was set to expire on August 31, 2011. The bill at pre-recession levels. The Comptroller’s 2012-13 Bien- indicating available revenue collections during the 2012-13 biennium would be $72.2 billion, $2.2 billion less than estimated collections in the 2010-11 biennium. In addition, the Comptroller estimated a negative $4.3 billion 2010-11 General Revenue-related ending balance. and delivered into a cargo tank or barge, or imported into required the Texas Commission on Environmental Quality to set the fee at an amount necessary to cover program costs. The bill became effective September 1, 2011, and increased General Revenue by $3.3 million in the 2012-13 biennium. SB 776 revised the requirements Texas licensed cus- The 82nd Legislature responded by reducing spending toms brokers must follow when issuing proof of export doc- the fiscal 2011 shortfall. For the 2012-13 biennium, the and Use tax. The bill increased the charge for each export and using Economic Stabilization Fund revenue to close Legislature made further spending cuts, underfunded the umentation a purchaser can use to obtain a refund of Sales stamp from $1.60 to $2.10 and required $0.50 of the charge Texas Comptroller of Public Accounts – January 2019 58 Sources of Revenue be used only for enforcing the laws relating to customs bro- due in September 2013. The article would increase General General Revenue by $2.9 million in the 2012-13 biennium. 2014 revenue by the same amount. kers. The bill took effect September 1, 2011, and increased Revenue in fiscal 2013 by $17.6 million, and reduce fiscal Article 11 (effective October 1, 2011) lowered the cig- 2011: The 82nd Legislature, First Called Session arette distributor stamping allowance to 2.5 percent, from 3 with numerous articles affecting state revenue sources. lion, and Property Tax Relief Fund revenue by $7.2 million, The Legislature passed SB 1 a fiscal management bill Article 2 (effective September 28, 2011) amended insurance premium tax credits for examination fees and percent, of the face value of Cigarette tax stamps purchased. The article would increase General Revenue by $3.9 milin the 2012-13 biennium. Article 13 (effective September 28, 2011) required all overhead assessments paid directly to the Texas Department Sales and Use taxpayers who file monthly tax reports in these expenses were disallowed for fees paid during calen- tronic funds transfer to submit a 25 percent prepayment of of Insurance by certain insurers. Tax credits for payment of dar 2012 and 2013 and were reflected on the tax reports due in March 2013 and 2014, respectively. The disallowance of these credits was repealed on January 1, 2014, restoring taxpayers’ ability to claim premium tax credits for those fees. The article would increase General Revenue funds in fiscal 2013 by $7.2 million. Article 3 (effective October 1, 2011) repealed refunds of August 2013 and who pay the tax due that month by elec- tax normally due in September 2013. Taxpayers who submit the prepayment could take an equivalent credit on their report due in September 2013. Taxpayers who normally prepay this tax were not affected. The article would increase General Revenue in fiscal 2013 by $231.2 million, and reduce fiscal 2014 revenue by the same amount. Article 14 (effective October 1, 2011) assessed a $50 state sales or franchise taxes paid to certain school property penalty when certain tax reports are filed late, regardless of repeal in fiscal 2013, and each year thereafter, would be a er any taxes or fees were due for the reporting period. Taxes taxpayers in reinvestment zones. The fiscal impact of the General Revenue gain of $6.7 million and a Property Tax Relief Fund gain of $3.3 million. Article 9 (effective October 1, 2011) required the remit- tance in August 2013 of a 25 percent prepayment of gasoline or diesel fuel tax normally due in September 2013. Taxpay- ers who submit the prepayment could take an equivalent credit on their report due in September 2013. In addition, the Comptroller would delay the July and August 2013 allocations for motor fuels from the General Revenue Fund to the State Highway Fund until September 2013. The article would increase General Revenue in fiscal 2013 by $477.9 million, and reduce fiscal 2014 revenue by the same amount. whether the taxpayer subsequently files the report or whethaffected by the article include Sales and Use tax; Fireworks tax; Franchise tax; Hotel Occupancy tax; Mixed Beverage tax; Motor Fuels tax; Motor Vehicle Rental tax; Motor Vehicle Seller Financed Sales tax; and the surcharge for off- road, heavy-duty diesel equipment. The penalty also would apply to the 9-1-1 Prepaid Wireless Emergency Service fee. The article imposed a 5 percent penalty on Mixed Beverage taxpayers and 9-1-1 Prepaid Wireless Emergency Service Fee Payers for failing to timely pay tax due or to timely file required reports. The article would increase General Revenue by $13.2 million in the 2012-13 biennium. Article 31 (effective September 28, 2011) extended the Article 10 (effective September 28, 2011) required expiration date for the carryforward of unused job creation Beverage tax; the excise taxes on beer, liquor, wine and ale; 2012 to December 31, 2016. The article would reduce Prop- businesses paying Alcoholic Beverage taxes — the Mixed and the Airline and Passenger Train Beverage taxes — to make a 25 percent prepayment in August 2013 of tax nor- mally due in September 2013. Taxpayers who submit the prepayment could take an equivalent credit on their report credits and capital investment credits from December 31, erty Tax Relief Fund revenue by $6.8 million in fiscal 2013. Article 37 (effective September 28, 2011) amended the Franchise tax to extend the $1 million no-tax-due threshold that was to expire December 31, 2011 to December 31, Texas Comptroller of Public Accounts – January 2019 59 Sources of Revenue 2013. Beginning 2014, a $600,000 no-tax-due threshold Comptroller estimated the state would carry a $2.6 billion are adjusted on January 1 of each even-numbered year based HB 7 required the Comptroller to assess and collect, would take effect. Under existing law, threshold amounts positive cash balance beyond 2014-15. on changes in the U.S. Consumer Price Index. The article from property and casualty insurers, the lesser of the amount million in the 2012-13 biennium. Fund, or $30 million. The bill became effective June 14, would reduce Property Tax Relief Fund revenue by $149.9 Article 45 (effective January 1, 2012) amended the Franchise tax to allow certain qualified live event pro- motion companies and courier and logistics companies appropriated from the Volunteer Fire Department Assistance 2013, and increased General Revenue by $37.8 million for the 2014-15 biennium. HB 78 removed the minimum purchase threshold to exclude certain payments from their total revenue, and requirement, previously set at $1,000 per single transaction, taxation. The article reduced Property Tax Relief Fund reve- coins; or of platinum, gold or silver bullion. The bill became excluded certain unincorporated political committees from nue by $2.4 million in the 2012-13 biennium. Article 51 (effective January 1, 2012) amended the Franchise tax to revise the definition of “retail trade” to for exemption on the sale of all gold, silver or numismatic effective October 1, 2013, and reduced General Revenue by $0.4 million for the 2014-15 biennium. HB 500 provided that a taxable entity with total rev- include certain apparel rental activities, and entities primari- enue of no more than $1 million for a report period would The article would reduce Property Tax Relief Fund revenue The bill allowed taxable entities the option of determining ly engaged in those activities to use the 0.5 percent tax rate. by $200,000 in the 2012-13 biennium. 2013: The 83rd Legislature, Regular Session The Comptroller’s 2014-15 Biennial Revenue Estimate for the 83rd Legislature reflected a more vigorous state economy than had been previously forecast. Better than expected 2012-13 revenue collections due to a rebounding state and national economy and a robust crude oil and nat- ural gas industry increased the 2014-15 beginning balance available for general purpose spending from $2.6 billion to $8.8 billion. In addition to the higher beginning balance, the Comptroller estimated growing General Revenue-related collections would carry into the 2014-15 biennium with a forecast of $96.2 billion. In total, legislators had $101.4 continue to have no Franchise tax liability for that period. margin as total revenue less $1 million. HB 500 permitted auto repair services and certain rental activities to calculate Franchise tax liability using a tax rate of 0.5 percent. The bill provided, for non-EZ filers, a temporary franchise tax rate reduction of 2.5 percent in fiscal 2014 and a certifica- tion estimate-contingent 5 percent in fiscal 2015. The bill changed the method for apportioning margin for taxable entities engaged in internet hosting or broadcasting. HB 500 provided a deduction from apportioned margin for moving expenses to taxable entities that relocate. The bill allowed transferable Franchise tax credits for rehabilitation of his- toric structures. The bill, becoming effective beginning in fiscal 2014, reduced revenue to the Property Tax Relief Fund by $482 million for the 2014-15 biennium. HB 800 created an optional Sales and Use tax exemp- billion after subtracting the $3.6 billion reserved for the tion for the purchase, lease or rental of depreciable tangible revenue available for general purpose spending than the qualified research, as defined in Internal Revenue Code Economic Stabilization Fund. This was 12.4 percent more previous legislature. Major topics, other than general appropriations, addressed by the 83rd Legislature included funding of addi- tional water resources ($2 billion), transportation funding ($1.38 billion) and net tax relief in excess of $850 million. After certification of appropriations and tax relief, the personal property purchased by a person for direct use in (IRC) Section 41. Alternatively, the bill allowed persons engaged in qualified research conducted in Texas to claim a credit for Franchise tax instead of the Sales and Use tax exemption. Persons wishing to claim the sales tax exemption would be required to file an annual information report with the Comptroller. The bill provided an increased amount of Texas Comptroller of Public Accounts – January 2019 60 Sources of Revenue Franchise tax credit for taxable entities that contract with 1, 2013, and reduced General Revenue by $14.6 million for performance of qualified research. The bill became effective HB 1712 exempted from Sales and Use tax tangible public or private institutions of higher education for the the 2014-15 biennium. January 1, 2014, and reduced General Revenue by $213.8 personal property that is used, or intended to be used solely 2014-15 biennium. also exempted services performed on qualifying properties million and Property Tax Relief Fund by $86 million for the HB 1047 exempted from the Insurance Premium tax any premium or service fees retained by a bail bond surety or by a property and casualty agent in connection with the execution or delivery of a bail bond. The bill became effec- in an offshore spill response containment system. The bill from Sales and Use tax. The bill became effective June 14, 2013, and had no significant fiscal effect for the 2014-15 biennium. HB 2148 required licensed dealers to collect a $0.15 per tive September 1, 2013, and reduced General Revenue by an gallon tax on compressed natural gas (CNG) and liquefied HB 1133 allowed cable, internet and telecommuni- effective Aug. 31, 2013, all prepaid liquefied gas decals indeterminate amount for the 2014-15 biennium. cations providers to claim a refund for state Sales and Use taxes paid on the purchase, lease or rental of tangible personal property directly used in the distribution of cable television service internet access, or telecommunications services. The bill prohibited a claim for refund on property used or consumed in providing data processing or infor- mation services. HB 1133 excluded Sales and Use taxes imposed by local jurisdictions from the refund program. The bill restricted providers who claim the sales and use tax refund from claiming special property tax benefits for eco- natural gas (LNG) at the time of sale. The bill cancelled, currently issued to motor vehicles that operate using CNG or LNG and required refunds to decal holders for the unused portion of the decal. The bill required transit authorities that do not maintain a private CNG or LNG storage facility to pay the tax on each gallon delivered into the transit vehicles. HB 2148 allowed transit authorities with a CNG or LNG refueling facility the option to prepay the CNG and LNG tax for each transit vehicle annually by way of a decal or remit tax on each gallon of CNG or LNG delivered into their vehicles. The bill allowed qualified transit companies that paid nomic development on that same tangible personal property. tax on the purchase of CNG or LNG to request a refund of to all claimants at $50 million per calendar year. HB 1133 equivalent of LNG used in transit vehicles. The bill became The legislation capped the total amount available for refund provided each eligible provider with a pro rata share of the $50 million if the total of all qualifying refunds exceeded the annual cap. The bill became effective September 1, 2013, and reduced General Revenue by $100 million for the 2014- $0.01 per gasoline gallon equivalent of CNG or diesel gallon effective September 1, 2013, and reduced General Revenue by $140,000 and $210,000 for State Highway for the 201415 biennium. HB 2451 adjusted Franchise tax reporting to allow the 15 biennium. deduction of the cost of labor, equipment, fuel and materials qualifying data center from state Sales and Use tax, for 10 bill became effective January 1, 2014, and reduced revenue HB 1223 exempted certain items used to operate a to 15 years following the date of certification, depending on the amount of capital investment made in the center by the owner, operator or occupant. The exemptions require a from total revenue for agricultural aircraft operations. The to the Property Tax Relief Fund by $300,000 for the 201415 biennium. HB 2913 allowed certain revocable trusts to qualify capital investment of $200 million or more over a five-year for the $10 Motor Vehicle Sales and Use gift tax when such 20 permanent, full-time qualifying jobs. This bill does not became effective September 1, 2013, and had no significant period from the date of certification and creation of at least apply to the data centers with agreements to limit property tax appraised values. The bill became effective September trust is the donor or recipient of the motor vehicle. The bill fiscal effect for the 2014-15 biennium. HB 2972 exempted premiums on policies that insure risks or exposures under ocean marine insurance coverage Texas Comptroller of Public Accounts – January 2019 61 Sources of Revenue of stored or in-transit baled cotton for export. The bill to retailers. The bills require a $250 fee for a brewer permit enue by an indeterminate amount for the 2014-15 biennium. ber 1, 2013, and had no significant effect on state revenue became effective January 1, 2014, and reduced General Rev- HB 3086 provided an option to collect and remit the $0.20 per gallon Diesel Fuel tax on biodiesel, renewable or manufacturers license. The bill became effective Septemfor the 2014-15 biennium. SB 559 became effective June 14, 2013, and repealed diesel and on the volume of water, fuel ethanol, biodiesel a requirement for early payment in August 2013 by certain sellers who are licensed suppliers, permissive suppliers, dis- Fuels taxpayers. The early payment requirement was enact- and renewable diesel blended with petroleum diesel for first tributors, blenders or importers. The bill reduced reporting requirements for invoice, storage tank and pump labeling Sales and Use taxpayers, Mixed Beverage taxpayers and ed in the 82nd Legislative Session. SB 734 allowed captive insurers to obtain a certificate requirements outlined in Comptroller Rule 3.443 for the of authority from the Texas Department of Insurance (TDI) The statute prohibited Diesel Fuel tax exemptions on a sub- tax rate with a minimum premium tax of $7,500 and a maxi- first seller, blender or importer who elects to use this option. sequent sale, and a license holder or other purchaser is not entitled to a refund or credit that subsequent sale. The bill became effective September 1, 2013, and increased General Revenue by $11.5 million for the 2014-15 biennium. HB 3536 imposed a new inflation-indexed fee on cigarettes and cigarette tobacco products manufactured by companies who did not originally participate in the Master Settlement Agreement or Texas Comprehensive Settlement Agreement. The bill allowed an additional 0.5 percent cig- arette stamping allowance to distributors for remitting and reporting the new fee (a total of 3 percent of all cigarette stamps purchased when included with the standard 2.5 percent stamping allowance). The bill became effective September 1, 2013, and increased General Revenue by an indeterminate amount for the 2014-15 biennium. and established 0.5 percent as the licensed captive premium mum Premium tax of $200,000. The bill imposed the premium tax on all premium receipts for insurance written by the captive, regardless of the location of the risk, and allowed a Premium tax credit for examination expenses paid to TDI during the calendar year for which the tax is due. The bill also imposed the Maintenance tax on licensed captive insur- er based on the location of the risks in Texas, as applicable to the individual lines of business written. The bill exempted captives from payment of the Office of Public Insurance Counsel (OPIC) assessment. The bill allowed nonadmitted captives to continue writing coverage for their parent and affiliated companies at a 4.85 percent Premium tax rate. The bill became effective June 14, 2013, and reduced General Revenue by $3.1 million for the 2014-15 biennium. SB 748 allowed Fort Worth or another qualified city to HB 3572 lowered the Mixed Beverage Gross Receipts create project financing zones to fund a convention center percent Mixed Beverage Sales tax. The bill became effective ture, by receiving the incremental increase from state and tax rate from 14 percent to 6.7 percent and imposed an 8.25 January 1, 2014, and had no effect on state revenue for the 2014-15 biennium. SB 485 set a new standard formula for determining the dates of the annual Sales Tax Holiday for clothing, footwear, backpacks and school supplies. The bill became effective June 14, 2013, and had no effect on state revenue for the 2014-15 biennium. SB 516 and SB 517 created a Brewer’s Self-Distribu- facility, multipurpose arena or venue and related infrastruc- local Sales and Use tax, Hotel and Mixed Beverage tax revenue from for a period of up to 30 years. This includes revenue from hotels that are built after the zone is desig- nated, but not from an existing convention center hotel. The bill became effective September 1, 2013, and reduced General Revenue by an indeterminate amount for the 201415 biennium. SB 905 authorized the holder of a distiller’s and rectifi- tion Permit (SB 516) and a Manufacturer’s Self-Distribu- er’s permit to sell distilled spirits to customers for on-prem- licensed brewers and manufacturers to sell craft ale and beer tax on sales of distilled spirits for off-premises consumption tion License (SB 517) and allowed the new permitted and ises and off-premises consumption. The bill assessed Sales Texas Comptroller of Public Accounts – January 2019 62 Sources of Revenue and Mixed Beverage tax on sales of distilled spirits, includ- from 2014-15 to net revenues yielded a total amount avail- annual sales of distilled spirits to no more than 3,000 gal- of $113.0 billion. ing sampling fees, at the distillery. The legislation restricted lons for consumption on the premises and 3,500 gallons for able for general-purpose spending by the 84th Legislature Beyond general appropriations, legislative actions on consumption off the premises. The bill became effective the fiscal front notably included measures addressing the indeterminate amount for the 2014-15 biennium. SJR 5) as well as tax relief. This session, tax relief took September 1, 2013, and increased General Revenue by an SB 1151 exempted snack foods from Sales and Use tax, unless they are sold through a vending machine or in individual-sized portions. The bill became effective September 1, 2013, and had no significant effect on state revenue for the 2014-15 biennium. continuing need for enhanced transportation funding (see two primary forms: an increase in the homestead exemption allowed to local property taxpayers and (as detailed below in the HB 32 discussion) reduction of the Franchise tax rates. Following the close of the 84th Regular Legislative session, the Comptroller’s 2016-2017 Certification Revenue Estimate projected $4.1 billion remaining as a cash balance at the end of the 2016-17 biennium. 83rd Legislature, Third Called Session HB 7 was one of several bills which focused on multi- The Legislature passed SJR 1, a resolution amending the Texas Constitution. The resolution directed up to one- half of the funds previously deposited to the Economic Stabilization Fund—revenue associated with Crude Oil and Natural Gas severance taxes—to Fund 6, the State High- way Fund. These redirected funds are for the construction and maintenance of public roadways, other than toll roads. SJR 1 was approved by Texas voters on Nov. 4, 2014. 84th Legislature, Regular Session ple fiscal issues. Significantly, HB 7 repealed the additional $200 surcharge on selected professional license fees. These fee surcharges were originally added as part of HB 11, 1991, 72nd Legislature (First Called). Some of the professions paying this $200 surcharge included: dentists, engineers, accountants, architects, psychologists, and veterinarians. Physicians had their specific surcharge repealed, as well. This portion of HB 7 was estimated to reduce General Revenue-related funds by $251.5 million in the 2016-17 biennium. The bill also repealed the Attorney Occupation tax, The Comptroller’s 2016-17 Biennial Revenue Estimate, released in January 2015, presented a forecast of a Texas economy and state revenue system continuing to expand but at a reduced pace following a rapid rebound from the Great Recession. While not matching the feverish pace of revenue growth seen in 2012-13, collections were neverthe- less strong in the following 2014-15 biennium, leading to an amount of General Revenue available for general-purpose an assessment originally added (like the $200 surcharges above) by HB 11 in 1991. The bill also reduced the Texas Emissions Reduction Plan (TERP) surcharge imposed on the sale, lease or rental of off-road, heavy-duty diesel equipment (a Sales and Use tax surcharge) from 2 percent to 1.5 percent. This provision, effective Sept. 1, 2015, was estimated to reduce the TERP Account by $32.5 million in the 2016-17 biennium. HB 32 reduced Franchise tax rates, effective for reports spending remaining at the end of the 2014-15 biennium— originally due on or after Jan. 1, 2016. The bill did not billion. Reflecting a continuing moderation of economic only the tax rates were changed. Taxable entities that were and available for spending in 2016-17—estimated to be $7.5 conditions (including a large drop in the price of oil) and after required setasides for transfer to the Economic Stabilization (“Rainy Day”) Fund, 2016-17 net revenue was forecast to be $105.4 billion. Adding the $7.5 billion remaining amend or alter the basis upon which businesses owe tax; paying at the 1 percent rate will pay a rate of 0.75 percent of taxable margin for Franchise tax. Taxable entities primarily engaged in retail or wholesale trade will pay a franchise tax rate of 0.375 percent of taxable margin; they previous- Texas Comptroller of Public Accounts – January 2019 63 Sources of Revenue ly were subject to a 0.5 percent tax rate. Further, the bill registered motor vehicles that operate using LG or LPG from $10 million to $20 million and allows a taxable entity With regard to the Hotel Occupancy tax, it clarified that increases the revenue threshold for the EZ computation were canceled effective Aug. 31, 2015. choosing the EZ computation to pay tax at a rate of 0.331 the term “hotel” includes a rental of all or part of a residen- These provisions were estimated to reduce revenue to Nonprofit entities organized for the sole purpose of (previously 0.575) percent. tial property to a person who is not a permanent resident. the Property Tax Relief Fund (PTRF) by $2,559.9 million exclusively providing emergency medical services (includ- to the PTRF, which functions to direct funding to public all state Motor Fuels taxes (i.e., gasoline, diesel fuel, for the 2016-17 biennium. The statutory impact would be schools. Upon reduction of revenue to the PTRF, however, undedicated General Revenue compensates for the decrease and provides the necessary funding to the Foundation School Account for disbursement to school districts. HB 157 allows cities to set their Municipal Sales and Use tax rate at any rate that is an increment of one-eighth of 1 percent as long as the rate would not exceed the maximum 2 percent combined local tax rate provided by law. The adoption and changes in rates of Municipal Sales and Use taxes must be approved by voters. The bill applies to the Municipal Sales and Use tax and to city sales and use taxes imposed for street maintenance, venue projects, ing rescue and ambulance services) were exempted from compressed or liquefied natural gas). In addition, if the Motor Fuels tax is paid, the entity can file a refund claim with the Comptroller’s office. Texas municipalities were exempted from the Motor Fuels tax on compressed and liq- uefied natural gas; if the Motor Fuels tax is paid, the Texas municipality can file a refund claim with the Comptroller’s office. Similarly, certain transit and regional transportation authorities were exempted from the state Motor Fuels tax on compressed or liquefied natural gas delivered into the fuel supply tank of a motor vehicle, if such an entity had a prepaid liquefied gas tax decal on Jan. 1, 2015. The bill amended the definition of “snack items,” for property tax relief, economic development and crime control the purposes of Sales and Use tax, to encompass items HB 1841 excludes services performed on behalf of an popcorn, chips and crackers, ice cream and frozen yogurt, and prevention. insured by a person licensed under Insurance Code Chapter 4102 (public insurance adjusters) from the definition of insurance services. As a result, insurance services provided by a public insurance adjuster are not subject to Sales and Use tax. Effective Oct. 1, 2015. It was estimated this bill would reduce General Revenue by $2 million during the 2016-17 biennium. HB 1905 was another bill enacted by the 84th Legisla- ture which covered a number of fiscal issues. With respect to state taxation: The bill repealed three small taxes entirely: the Bingo such as: all manner of breakfast or nutrition-type bars, nuts, and many frozen juice items. Snack items sold in portions labeled as having not more than one serving or containing less than 2.5 ounces would be taxable; and food products served, prepared or sold for immediate consumption by a restaurant, lunch counter, cafeteria, deli or similar types of businesses would be taxable. All these provisions were effective Sept. 1, 2015. HB 1905, in its entirety, was estimated to reduce net General Revenue-Related funds over the 2016-17 biennium by $0.4 million. HB 1915 added the cities of Corpus Christi, Quintana Rental tax, the Airline/Passenger Train Beverage tax, and and Surfside Beach as eligible barrier island coastal munic- The bill repealed the Texas motor fuels tax on Liquefied South Padre Island), making them eligible to receive a 2 the Controlled Substances tax. Gas (LG), including liquefied petroleum gas (LPG). Under the bill’s provisions, liquefied and compressed natural gas, also taxed at 15 cents per gallon, remained taxable as motor fuels. All prepaid LG decals that had been issued to Texas ipalities (joining the cities of Galveston, Port Aransas and percent rebate of the state Hotel Occupancy tax collected from hotels located in these cities. The bill also increased the state hotel tax rebate for Port Aransas from 1 percent to 2 percent. This bill was effective Texas Comptroller of Public Accounts – January 2019 64 Sources of Revenue Oct. 1, 2015. The reduction in General Revenue-related not provide an exemption for taxable items sold by an out- be $8.2 million. tax on any items purchased. The bill was effective June 16, funds during the 2016-17 biennial period was estimated to HB 1964 amends the Municipal Hotel Occupancy tax to add the cities of El Paso, Frisco and Nacogdoches as eligible central municipalities. An eligible central municipality is enti- of-state business and purchasers would be responsible for 2015 and was estimated to have no significant effect on state revenue. HB 2400 amended the Motor Vehicle Sales and Use tled to receive a rebate of certain tax proceeds that are paid or tax to exempt the sale of a new motor vehicle when the to the hotel project. Included in the rebates are state and local acquires the motor vehicle to exclusively resell the vehicle, collected by a qualified hotel project and businesses ancillary Sales and Use and Hotel Occupancy taxes, Ad Valorem tax, and local Mixed Beverage taxes. The cities can receive the tax rebates for 10 years after the hotel initially opens. The bill also authorizes the cities of Odessa, Round Rock and Tyler to receive the same tax rebates that an eli- gible central municipality can receive for a qualified hotel purchaser is a manufacturer or distributor (as defined) who to test the vehicle on a public street or highway, or to loan it to a consumer when the consumer’s vehicle is being repaired under a manufacturer’s warranty. The bill was estimated to have an indeterminate effect on state revenue; effective Sept. 1, 2015. HB 2424 allowed an insurance company up to four project. The rebated taxes may be pledged as payment years after the date an assessment payment was made to effective May 29, 2015 and its provisions were expected to vention Authority for a refund of the Authority’s theft pre- for obligations issued for the hotel project. The bill was reduce General Revenue-related funds by $0.2 million over the two-year 2016-17 budget period; somewhat larger implications were projected in 2018 and beyond. HB 2313 exempted the sale of tangible personal prop- submit a request to the Automobile Burglary and Theft Pre- vention fee. The bill was effective Sept. 1, 2015 and expires Sept. 1, 2017. No significant fiscal implication to the state was expected. HB 2507 exempted tangible personal property sold to erty through a vending machine from Sales and Use tax if licensed digital audio broadcasting stations from Sales and machine is owned by the nonprofit organization, and the broadcast service which meets federal standards. The bill the sale is made by a 501(c)(3) nonprofit organization, the machine is stocked and maintained by individuals with spe- cial needs as part of an independent life skills and education program operated by the nonprofit organization. The bill Use tax, if the property is necessary to provide digital audio was effective Sept. 1, 2015 and was estimated to reduce 2016-17 General Revenue by $0.1 million. HB 2712 exempted certain items necessary for operat- was effective Sept. 1, 2015 and was estimated to have no ing a qualifying large data center project from Sales and Use HB 2358 exempted out-of-state businesses entering 151.359; enacted by 83rd Legislature). An owner, opera- significant effect on state revenue. Texas at the request of an in-state business, and under a mutual assistance agreement, from Texas licensing and registration requirements when their business in Texas is limited to performing disaster or emergency-related work for the repair or replacement of critical infrastructure during tax (to a degree already exempted under Tax Code Section tor or occupant of a large data center (comprising at least 250,000 square feet), and meeting other standards relating to location and use, can apply to the Comptroller for certification as a qualifying large data center project. For certification, a qualifying owner, operator or occu- a disaster response period. The out-of-state business entity pant must agree to make a capital investment of $500 million or to file or pay any state or local taxes, including Sales full-time jobs; and contract for at least 20 megawatts of trans- would not be required to register with the Secretary of State and Use and Franchise taxes, when performing disaster or emergency-related work during a disaster response period. Further, and with regard to Sales and Use tax, the bill does or more over a five-year period; create at least 40 permanent, mission capacity for operating the large data center. Owners, occupants and operators of certified data centers can claim an exemption on qualified purchases for Texas Comptroller of Public Accounts – January 2019 65 Sources of Revenue 20 years following the date of certification. A large data tive in fiscal 2020. All transferred funds are for the con- or occupant fails to make the amount of capital investment toll roads; or for paying the interest and principal of certain center’s certification can be revoked if the owner, operator or create the number of jobs required within the initial five- year time frame. If the certification is revoked, tax will be due on tax-free purchases made before the revocation. Data centers with agreements to limit the appraised value of property for property tax under Tax Code Chapter 313 would not qualify for this exemption. This bill became effective June 10, 2015. No significant fiscal impact was expected for the first several state budget periods follow- struction and maintenance of public roadways, other than general obligation bonds sold for highway purposes by the Texas Transportation Commission. The provisions of SJR 5 expire (the motor vehicle sales and use and motor vehicle rental tax revenue provision first at the close of fiscal 2029), but may be extended by a vote of the Legislature. SJR 5 was approved by Texas voters on Nov. 3, 2015 and became effective at the time of final election results. SB 31 allowed volunteer firefighter departments and ing the effective date, including 2016-17; some additional volunteer firefighter departments providing emergency ser- already exempted under Tax Code Section 151.359, would or auctions during a calendar year. These qualifying orga- reduction of sales tax revenue, with respect to amounts occur following the 15th year after certification HB 2896 provided that a broadcaster (as defined) apportion to Texas, for Franchise tax purposes, receipts from licensing income from broadcasting or otherwise distributing film programming only when Texas is the legal domicile of the broadcaster’s customer. The bill was effective for reports originally due on or after Jan. 1, 2018. As such, there was no fiscal impact expected during the vices that qualify to hold 10 Sales and Use tax-free sales nizations do not have to collect Mixed Beverage Sales tax on sales of alcoholic beverages during these sales or auc- tions, but must remit Mixed Beverage Gross Receipts tax. The organizations must have a temporary mixed beverage permit from the Texas Alcoholic Beverage Commission to sell mixed drinks. The bill was effective May 28, 2015; no significant fiscal impact to the state was expected. SB 100 removed the cap placed on capital investments 2016-17 period; a reduction in Property Tax Relief Fund for qualified enterprise projects. An enterprise project can beginning in fiscal 2018. ital investment. The bill removed the cap of $149,999,999 revenue of approximately $3 million annually was estimated HB 3230 amended the Franchise tax credit for eligible costs and expenses related to certified rehabilitation of certi- fied historic structures to allow nonprofits to earn credit for eligible costs and expenses. Under current law, such credits can be sold by the earning business to another business. This bill was effective for reports originally due on or after Jan. qualify for a Sales and Use tax refund based on their capplaced on capital investment that results in a refund of $2,500 per job. Enterprise projects that have capital invest- ments of $150,000,000 or more will receive refunds for new permanent jobs. The refund per job was changed to capture only new permanent jobs. The bill added the definition of a half enterprise project 1, 2016 and is expected to have no significant implications and provided that the maximum sales tax refund a half enter- SJR 5, a resolution to amend the Texas Constitution, Sept. 1, 2015; no significant fiscal impact to the state was to state revenue. directed up to $2.5 billion annually, from state Sales and Use tax revenue collections in excess of $28 billion each prise project may receive is $125,000. The bill was effective expected. SB 140 amended the portion of the Sales and Use year and beginning in fiscal 2018, be transferred to Fund 6, tax statute which specifically addresses agricultural items 35 percent of the portion of each year’s state Motor Vehi- exclusively provided or used for navigating machinery and the State Highway Fund. In addition, the resolution directed cle Sales and Use and Motor Vehicle Rental tax revenues exceeding $5 billion per year be transferred to the State Highway Fund. This second provision would become effec- to provide an exemption for telecommunications services equipment exclusively used on a farm or ranch for the fol- lowing purposes: building or maintaining roads; building or maintaining water facilities; or producing agricultural Texas Comptroller of Public Accounts – January 2019 66 Sources of Revenue products to be sold in the regular course of business. The would still be required to pay the Oil Field Cleanup fee General Revenue-related funds over the 2016-17 biennium Sept. 1, 2015. The bill also repealed the Sulphur Production bill was effective Sept. 1, 2015 and was expected to reduce by $0.1 million. SB 449 defined an “autocycle” as a motor vehicle (other than a tractor) that is: designed to have not more than three wheels on the ground when propelled, equipped with a steer- ing wheel, equipped with seating that does not require the of $0.00625 per barrel starting with production on or after tax, and added language to the Sales and Use tax statute to retain the exemption for sulphur from that tax. Both repeals were effective Sept. 1, 2015; no net fiscal implications were expected. SB 761 repealed the 2 percent Fireworks tax that had operator to straddle or sit astride the seat, and manufactured been imposed under Tax Code, Chapter 161. Fireworks will a motorcycle. The sale of an autocycle would be subject to which provided funding to the Volunteer Fire Department and certified to comply with federal safety requirements for Motor Vehicle Sales and Use tax in the same manner as the sale of a street-legal motorcycle. The bill was effective May 22, 2015; no fiscal implications to the state were expected. SB 724 exempted from Motor Vehicle Sales and Use tax, the purchase of a motor vehicle operated with exempt license plates (Transportation Code, Section 502.451) and used by a public agency or a commercial transportation company to provide transportation services under a contract with one of the following: a board of county school trustees or school district board of trustees under Education Code Section 34.008; or the governing body of an open-enroll- ment charter school. The bill was effective June 17, 2015. It was estimated that the bill would reduce General Revenue by $4.0 million during the 2016-17 biennium. SB 752 repealed Tax Code, Chapter 211: Inheritance taxes. This repeal did not affect any Inheritance tax liability continue to be subject to Sales and Use tax. The repealed tax, Insurance Account (an account in the General Revenue Fund), was replaced by an allocation from overall state Sales and Use collections in an amount equal to the amount of revenue that would be generated by a 2 percent tax on fireworks sold at retail in Texas (if such a tax were extant). The bill was effective Sept. 1, 2015. This repeal was estimated to reduce state revenue by $2.93 million during the 2016-17 biennium. The Volunteer Fire Department Insurance Account is reim- bursed by the aforementioned allocation of state sales tax revenue—an allocation that reduced funds available for general-purpose spending in 2016-17 by the same $2.93 million. SB 853 provided that an electronically filed sales tax permit application complies with the signature requirement under the Sales and Use tax portion of the Tax Code. Effective June 1, 2015. SB 904 added a Sales and Use tax exemption for certain accruing before Sept. 1, 2015. The bill was effective Sept. 1, emergency preparation items. The exemption would apply revenue had become negligible over the preceding decade. period beginning on the Saturday before the last Monday 2015. With regard to fiscal implications, at the time of repeal SB 755 expanded, under the Sales and Use tax statute, the definition of “sale for resale” to include a sale of a com- puter program to a provider of Internet hosting services who sells a license to use the program to an unrelated user of Internet hosting services, provided that the reseller does not retain a right to use the program under that license. A sale for resale is exempt from Sales and Use tax. The bill was effective June 10, 2015. Estimated loss of state Sales and once annually for sales taking place during a three-day in April and ending on the last Monday in April. Items that qualify for the exemption include: certain portable genera- tors, hurricane shutters, ladders, portable self-powered light sources, fuel containers, radios, batteries, smoke detectors, fire extinguishers, and first aid kits. The bill was effective Sept. 1, 2015. The reduction in General Revenue was estimated to be $2.3 million over the 2016-17 budget period. SB 1049 exempted new veteran-owned businesses Use tax revenue was projected to be $3.0 million during the from Franchise tax for the first five years of a qualifying SB 757 repealed the Crude Oil Regulatory tax starting business; provisions apply to businesses formed on or after 2016-17 biennium. with the production month of September 2015. Taxpayers business’ operations. The bill defined a new veteran-owned Jan. 1, 2016 and before Jan. 1, 2020. The bill was effective Texas Comptroller of Public Accounts – January 2019 67 Sources of Revenue Jan. 1, 2016; it was expected to result in a reduction of rev- For transactions involving aircraft, transactions between enue to the Property Tax Relief Fund of $0.5 million over related persons are taxable or not taxable to the same extent the next several years. pays tax on the purchase of an aircraft, use by a related 2016-17 and losses of between $1 and $2 million in each of SB 1356 provided a Sales and Use tax exemption for certain water-conserving products and for products with a “WaterSense” label from the U.S. Environmental Protection Agency. This exemption would be in force for a limited number of days annually, specifically a three-day period coinciding with the Memorial Day weekend. The bill was effective Oct. 1, 2015 and was expected to reduce General Revenue over the 2016-17 biennium by $7.7 million. SB 1396 amended the Sales and Use tax statute to make several changes to the way aircraft are taxed. The bill defined “certificated or licensed carriers” as carriers as transactions between unrelated persons. When a person entity is not also subject to tax. Use by a related entity of a purchaser is not taxable, if tax was paid by the purchaser or, if subject to certain exceptions, the purchase was exempt. The use of an aircraft by a fractional owner of the aircraft is not a taxable transaction. The bill added Tax Code Chapter 163, Sales and Use Taxation of Aircraft, which serves to clarify what transactions are subject to Sales and Use taxation under Chapter 151, and which transactions are not. The bill was effective Sept. 1, 2015. No significant fiscal implications were expected. SB 1563 exempted the property, revenue and income of authorized under various parts of the Federal Aviation Reg- each nonprofit corporation created by TexAmericas Center under Tax Code Section 151.328(a)(1) applies regardless of sions of Texas. The bill was effective June 16, 2015; no ulations. The bill provided that the exemption for aircraft whether the aircraft is acquired by purchase, lease or rental. The bill added a unique “sale for resale” definition for pur- from all taxes imposed by the state and political subdivifiscal implications to the state were anticipated. to a purchaser for the purpose of leasing, renting or reselling 2017: The 85th Legislature, Regular Session have to be for the sole purpose of leasing or renting, provid- was continuing unabated. The state’s unemployment rate operational control of a lessee. Operational control would be recent sharp slide in oil prices had bottomed and prices had chases of aircraft. A sale for resale would now include a sale the aircraft to another person. The sale for resale would not ed that more than 50 percent of the departures are under the defined by Federal Aviation Regulations. Liability for Sales and Use tax on divergent use does not apply to aircraft purchased under the sale for resale exemption. Use tax does not apply to aircraft brought into Texas for the sole purpose of being completed, repaired, remodeled or restored. There is also no presumption of taxable use when an aircraft is brought into Texas, if the aircraft was not purchased directly from a seller. The bill provided that tax is not due on certain aircraft after out-of-state use. Specifically, the bill exempted from use tax any aircraft purchased outside of the state that is predominantly used outside of Texas for more than a year before being brought into Texas. An aircraft is predominantly used outside of Texas if more than half of its departures are from locations outside of Texas. As calendar year 2017 began, the economic expansion had dropped from a recession-high 8.3% to 4.8%, and a recovered to approximately $50 per barrel. The Comptroller’s 2018-19 Biennial Revenue Estimate projected funds available for general-purpose spending in 2018-19 to be $104.9 billion—2.7% less than in the preceding biennium. While gross revenue collections were projected to increase somewhat in 2018-19, two major factors affecting the reve- nue estimate worked in the opposite direction: a substantially decreased ending balance to be carried into the upcoming biennium and a new constitutional provision directing an estimated $4.7 billion in sales tax to the State Highway Fund. Relatively few changes to state taxes or fees with significant fiscal implications were enacted by the 85th Legislature. HB 897 expanded the exemption from the Motor Vehi- cle Sales and Use tax authorized for a church or religious society to include the purchase or use of trailers (previously only certain motorized vehicles were exempt); and to exempt Texas Comptroller of Public Accounts – January 2019 68 Sources of Revenue all uses and purchases, not only those related to transporta- estimated that the bill would result in a loss to General Rev- motor vehicle (including a trailer) purchased or used by an an estimated loss to General Revenue of approximately $11 tion to and from church services. The bill also exempted a open enrollment charter school from the Motor Vehicle Sales and Use tax, and from Motor Vehicle Registration fees. The enue of $801,000 during the 2018-19 biennium, followed by million during the succeeding 2020-21 biennium. HB 2492 allowed insurance companies to apply for bill was effective Sept. 1, 2017; it was estimated to reduce designation as a domestic surplus lines insurer. The policies in the 2018-19 biennium. Premiums tax on surplus lines (at a tax rate of 4.85 percent General Revenue-related funds by an indeterminate amount HB 1003 allowed an entity not subject to paying Franchise tax (in this bill, certain public universities)—but incurring expenses related to rehabilitating a certified his- toric structure—to accrue Franchise tax credits related to that effort; subsequently, the credits could be sold to another issued by these companies would be subject to Insurance of taxable premiums, during fiscal year 2018), as well as any applicable Insurance Maintenance tax. The bill was effective Jan. 1, 2018; no significant impact on the state was anticipated. HB 3101 allowed the sale of alcoholic beverages on entity. This provision of the bill was set to be effective until certain passenger buses. The preparation and sales of the over the 2018-19 biennium by $2 million, with an additional age permit ($500 annually, as authorized by this bill) would Jan. 1, 2022 and was expected to reduce General Revenue loss of $2 million over the same period to the Property Tax Relief Fund. The bill also made numerous changes to the Government Code with respect to authorized investments of public funds; those changes applied to investments made on or after the bill’s effective date of June 14, 2017. HB 1944 authorized captive insurance companies to organize as captive exchanges subject to Insurance Premi- ums taxes in the same manner as other captive insurance alcoholic beverages by the holder of a passenger bus beverbe exempt from taxes imposed under the Alcoholic Bever- age Code and Sales and Use taxes. A wholesaler’s permit holder could sell liquor to a qualifying passenger bus com- pany tax free as a sale for resale and would not be required to obtain a resale certificate. The bill was effective May 29, 2017; there would be an indeterminate fiscal impact during the 2018-19 biennium. HB 3496 exempted certain farm mutual insurance com- companies. The bill was effective June 15, 2017 and no panies from the Insurance Premiums taxes, and made farm HB 2445 amended the Municipal and County Hotel tenance tax and Texas Windstorm Insurance Association significant fiscal implication to the state was anticipated. Occupancy taxes, as well as the Local Government Code in an omnibus hotel, convention, and tourism-related bill. Additional municipalities were authorized to receive rebates of certain taxes paid or collected by a qualified hotel project and businesses ancillary to the hotel project. Eligible for rebate are state Sales and Use and Hotel Occupancy taxes; also eligible for rebate are local Ad Valorem, Sales and Use, Hotel Occupancy, and Mixed Beverage taxes. The cities can mutual insurance companies exempt from Insurance Main- Guaranty Association assessments. Farm mutual companies would be exempt, unless a “fronting insurer.” An insurer is a “fronting insurer” if it cedes 85 percent or more of its direct written premium to one or more nonaffiliated insurers, or issues a policy in certain other circumstances. The bill was effective Sept. 1, 2017; no significant fiscal implication to the state was anticipated. HB 3992 exempted from the Franchise tax certain receive the tax rebates for 10 years after the hotel initially cooperatives whose single member is a farmer’s coopera- tain municipalities to use their hotel tax revenue for sports has at least 500 farmer-fruit grower members. The bill was opens. Among other provisions, the bill also allowed cerfacilities and fields; and allowed a county with no municipalities that owns an airport to use its hotel tax revenue for repairs and improvements to the airport for ten years, with restrictions. The bill became effective June 15, 2017. It was tive, as described in Section 521(b)(1) of the IRS Code, and effective June 15, 2017 and no significant fiscal implication was expected. HB 4038 amended the Sales and Use tax to expand the definition of “qualifying job,” for purposes of certification Texas Comptroller of Public Accounts – January 2019 69 Sources of Revenue as a qualifying data center, to include a new employment effective May 4, 2017; no significant fiscal implication to ten contract stating the new position is permanently assigned SB 745 amended the Sales and Use tax to transfer the position staffed by a third-party employer if there is a writ- the state was anticipated. to an associated qualifying data center. The bill was effec- exclusion from tax for services performed by employees state or units of local government was anticipated. The new performed by an employee of a temporary employment ser- tive June 1, 2017; no significant fiscal implication to the provisions applied to a data center regardless of whether its certification occurred before the bill’s effective date. HB 4054 exempted all sales of bakery items by baker- ies from Sales and Use tax, regardless of whether the items are heated or accompanied with plates or utensils. Sales of bakery items not made by bakeries would continue to be exempt only if an item is not heated and plates or utensils not provided. “Bakery” was defined as a retail location that primarily sells bakery items from a display case or counter, predominantly for eating off the premises. The bill was effective Sept. 1, 2017; no significant fiscal implication to the state or units of local government was anticipated. SB 1 was the General Appropriations Act for the to an exemption from tax. The bill specified when services vice for a host employer are exempt from Sales and Use tax. To qualify for the exemption, the host employer must meet several conditions, including the provision all equipment and supplies; and has the sole right to supervise, direct and control the work performed by the temporary employee. The bill was effective Sept. 1, 2017. The extent to which future tax revenue might decline, pursuant to evolving litigation surrounding this general Sales and Use tax issue, was unknown at the time this bill was passed. However, it was thought, at time of passage, that the clarification of statutory language provided in the bill could possibly prevent future Sales and Use tax revenue losses. SB 1083 exempted from Sales and Use tax insurance 2018-19 biennium. One provision required the Comptrol- services if those services are performed: by a certified public to encourage voluntary reporting by delinquent taxpayers member of the firm’s affiliated group; and if less than one ler of Public Accounts to establish a tax amnesty program not having a Texas Sales and Use Tax Permit, or not reg- istered for a tax or fee administered by the Comptroller’s office; and reporting by permitted taxpayers who may have underreported or owed additional taxes or fees. The amnes- ty program provided a waiver of penalty and interest, but did not apply to an established tax liability or to taxpayers accountancy (CPA) firm, by an owner of the firm, or by a percent of the firm’s, or owner of the firm’s, or member’s total revenue in the previous calendar year is from insurance services provided in Texas. The bill was effective Jan. 1, 2018. No significant fiscal implications to the state or units of local government were anticipated. SB 1120 amended the Motor Fuels Taxes chapter of already being audited. The amnesty, which took place May the Tax Code to add compressed natural gas and liquefied of $51.1 million; an additional $12.4 million was collected local or county excise or occupation taxes. The bill was 1st through June 29th, 2018, brought in total state revenue in local sales tax. SB 550 amended the Franchise tax and the Insurance Code to allow entities— insurance companies subject to natural gas to the list of motor fuels that are exempt from effective May 10, 2017. No fiscal implication to the state was anticipated. SB 1390 amended several statutes, including changes certain Insurance Premiums taxes (and, as such, not sub- to the Cigarette and the Cigar and Tobacco Products taxes. assigned a Franchise tax credit related to the rehabilitation rettes purchased exclusively for research purposes from ject to the Franchise tax) —which have purchased or been of certified historic structures, to claim all or part of the credit against their premium tax liability. The provisions related to the credit apply to these insurers to the same extent they apply to entities subject to Franchise tax. The bill was The changes were varied and included: exempting ciga- Cigarette tax and stamping requirements; changed the due date from the last day of the month to the 25th day of the month for both cigarette and tobacco product monthly distributor reports; set the Non-Settling Manufacturer fee rate to begin Feb. 1 and remain in effect through Jan. 31 Texas Comptroller of Public Accounts – January 2019 70 Sources of Revenue of the following year; and removed language that ties the tax-free for export that is subsequently sold in Texas prior to arette Tax Recovery Trust Fund. The bill became effective export exemption who do not report the subsequent sale or additional stamping allowance to participation in the Cig- Sept. 1, 2017 and was estimated to have a positive impact on state General Revenue of $11,974,000 and positive $1,149,000 on the Property Tax Relief Fund in the 2018-19 biennium. It was estimated that exactly offsetting negative implications would occur with respect to both funds during the following 2020-21 biennium; no implications were expected in 2022 or beyond. SB 1557 amended the Motor Fuels Taxes chapter of the Tax Code and addressed three major areas: tax-free fuel export. The bill provided penalties for persons claiming an who redirects the delivery within Texas. With respect to the Petroleum Product Delivery Fee (PPDF), suppliers would be required to collect and remit the PPDF (not the bulk facility operator) defined “supplier” as it relates to the PPDF; and stipulated that the person who directed the delivery of the product will pay the PPDF in some circumstances. The bill became effective Jan. 1, 2018; the revenue effect was estimated to be positive, but indeterminate. SB 2087 amended the Insurance Premiums taxes to sold to an unlicensed purchaser, the exporting of fuel, and create a health insurance risk pool to provide low-cost insur- be imposed on the sale of tax-free fuel sold to an unlicensed The risk pool would be exempt from all Texas state taxes, in the Petroleum Product Delivery Fee. Motor Fuels tax would purchaser. The person who sold the fuel to an unlicensed purchaser would be required to collect and remit the tax to the Comptroller’s office. The bill created an additional reporting requirement for gasoline or diesel fuel purchased ance to the public, if federal funds were to become available. the event the pool became operative. The bill was effective June 12, 2017. There was no anticipated impact to state General Revenue. There was an estimated 2018-19 cost to the Premium Stabilization Fund of $42.7 million. µ Texas Comptroller of Public Accounts – January 2019 71 Sources of Revenue Texas Comptroller of Public Accounts January 2019 72 State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Texas Tax and Fee Profiles Introduction These profiles include summary information for each tax and fee discussed in a standard format. The following are brief definitions of the types of information found in the profiles. Rate and Base The amount of a tax or fee and the individuals, entities, goods or services to which it applies. State: The current fee or tax rate as set by the state of Texas. Local: The current fee or tax rate as set by the local entity imposing it. Federal: The current fee or tax rate as set by the federal government. Major Exemptions: The individuals, entities, goods or services exempted from the fee or tax. Administration Summary information on levying, collecting and processing the tax or fee. Agency: State agency responsible for collecting and/or processing the fee or tax. Number of Fees Collected/Taxpayers: An estimated count of recorded payers of a tax or the number of fees collected as of the publication date of this report. Payment Cycle: How often a fee or tax is required to be remitted to the state. Due Date: The date by which a fee or tax is required to be remitted within the payment cycle. Remitted by: The entity that collects and sends the respective fee or tax to the responsible state agency. Legal Citation(s) The legal authority for the levy and collection of the fee or tax, primarily Texas statutes and/or the Texas Constitution. Enacted The date and/or the enacting legislative session the fee or tax was created. Rate and Base Changes List of legislative actions that have significant impact on the amount of fee or tax levied. Allocation A list of funds and accounts to which the fee or tax is deposited, allocated or transferred. Net Collections Historical collections of the fee or tax from 1972 through the last completed fiscal year. Total Revenue: Total annual fee/tax amount collected and deposited in the state treasury. A profile with only this column heading indicates that the fee or tax has never been deposited or allocated to a trust fund in the history of that fee or tax. Revenue All Funds: Total annual fee/tax amount collected and deposited in the state treasury including amounts deposited to trust and local funds. These profiles have amounts deposited to trust funds as well as other funds. These profiles will have this column and a Revenue Excludes Trust column. Revenue Excludes Trust: Total annual fee/tax amount collected and deposited in the state treasury excluding deposits made to trust and local funds. Percent Change: The growth rate of fee/tax collections from one year to the next. This rate does not include amounts deposited to trust and local funds. Percent of Other Revenue: The percentage of the respective fee as a share of all state fees. This does not include amounts deposited to trust funds, local funds or federal revenue. Percent of Taxes: The percentage of the respective tax as a share of all state taxes. This does not include amounts deposited to trust funds or local funds. Texas Comptroller of Public Accounts – January 2019 73 Sources of Revenue AIR POLLUTION CONTROL FEES Revenue Object 3375 RATE AND BASE State: Various fees and penalties to ensure that industrial construction meets federal and state pollution standards; rates range from $25 to $75,000 Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Commission on Environmental Quality No. of Fees Collected: 12,717 Payment Cycle: Annual fees — November 30th; permits — various dates Due Date: November 30th for annual fees; permits on various dates Remitted By: Permits: industrial entities Penalties: entities releasing unauthorized air contaminants LEGAL CITATION(S) Texas Health and Safety Code, §§ 382.05155, 382.062 and 382.0621 ENACTED 66th Legislature (1979) Various fees between $50 and $7,500 RATE AND BASE CHANGES 69th Legislature (1985) Various fees between $50 and $50,000 72nd Legislature (1991) Various fees between $25 and $75,000 83rd Legislature (2013) Added greenhouse gas emission fee on expedited application surcharge ALLOCATION General Revenue Fund 0001 — greenhouse gas emission fee and expedited application surcharge GR Account - Operating Permit Fees 5094 — Emissions fees GR Account - Clean Air 0151 — All other fees Texas Comptroller of Public Accounts – January 2019 74 Sources of Revenue AIR POLLUTION CONTROL FEES (concluded) Revenue Object 3375 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 190 428 462 7,455 7,700 10,762 11,211 11,986 13,473 18,810 23,935 54,266 60,321 57,332 53,173 54,119 50,191 Percent Change 125.8 8.0 1,513.3 3.3 39.8 4.2 6.9 12.4 39.6 27.2 126.7 11.2 (5.0) (7.3) 1.8 (7.3) Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.02 0.02 0.18 0.22 0.31 0.30 0.30 0.31 0.35 0.35 0.67 0.72 0.63 0.57 0.59 0.48 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 49,286 51,536 47,346 51,878 57,192 53,759 55,566 56,709 57,403 51,860 49,088 51,079 60,051 64,504 63,629 61,461 60,046 59,872 59,694 Percent Change (1.8) 4.6 (8.1) 9.6 10.2 (6.0) 3.4 2.1 1.2 (9.7) (5.3) 4.1 17.6 7.4 (1.4) (3.4) (2.3) (0.3) (0.3) Percent of Other Revenue 0.50 0.49 0.44 0.46 0.47 0.41 0.39 0.36 0.30 0.33 0.32 0.30 0.34 0.34 0.32 0.29 0.26 0.26 0.24 No revenue deposited to trust 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Commission on Environmental Quality Texas Comptroller of Public Accounts – January 2019 75 Sources of Revenue BEER TAX Revenue Object 3258 RATE AND BASE State: $6 per 31-gallon barrel Local: None Federal: $18.00 per 31-gallon barrel* Major Exemptions: Shipments out-of-state for consumption out-of-state; federal military facility sales * For calendar years 2018 and 2019: Taxable barrels 6 million or less – various reduced tax rates, depending on volume and taxpayer type, from $3.50 to $16 per barrel. Taxable barrels of over 6 million – $18 per barrel for all taxpayers. ADMINISTRATION Agency: Texas Alcoholic Beverage Commission Number of Taxpayers: 362 (note: including brew pubs) Payment Cycle: Monthly Due Date: 15th day of the month for the preceding month Remitted By: Beer distributors, manufacturers, and brew pubs LEGAL CITATION(S) Texas Alcoholic Beverage Code, § 203.01 ENACTED 44th Legislature (1935) $1.24 per barrel RATE AND BASE CHANGES 51st Legislature (1950) $1.364 per barrel (temporary) 52nd Legislature (1951) $1.37 per barrel 53rd Legislature (1954) $2 per barrel 54th Legislature (1955) $4.30 per barrel 62nd Legislature (1971) $5 per barrel 68th Legislature (1984) $6 per barrel (eff. 10/2/84) ALLOCATION General Revenue Fund 0001 and/or certain Events Trust Funds — 100% Texas Comptroller of Public Accounts – January 2019 76 Sources of Revenue BEER TAX (concluded) Revenue Object 3258 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 39,329 41,083 46,435 46,514 50,620 53,100 55,565 59,976 63,697 67,571 72,595 70,862 72,347 77,842 87,790 85,641 83,219 83,773 85,356 86,207 87,438 89,309 90,178 90,802 92,259 92,433 94,812 97,167 Revenue Excludes Trust Percent Change $ 39,329 41,083 46,435 46,514 50,620 53,100 55,565 59,976 63,697 67,571 72,595 70,862 72,347 77,842 87,790 85,641 83,219 83,773 85,356 86,207 87,438 89,309 90,178 90,802 92,259 92,433 94,812 97,167 4.5 13.0 0.2 8.8 4.9 4.6 7.9 6.2 6.1 7.4 (2.4) 2.1 7.6 12.8 (2.4) (2.8) 0.7 1.9 1.0 1.4 2.1 1.0 0.7 1.6 0.2 2.6 2.5 Percent of Taxes 1.68 1.59 1.53 1.38 1.29 1.20 1.10 1.11 1.00 0.87 0.84 0.83 0.78 0.73 0.86 0.83 0.67 0.65 0.63 0.58 0.55 0.53 0.50 0.48 0.47 0.44 0.42 0.41 1 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2015 2016 2017 2018 $ 99,776 100,982 102,453 101,877 102,375 101,064 104,418 103,882 108,325 109,236 103,958 104,986 105,039 103,849 102,611 103,088 104,846 104,475 104,475 Revenue Excludes Trust Percent Change $ 99,776 100,982 102,453 101,877 102,375 101,064 104,418 103,882 108,325 109,236 103,958 104,843 104,949 103,743 102,524 103,007 104,761 104,395 104,418 2.7 1.2 1.5 (0.6) 0.5 (1.3) 3.3 (0.5) 4.3 0.8 (4.8) 0.9 0.1 (1.1) (1.2) 0.5 1.7 (0.3) 0.0 Percent of Taxes 0.39 0.37 0.39 0.39 0.37 0.34 0.31 0.28 0.26 0.29 0.29 0.27 0.24 0.22 0.20 0.20 0.22 0.21 0.19 Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed), and the Motor Sports and Racing Trust Fund started receiving alcoholic beverage taxes 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Alcoholic Beverage Commission Texas Comptroller of Public Accounts – January 2019 77 Sources of Revenue BOAT AND BOAT MOTOR SALES AND USE TAX Revenue Object 3111 RATE AND BASE State: 6.25% of the total consideration on every retail sale of a taxable boat or boat motor; $15 tax for each taxable boat or boat motor brought into the state by a new resident. Tax does not apply to boats propelled by paddle or oar; also not applicable to craft in excess of 65 feet Local: None, but counties retain 5% of collections Federal: None Major Exemptions: Sales to government, certain emergency service organizations ADMINISTRATION Agency: Texas Parks and Wildlife Department Number of Taxpayers: 91 (Texas Parks and Wildlife; 90 county tax assessor-collectors) Payment Cycle: Monthly remittance to Comptroller of Public Accounts Due Date: 10th day of the month for the preceding month Remitted By: Texas Parks and Wildlife Department or county tax assessor-collectors LEGAL CITATION(S) Texas Tax Code, §§ 160.021–160.023, 160.041, 160.121 ENACTED 72nd Legislature (1991) 6.25% RATE AND BASE CHANGES 75th Legislature (1997) Base expanded to include sales of commercial boats not more than 65 feet long 77th Legislature (2001) Certain emergency services organizations exempted from taxation ALLOCATION If paid to a county tax assessor-collector: Local county government — 5% General Revenue Fund 0001 — 95% If paid to the Texas Parks and Wildlife Department: GR Account - Game, Fish, and Water Safety 0009 — 5% General Revenue Fund 0001 — 95% Texas Comptroller of Public Accounts – January 2019 78 Sources of Revenue BOAT AND BOAT MOTOR SALES AND USE TAX (concluded) Revenue Object 3111 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17,016 25,149 29,738 35,970 35,879 36,624 41,628 41,918 Percent Change 47.8 18.2 21.0 (0.3) 2.1 13.7 0.7 Percent of Taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.11 0.15 0.16 0.19 0.18 0.17 0.18 0.18 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † 1 Total Revenue † $ 46,434 42,138 39,727 43,127 48,923 54,776 56,854 61,777 62,466 48,328 46,153 47,373 49,348 53,510 56,741 60,243 66,556 70,366 76,272 Percent Change Percent of Taxes 10.8 (9.3) (5.7) 8.6 13.4 12.0 3.8 8.7 1.1 (22.6) (4.5) 2.6 4.2 8.4 6.0 6.2 10.5 5.7 8.4 0.18 0.15 0.15 0.17 0.18 0.18 0.17 0.17 0.15 0.13 0.13 0.12 0.11 0.11 0.11 0.12 0.14 0.14 0.14 No revenue deposited to trust Before 1992, Boat and Boat Motor tax receipts were deposited under object code 3102 for the Sales and Use tax 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 79 Sources of Revenue CEMENT PRODUCTION TAX Revenue Object 3136 RATE AND BASE State: $0.0275 per 100 pounds on first intrastate distribution, sale or use of cement manufactured within or imported into the state Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 24 Payment Cycle: Monthly Due Date: 25th day of the month for the preceding month Remitted By: Manufacturer, producer or importer LEGAL CITATION(S) Texas Tax Code, § § 181.001, 181.002 ENACTED 42nd Legislature (1931) $0.0125 per 100 pounds RATE AND BASE CHANGES 47th Legislature (1941) $0.025 per 100 pounds 52nd Legislature (1951) $0.0275 per 100 pounds ALLOCATION General Revenue Fund 0001 — 75% GR Account - Foundation School 0193 — 25% Texas Comptroller of Public Accounts – January 2019 80 Sources of Revenue CEMENT PRODUCTION TAX (concluded) Revenue Object 3136 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 3,604 3,817 3,811 3,260 3,623 4,031 4,793 4,726 5,220 5,170 5,183 5,586 6,326 5,862 5,853 4,589 4,341 3,888 3,988 3,973 3,999 4,589 4,953 5,111 5,632 5,384 6,295 6,675 Percent Change Percent of Taxes 5.9 (0.1) (14.5) 11.1 11.3 18.9 (1.4) 10.5 (0.9) 0.2 7.8 13.3 (7.3) (0.1) (21.6) (5.4) (10.4) 2.6 (0.4) 0.7 14.7 7.9 3.2 10.2 (4.4) 16.9 6.0 0.15 0.15 0.13 0.10 0.09 0.09 0.10 0.09 0.08 0.07 0.06 0.07 0.07 0.05 0.06 0.04 0.04 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 7,182 7,635 7,361 7,702 8,280 8,770 9,025 9,630 9,851 6,990 6,184 6,127 7,035 8,007 8,680 9,145 9,231 9,158 9,287 Percent Change Percent of Taxes 7.6 6.3 (3.6) 4.6 7.5 5.9 2.9 6.7 2.3 (29.0) (11.5) (0.9) 14.8 13.8 8.4 5.3 0.9 (0.8) 1.4 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 No revenue deposited to trust 10,000 (Amounts in Thousands) 8,000 6,000 4,000 2,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 81 Sources of Revenue CIGARS AND TOBACCO PRODUCTS TAX Revenue Object 3278 RATE AND BASE State: Cigar rate varies with weight per 1,000, constituents and price: from 1¢ per 10 cigars for weight under 3 lbs. to $15 per 1,000 cigars for weight over 3 lbs. Tobacco products other than cigars (snuff, chewing tobacco, pipe tobacco, roll-your-own tobacco and other): $1.22 per ounce of manufacturer’s list weight Local: None Federal: Large cigars — 52.75% of sales price, not to exceed $402.60 per 1,000 cigars; Small cigars — $50.33 per 1,000 cigars; Snuff — $1.51 per pound; Chewing tobacco — $0.5033 per pound; Pipe tobacco — $2.8311 per pound; and Roll-your-own tobacco — $24.78 per pound Major Exemptions: Importation with retail value at 25 cents or less; Indian tribal facility sales; federal institution sales ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 372 Payment Cycle: Monthly Due Date: 25th of month for distributors Remitted By: Cigar and tobacco wholesalers and distributors LEGAL CITATION(S) Texas Tax Code, §§ 155.021, 155.0211, 155.2415 ENACTED (Before 1959 — taxed under the cigarette tax) 56th Legislature (1959) $0.01 per 10 small cigars; $7.50 per 1,000 large cigars <3.3 cents each (retail price); $15.00 per 1,000 large cigars >3.3 cents each (retail price) RATE AND BASE CHANGES 60th Legislature (1967) Rate for certain large cigars reduced to $12.00 per 1,000 62nd Legislature (1971) Changed 3.3 cent price threshold to factory price from retail price 64th Legislature (1975) Rate for certain large cigars reduced to $11.00 per 1,000 65th Legislature (1977) $11 per 1,000 rate extended to a broader range of large cigars 68th Legislature (1984) Removed exemption for snuff 70th Legislature (1987) 28.125% for tobacco products other than cigars (eff. 10/1/87) 71st Legislature (1990) 35.213% for tobacco products other than cigars (eff. 07/01/90) 79th Legislature, 3rd Called Session (2006) 40% for tobacco products other than cigars (eff. 01/01/07) 81st Legislature (2009) Per ounce, $1.10 (eff. 09/01/09), $1.13 (eff. 09/01/10), $1.16 (eff. 09/01/11), $1.19 (eff. 09/01/12), $1.22 (eff. 12/01/13) for tobacco products other than cigars ALLOCATION General Revenue Fund 0001 — All tax revenue from cigars; from non-cigar tobacco products (1) tax revenues that would be generated under the previous manufacturer’s list price-based method of taxation at 35.213%. In addition to cigars and (1), tax proceeds remaining (2) after the (initial) allocation to GR and the allocation to the Property Tax Relief Fund, if the Comptroller were to determine that the unencumbered beginning balance in the Physician Education Loan Repayment Account is suffcient to fund the legislatively mandated purposes of the account; otherwise, the Physician Education account would receive all revenue under (2). Property Tax Relief Fund 0304 — All non-cigar tax revenue that would be generated under the previous manufacturer’s list pricebased method of taxation at 40% less the amount (see (1) above) initially allocated to GR. GR Account - Physician Loan Repayment Program 5144 — For non-cigar tobacco products, account would receive all of the revenue calculated in the GR section above under (2) if the Comptroller did not make the determination described; otherwise, this account would receive no revenue under (2). Texas Comptroller of Public Accounts – January 2019 82 Sources of Revenue CIGARS AND TOBACCO PRODUCTS TAX (concluded) Revenue Object 3278 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 8,622 8,834 8,772 9,220 9,396 9,682 9,973 10,904 12,123 12,073 9,891 9,890 10,186 20,041 22,938 24,658 27,177 29,080 31,221 43,032 49,788 52,468 54,623 59,299 61,247 61,649 62,853 64,620 Percent Change Percent of Taxes 2.5 (0.7) 5.1 1.9 3.0 3.0 9.3 11.2 (0.4) (18.1) (0.0) 3.0 96.7 14.5 7.5 10.2 7.0 7.4 37.8 15.7 5.4 4.1 8.6 3.3 0.7 2.0 2.8 0.37 0.34 0.29 0.27 0.24 0.22 0.20 0.20 0.19 0.16 0.11 0.12 0.11 0.19 0.22 0.24 0.22 0.23 0.23 0.29 0.31 0.31 0.30 0.31 0.31 0.29 0.28 0.27 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 38,336 40,854 67,288 57,834 84,940 78,204 80,538 85,558 86,176 108,874 163,698 171,299 198,291 203,811 213,374 225,848 223,624 230,027 229,444 Percent Change Percent of Taxes (40.7) 6.6 64.7 (14.0) 46.9 (7.9) 3.0 6.2 0.7 26.3 50.4 4.6 15.8 2.8 4.7 5.8 (1.0) 2.9 (0.3) 0.15 0.15 0.26 0.22 0.30 0.26 0.24 0.23 0.21 0.29 0.46 0.44 0.45 0.43 0.42 0.44 0.46 0.46 0.41 No revenue deposited to trust 250,000 (Amounts in Thousands) 200,000 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; US Treasury Texas Comptroller of Public Accounts – January 2019 83 Sources of Revenue CIGARETTE TAX Revenue Object 3275 * RATE AND BASE State: $70.50 per 1,000 cigarettes weighing 3 pounds or less per 1,000 ($1.41 per pack of 20); $72.60 per 1,000 cigarettes weighing more than 3 pounds per 1,000 ($1.452 per pack of 20) Local: None Federal: $1.01 per pack of 20 small cigarettes ($50.33 per 1,000 cigarettes); $2.11 per pack of 20 large cigarettes ($105.69 per 1,000 cigarettes) Major Exemptions: Importation from other states of up to 200 cigarettes for personal use; Indian tribal facility sales; federal institution sales ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 72 Payment Cycle: Monthly Due Date: Upon receipt of tax stamps unless eligible for credit purchases; credit purchases due 30 days after receipt of tax stamps, except at the end of each biennium when tax stamp purchases made before Aug. 31 must be paid in full by that date Remitted By: Cigarette wholesalers and distributors LEGAL CITATION(S) Texas Tax Code, §§ 154.021, 154.601 - 154.6035 ENACTED 42nd Legislature (1931) 3 cents per pack of 20 cigarettes RATE AND BASE CHANGES 51st Legislature (1950) 4 cents per pack 54th Legislature (1955) 5 cents per pack 56th Legislature (1959) 8 cents per pack 59th Legislature (1965) 11 cents per pack 61st Legislature (1969) 15.5 cents per pack 62nd Legislature (1971) 18.5 cents per pack 68th Legislature (1984) 19.5 cents per pack (eff. 10/2/84 to 8/31/85); 20.5 cents (eff. 9/1/85) 70th Legislature (1987) 26 cents per pack (eff. 10/1/87) 71st Legislature (1990) 41 cents per pack (eff. 7/1/90) 79th Legislature, 3rd Called Session (2006) $1.41 per pack (eff. 1/1/07) ALLOCATION General Revenue Fund 0001 — All tax revenues attributable to a tax rate of $0.41 per pack Property Tax Relief Fund 0304 — All tax revenues attributable to the portion of the tax rate above $0.41 per pack, regardless of weight. Texas Comptroller of Public Accounts – January 2019 84 Sources of Revenue CIGARETTE TAX (concluded) Revenue Object 3275 * NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 222,986 234,833 239,180 251,194 269,832 277,867 289,852 298,381 309,642 327,510 336,147 345,074 330,085 353,681 355,777 346,185 389,822 399,303 400,358 593,968 533,005 564,367 518,714 579,644 505,522 593,121 498,070 558,949 Percent Change Percent of Taxes 5.3 1.9 5.0 7.4 3.0 4.3 2.9 3.8 5.8 2.6 2.7 (4.3) 7.1 0.6 (2.7) 12.6 2.4 0.3 48.4 (10.3) 5.9 (8.1) 11.7 (12.8) 17.3 (16.0) 12.2 9.51 9.09 7.90 7.44 6.89 6.29 5.76 5.54 4.88 4.23 3.89 4.06 3.55 3.30 3.48 3.37 3.15 3.09 2.94 3.98 3.36 3.32 2.86 3.07 2.56 2.80 2.20 2.37 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † Total Revenue † $ 493,444 543,807 472,746 524,883 449,637 521,164 465,366 1,248,481 1,360,719 1,447,919 1,225,066 1,388,206 1,229,811 1,394,278 1,129,081 1,306,566 1,164,738 1,292,801 1,091,095 Percent Change Percent of Taxes (11.7) 10.2 (13.1) 11.0 (14.3) 15.9 (10.7) 168.3 9.0 6.4 (15.4) 13.3 (11.4) 13.4 (19.0) 15.7 (10.9) 11.0 (15.6) 1.95 2.00 1.80 2.01 1.61 1.75 1.39 3.38 3.29 3.83 3.46 3.57 2.79 2.92 2.21 2.53 2.40 2.60 1.96 Revenue object code 3650 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust 1,500,000 (Amounts in Thousands) 1,200,000 900,000 600,000 300,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; US Treasury Texas Comptroller of Public Accounts – January 2019 85 Sources of Revenue CITY SALES TAX SERVICE FEES Revenue Object 3106 RATE AND BASE State: Administrative services fee of 2% of the tax collections made in those cities that impose local option sales taxes Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts No. of Fees Collected: 1,157 Payment Cycle: N/A Due Date: Assessed prior to allocation of municipal sales tax to each city Remitted By: N/A LEGAL CITATION(S) Texas Tax Code § 321.503 ENACTED HB 207, 60th Leg. (1967) RATE AND BASE CHANGES ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 86 Sources of Revenue CITY SALES TAX SERVICE FEES (concluded) Revenue Object 3106 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 5,781 5,673 6,805 8,014 9,358 12,347 9,245 17,426 14,597 16,109 18,077 18,433 17,240 18,699 20,791 22,571 24,679 26,156 28,940 32,926 34,266 36,671 39,796 43,978 47,055 Percent Change Percent of Other Revenue (1.9) 20.0 17.8 16.8 31.9 (25.1) 88.5 (16.2) 10.4 12.2 2.0 (6.5) 8.5 11.2 8.6 9.3 6.0 10.6 13.8 4.1 7.0 8.5 10.5 7.0 0.00 0.00 0.00 0.74 0.63 0.63 0.65 0.71 0.72 0.43 0.74 0.65 0.64 0.61 0.45 0.49 0.53 0.56 0.56 0.57 0.49 0.42 0.41 0.41 0.40 0.43 0.48 0.45 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 50,697 54,249 54,502 54,186 58,134 62,181 70,483 76,429 80,919 81,136 77,056 81,770 88,246 94,891 100,550 106,743 107,591 110,044 117,720 Percent Change 7.7 7.0 0.5 (0.6) 7.3 7.0 13.4 8.4 5.9 0.3 (5.0) 6.1 7.9 7.5 6.0 6.2 0.8 2.3 7.0 Percent of Other Revenue 0.52 0.51 0.51 0.48 0.48 0.47 0.50 0.48 0.42 0.52 0.51 0.48 0.50 0.51 0.51 0.51 0.46 0.47 0.47 No revenue deposited to trust 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 87 Sources of Revenue COURT COSTS Revenue Object 3704 RATE AND BASE State: Various rates depending upon specific court cost. In many instances, and by category of offense, the court cost is: felony, $133; class A or B misdemeanor, $83; nonjailable misdemeanor, $40 Local: None; generally, local governments may retain 10% of collections as a service fee Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts No. of Fees Collected: N/A Payment Cycle: Quarterly Due Date: Last day of the month for the preceding quarter Remitted By: City and county treasurers LEGAL CITATION(S) Texas Government Code, Chapter 102; Texas Local Government Code, Chapter 133 Texas Code of Criminal Procedures, Chaper 102. Various other statutory codes and chapters. ENACTED Various dates depending on penalty RATE AND BASE CHANGES 66th Legislature (1979) Additional fee for compensation to victims of crime (CVC), from $10 to $15 depending on offense 67th Legislature (1981) CJP rates increased from $5 to $20, depending on offense 68th Legislature (1983) CVC rates increased from $15 to $20, depending on offense; $12.50 fee for CVC on certain misdemeanors. 69th Legislature (1985) Reduced misdemeanor offense CVC fee from $12.50 to $3 70th Legislature (1987) Expanded base for CVC to include a violation of a municipal ordinance 71st Legislature (1989) Increased misdemeanor offense fee for violation of municipal ordinance for CVC from $3 to $5; added fee for abused children counseling from $500 to $1,000 for certain felony convictions 72nd Legislature (1991) Additional fee for comprehensive rehabilitation from $5 to $25 on certain traffic offenses 73rd Legislature (1993) Rates increased for CVC from $15 to $45 depending on offense 75th Legislature (1997) Consolidated fees to single court case fee except for CVC; est. single “court cost for special services” 77th Legislature (2001) Established fees, with a maximum of $250 for certain offenses, related to DNA testing 78th Legislature (2003) EMS and Trauma Facilities/Fund. HB 2424: consolidated court fee, CVC Auxillary, Sexual Assault Program Fund 80th Legislature (2007) Additional $60 on class B misdemeanors or higher upon conviction for intoxication/drug offense 83rd Legislature (2013) $5 on any criminal conviction for Statewide Electronic Filing System; $2 in certain courts for Truancy Prevention ALLOCATION Many of these costs are split between several of the following funds and accounts: General Revenue Fund 0001 State Highway Fund 0006 Judicial Fund 0573 Law Enforcement and Custodial Officer Supplement Retirement Trust Fund 0977 GR Account - Texas Commission on Law Enforcement 0116 GR Account - Criminal Justice Planning 0421 GR Account - Compensation To Victims of Crime 0469 GR Account - Judicial and Court Personnel Training 0540 GR Account - Bill Blackwood Law Enforcement Management Institute 0581 GR Account - Crime Stoppers Assistance 5012 GR Account - Breath Alcohol Testing 5013 GR Account - Center For Study and Prevention of Juvenile Crime and Delinquency 5029 GR Account - Fair Defense 5073 GR Account - Correctional Management Institute and Criminal Justice Center 5083 GR Account - EMS, Trauma Facilities, Trauma Care Systems 5108 GR Account - Emergency Radio Infrastructure 5153 GR Account - Statewide Electronic Filing System 5157 GR Account - Truancy Prevention and Diversion 5164 GR Account - Drug Court 5174 Texas Comptroller of Public Accounts – January 2019 88 Sources of Revenue COURT COSTS (concluded) Revenue Object 3704 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 2 1992 1993 1994 1995 1996 1997 1998 1999 $ 4,439 5,702 6,322 7,236 7,799 8,597 11,080 13,046 14,688 15,793 22,496 26,769 31,124 40,290 42,598 42,753 52,512 58,244 68,833 68,328 65,901 79,478 99,118 126,628 133,120 142,640 160,133 185,189 Revenue Excludes Trust Percent Change $ 4,439 5,702 6,322 7,236 7,799 8,597 11,080 13,046 14,688 15,793 22,496 26,769 31,124 40,290 42,598 42,753 52,512 58,244 68,833 68,324 65,901 79,478 99,118 126,628 133,120 142,640 160,132 185,189 10.9 18.2 (0.7) (3.5) 20.6 24.7 27.8 5.1 7.2 12.3 15.6 Percent of Other Revenue 0.86 1.01 0.92 0.93 0.86 0.79 0.90 0.99 0.86 0.74 0.96 1.20 1.24 1.35 1.05 1.22 1.49 1.57 1.70 1.59 1.22 1.15 1.23 1.50 1.47 1.53 1.73 1.78 1 2 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 2013 2014 2015 2016 2017 2018 $ 197,065 205,700 203,973 206,488 213,527 226,524 250,673 279,092 289,498 292,883 294,903 290,301 281,289 283,047 277,612 268,740 265,054 253,705 251,386 $ 197,065 205,700 203,973 206,488 213,527 226,524 250,672 279,092 289,498 292,883 294,903 290,301 281,289 283,047 257,446 249,722 246,439 236,132 234,030 6.4 4.4 (0.8) 1.2 3.4 6.1 10.7 11.3 3.7 1.2 0.7 (1.6) (3.1) 0.6 (9.0) (3.0) (1.3) (4.2) (0.9) Percent of Other Revenue 2.02 1.95 1.89 1.84 1.75 1.72 1.77 1.76 1.49 1.88 1.95 1.71 1.59 1.51 1.31 1.19 1.06 1.02 0.94 Prior to 2012, object codes 3704, 3712, 3713 and 3721 were used in calculating the Net Collections. Beginning in 2012, 3712, 3713, and 3721 were inactivated and 3704 is used for all Net Collections. Minor amounts of fees deposited into Trust: $3,600 in 1991, $10 in 1997 and $1,050 in 2006 300,000 (Amounts in Thousands) 250,000 200,000 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 89 Sources of Revenue COURT FINES Revenue Object 3710 RATE AND BASE State: Not more than $500 for contempt of court; $30 state traffic fine; fines related to metal recycling of up to $10,000; $25 to $250 for certain offenses relating to use of seat belts; state portion of fines and penalties related to Water Code Chapter Local: In some instances, municipalities or counties may retain 5%-10% of collections as a service fee Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts; Texas Commission on Environmental Quality for water penalties No. of Fees Collected: N/A Payment Cycle: N/A Due Date: Varies. As determined by the court, upon receipt, quarterly or annually, depending on the fine Remitted By: Municipality or county LEGAL CITATION(S) Texas Government Code § 21.002 Texas Transportation Code §§ 542.4031, 545.412-545.413 Texas Occupation Code § 1956.040 Texas Water Code § 7.190 ENACTED Various, depending on the fine. Beginning with contempt of court fine in 1892 RATE AND BASE CHANGES 75th Legislature (1997) Added fines related to Water Code violations 77th Legislature (2001) Added seat belt/child safety belt fine 78th Legislature (2003) Added state traffic fine 82nd Legislature (2011) Added metal recycling fee ALLOCATION State $30 Traffic Fine: General Revenue Fund 0001 — 67% GR Account - Designated Trauma Facility and EMS 5111 — 33% Note: In the event proceeds from the $30 state traffic fine combined with those of the driver point surcharge program (Revenue Object 3024) exceed $250 million in a year, the excess is deposited to the Texas Mobility Fund 0365. All Other Court Fines: General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 90 Sources of Revenue COURT FINES (concluded) Revenue Object 3710 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds Revenue Excludes Trust Percent Change Percent of Other Revenue 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 0 0 0 0 0 0 0 0 0 0 0 0 1 2 1 2 2 3 3 3 1 3 1 2 2 4 10 (4) $ 0 0 0 0 0 0 0 0 0 0 0 0 1 2 1 2 2 3 3 3 1 3 1 2 2 4 10 (4) 87.3 169.7 (28.7) 59.7 (13.6) 58.5 6.3 (14.9) (75.4) 358.6 (62.6) 45.8 34.3 76.6 147.1 (143.0) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.00) 1 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 3 42 289 4,911 61,859 91,933 96,108 99,465 102,170 98,044 98,861 93,188 88,816 90,143 88,783 83,060 80,809 74,992 75,178 Revenue Excludes Trust Percent Change Percent of Other Revenue $ 3 42 289 4,911 61,859 91,933 96,108 99,465 102,170 98,044 98,861 93,188 88,816 90,143 88,783 83,060 80,809 74,992 75,178 (159.0) 1,528.5 581.4 1,602.2 1,159.6 48.6 4.5 3.5 2.7 (4.0) 0.8 (5.7) (4.7) 1.5 (1.5) (6.4) (2.7) (7.2) 0.2 0.00 0.00 0.00 0.04 0.51 0.70 0.68 0.63 0.53 0.63 0.65 0.55 0.50 0.48 0.45 0.39 0.35 0.32 0.30 Only one refund of a Court Fine was recorded to a Trust in 1990 for $795.90 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 91 Sources of Revenue CREDIT CARD AND ELECTRONIC SERVICES RELATED FEES Revenue Object 3879 RATE AND BASE State: Fees assessed by an agency for the use of a credit, charge or debit card to pay fees and penalties; fees related to electronic services transactions, including processing and convenience fees; and cost recovery fees in relation to the State Electronic Internet Portal project Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Various authorized state agencies No. of Fees Collected: N/A Payment Cycle: N/A Due Date: At time payment is remitted Remitted By: Users of cards LEGAL CITATION(S) Texas Government Code §§ 403.023, 2054.2591 ENACTED HB 2048, 79th Leg., R.S. (2005) RATE AND BASE CHANGES ALLOCATION The appropriated fund or account Texas Comptroller of Public Accounts – January 2019 92 Sources of Revenue CREDIT CARD AND ELECTRONIC SERVICES RELATED FEES (concluded) Revenue Object 3879 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † Percent Change $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Year 2000 2001 2002 1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † 1 Total Revenue † $ 0 0 6,695 16,834 20,613 22,436 27,037 34,836 54,344 55,166 59,691 63,656 68,989 73,291 77,628 72,600 79,296 78,469 83,861 Percent Change Percent of Other Revenue 151.4 22.4 8.8 20.5 28.8 56.0 1.5 8.2 6.6 8.4 6.2 5.9 (6.5) 9.2 (1.0) 6.9 0.00 0.00 0.06 0.15 0.17 0.17 0.19 0.22 0.28 0.35 0.39 0.37 0.39 0.39 0.39 0.34 0.34 0.34 0.34 No revenue deposited to trust Prior to fiscal 2002, Revenue Object code 3879 was used for Amortization of Premium or Discounts on Notes and Certificates of Deposit and not used in calculating the Net Collections for this revenue source. 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 93 Sources of Revenue DIESEL FUEL TAX Revenue Object 3008 * RATE AND BASE State: 20 cents per gallon (eligible transit companies qualify for a refund of one-half cent per gallon) Local: None Federal: $0.244 per gallon Major Exemptions: Federal government; aircraft and aircraft servicing equipment; scheduled inter-city bus routes; volunteer fire departments; Texas public school districts; commercial transportation companies and/or certain metropolitan rapid transit authorities providing public school transportation services to Texas school districts; diesel fuel used as feedstock in manufacturing certain tangible personal property; exemptions available for agricultural/ industrial/commercial, marine, railway engine and off-road uses only if dyed diesel fuel is used ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 1,210 (not including interstate truckers) Payment Cycle: Suppliers, permissive suppliers, distributors, importers, exporters and blenders — monthly; dyed diesel fuel bonded users and International Fuel Tax Agreement (IFTA) licensees and interstate truckers (except IFTA licensed) — quarterly or yearly if qualified Due Date: Monthly — 25th day of the month for taxes collected during the preceding month Quarterly — 25th day (or last day if IFTA licensee) of the month succeeding each calendar quarter Remitted by: Suppliers, permissive suppliers, distributors, importers, exporters, blenders, dyed diesel fuel bonded users, interstate truckers and IFTA licensees LEGAL CITATION(S) Texas Tax Code, §§ 162.201, 162.202, 162.204, 162.205, 162.214, 162.215, 162.227 ENACTED 47th Legislature (1941) 8 cents per gallon RATE AND BASE CHANGES 48th Legislature (1943) 6 cents per gallon 54th Legislature (1955) 6.5 cents per gallon 67th Legislature (1981) one-half cent rate reduction for certified transit companies (eff. 1/1/82) 68th Legislature (1984) 10 cents per gallon (eff. 8/1/84) 69th Legislature (1986) 15 cents per gallon (eff. 1/1/87 to 8/31/87) 70th Legislature (1987) 15 cents per gallon (eff. 9/1/87) 72nd Legislature (1991) 20 cents per gallon (eff. 10/1/91) ALLOCATION After deductions for refunds, administration and enforcement: Available School Fund 0002 — 25% of balance State Highway Fund 0006 — 75% of balance Texas Comptroller of Public Accounts – January 2019 94 Sources of Revenue DIESEL FUEL TAX (concluded) Revenue Object 3008 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1 $ 35,616 41,571 46,172 45,125 51,012 55,874 64,937 72,162 78,383 83,416 89,908 91,078 105,100 155,938 151,548 186,672 207,780 221,482 229,979 235,859 303,118 331,707 369,921 393,065 422,225 441,089 491,995 512,804 Percent Change 16.7 11.1 (2.3) 13.0 9.5 16.2 11.1 8.6 6.4 7.8 1.3 15.4 48.4 (2.8) 23.2 11.3 6.6 3.8 2.6 28.5 9.4 11.5 6.3 7.4 4.5 11.5 4.2 Percent of Taxes 1.52 1.61 1.53 1.34 1.30 1.26 1.29 1.34 1.24 1.08 1.04 1.07 1.13 1.45 1.48 1.82 1.68 1.72 1.69 1.58 1.91 1.95 2.04 2.08 2.14 2.08 2.17 2.17 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 561,560 611,355 606,788 610,556 643,894 673,431 735,018 751,645 784,927 705,541 699,331 742,027 780,517 801,212 832,978 860,887 827,967 857,093 925,935 Percent Change Percent of Taxes 9.5 8.9 (0.7) 0.6 5.5 4.6 9.1 2.3 4.4 (10.1) (0.9) 6.1 5.2 2.7 4.0 3.4 (3.8) 3.5 8.0 2.22 2.25 2.31 2.34 2.31 2.26 2.19 2.03 1.90 1.87 1.98 1.91 1.77 1.68 1.63 1.67 1.71 1.73 1.67 * Revenue Object code 3651 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections † No revenue deposited to trust 1 Includes Liquefied Gas tax receipts from fiscal 1972 through 1979 1,000,000 (Amounts in Thousands) 800,000 600,000 400,000 200,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 95 Sources of Revenue DRIVER RECORD INFORMATION FEES Revenue Object 3027 RATE AND BASE State: $6 per request for conviction/accident records; driver record reports are from $2.50 to $2,000 and over, depending on the information requested Local: None Federal: None Major Exemptions: Law enforcement and other government agencies ADMINISTRATION Agency: Texas Department of Public Safety (DPS) and Texas Department of Transportation (TxDOT) No. of Fees Collected: 15,769,756 Payment Cycle: Daily Due Date: Daily Remitted by: TxDOT (accident reports) and DPS (driver record reports); fees for both collected from insurance carriers and other entities LEGAL CITATION(S) Texas Transportation Code, §§ 521.045 - 521.058, 550.065, Code of Criminal Procedure, 45.0511 (c-1) ENACTED 56th Legislature (1959) $0.25 to $1 per request RATE AND BASE CHANGES 61st Legislature (1970) $2 per accident report 62nd Legislature (1971) Increased fees ranging from $1 to $3 per request; discounts for large volume 68th Legislature (1983) Increased accident report fee to $4 69th Legislature (1985) Increased driver record fees 72nd Legislature (1991) Increased driver record fees 73rd Legislature (1993) Added fee to not release address; temporary 15% increase in accident report fees 75th Legislature (1997) Certain fees reduced by $0.50 to $1.50; created an interactive driver records data base 77th Legislature (2001) Increased fee for magnetic tape sales of driver record info to $2,000 and to $75 for weekly updates (eff. 9/1/01); increased officer accident report fee to $6 78th Legislature (2003) Set fee of $20 for certified abstract of complete driving record (eff. 9/1/03); changed allocation of driver record fee to Texas Mobility Fund 0365 (eff. 9/1/05) 79th Legislature (2005) Delayed allocation of driver record fees to Texas Mobility Fund 0365 for one year 81st Legislature (2009) Extended $6 fee to cover accident report information provided by TxDOT in annual reports required by 80th Legislature ALLOCATION General Revenue Fund 0001 — $6 accident report Texas Mobility Fund 0365 — All remaining (i.e., driver record) fees Texas Comptroller of Public Accounts – January 2019 96 Sources of Revenue DRIVER RECORD INFORMATION FEES (concluded) Revenue Object 3027 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 2,724 2,752 3,606 3,707 3,983 4,930 12,800 18,711 21,735 22,051 22,551 24,107 51,646 48,697 48,292 46,430 45,056 43,431 43,393 43,715 Percent Change Percent of Other Revenue 1.0 31.1 2.8 7.5 23.8 159.6 46.2 16.2 1.5 2.3 6.9 114.2 (5.7) (0.8) (3.9) (3.0) (3.6) (0.1) 0.7 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.16 0.13 0.15 0.17 0.16 0.17 0.32 0.54 0.62 0.59 0.56 0.56 0.96 0.70 0.60 0.55 0.50 0.47 0.47 0.42 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 44,785 49,120 49,920 50,993 51,524 53,901 57,524 54,026 62,087 58,035 56,322 57,399 58,383 61,321 63,947 66,962 70,254 69,753 69,065 Percent Change 2.4 9.7 1.6 2.2 1.0 4.6 6.7 (6.1) 14.9 (6.5) (3.0) 1.9 1.7 5.0 4.3 4.7 4.9 (0.7) (1.0) Percent of Other Revenue 0.46 0.46 0.46 0.45 0.42 0.41 0.41 0.34 0.32 0.37 0.37 0.34 0.33 0.33 0.32 0.32 0.30 0.30 0.28 † No revenue deposited to trust 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Public Safety Texas Comptroller of Public Accounts – January 2019 97 Sources of Revenue DRIVER’S LICENSE FEES Revenue Object 3025 RATE AND BASE State: $24 for 6-year operator license, $32 with motorcycle; $60 for 5-year commercial license (CDL); $10 duplicate license; $120 non-resident CDL w/various expiration dates; $20 temporary non-resident CDL; $10 occupational license valid 1 year; operator and CDL issued to persons 85+ expire in 2 years; personal identification certificate $15 or $5 for person 60+ Local: None Federal: None Major Exemptions: Disabled veterans ADMINISTRATION Agency: Texas Department of Public Safety (DPS) No. Fees Collected Annually: 5,786,727 Payment Cycle: Six-year renewal (standard operator’s license) Due Date: Renewals — on or before birthday of vehicle operator Remitted By: Vehicle operators LEGAL CITATION(S) Texas Transportation Code, Title 7, Subtitle B, Chapters 521 and 522 ENACTED 44th Legislature (1935) RATE AND BASE CHANGES Various rate increases between 1935 and 1970 62nd Legislature (1971) Increased operator license to $7, commercial license to $10, chauffeur‘s license to $13 and set occupational license at $3 68th Legislature (1983) Increased operator license to $10, motorcycle to $10 and occupational to $10 69th Legislature (1985) Increased operator and commercial licenses to $16 71st Legislature (1989) Increased commercial license to $40, increased motorcycle to $16 75th Legislature (1997) Increased operator license to $24, motorcycle to $32 and commercial to $60 (license term extension—to 6 years—and corresponding fee increase to be phased in by DPS) 76th Legislature (1999) Increased certain reinstatement fees to $100 from $50 78th Legislature (2003) Changed allocation of driver’s license fees to Texas Mobility Fund 0365 (eff. 9/1/05) 79th Legislature (2005) Delayed allocation of driver’s license fees to Texas Mobility Fund 0365 for 2 years 80th Legislature (2007) Special renewal periods for age 85+, for persons age 79+ no applications/renewals by mail/electronic means; added $1 voluntary fee on issuance/renewal to fund blindness education/screening/treatment program, donor education, awareness and registry program or Texas Organ, Tissue and Eye Donor Council 81st Legislature (2009) Increased reinstatement fee $50 to $100 for motor vehicle offenses; established fee of $24 for license/personal ID certificate issued to non-citizen for one year; prohibited issuance of a license to persons under 25 unless they present a certificate of completion from an approved driver education course 82nd Legislature (2011) Added personal ID certificate to documents exempt from fee for disabled veterans ALLOCATION Each motorcycle license: Motorcycle Education Fund 0501 — $5 Texas Mobility Fund 0365 — remaining balance General Revenue Fund 0001 — all voluntary fees All other driver license fees: Texas Mobility Fund 0365 — 100% General Revenue Fund 0001 — all voluntary fees Texas Comptroller of Public Accounts – January 2019 98 Sources of Revenue DRIVER’S LICENSE FEES (concluded) Revenue Object 3025 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 21,016 22,841 22,532 23,479 24,860 26,807 21,327 22,168 22,846 24,542 26,733 25,724 32,816 36,197 51,157 48,547 53,542 59,190 55,771 59,969 71,259 69,743 69,217 69,796 82,894 83,896 87,005 98,548 Percent Change Percent of Other Revenue 8.7 (1.4) 4.2 5.9 7.8 (20.4) 3.9 3.1 7.4 8.9 (3.8) 27.6 10.3 41.3 (5.1) 10.3 10.5 (5.8) 7.5 18.8 (2.1) (0.8) 0.8 18.8 1.2 3.7 13.3 4.09 4.03 3.26 3.01 2.75 2.47 1.73 1.68 1.34 1.15 1.14 1.15 1.31 1.22 1.26 1.39 1.52 1.60 1.37 1.39 1.32 1.01 0.86 0.83 0.91 0.90 0.94 0.94 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 117,896 123,557 114,973 95,718 96,183 112,455 116,109 121,384 115,927 103,181 100,639 127,803 130,263 132,743 139,114 137,020 137,371 142,513 145,031 Percent Change Percent of Other Revenue 19.6 4.8 (6.9) (16.7) 0.5 16.9 3.2 4.5 (4.5) (11.0) (2.5) 27.0 1.9 1.9 4.8 (1.5) 0.3 3.7 1.8 1.21 1.17 1.07 0.85 0.79 0.85 0.82 0.77 0.60 0.66 0.67 0.75 0.74 0.71 0.71 0.65 0.59 0.61 0.58 No revenue deposited to trust 150,000 (Amounts in Thousands) 120,000 90,000 60,000 30,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Public Safety; U.S. Department of Transportation Texas Comptroller of Public Accounts – January 2019 99 Sources of Revenue DRIVER’S LICENSE POINT SURCHARGES Revenue Object 3024 RATE AND BASE State: $100 for the first 6 moving violation points and $25 for each additional point; $1,000 to $2,000 per year surcharge on a DWI conviction; $250 for invalid license; $100 for driving without a license Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Department of Public Safety (DPS) No. of Fees Collected: Payment Cycle: N/A Due Date: Within 30 days of notification by DPS Remitted by: DPS; collected from offenders LEGAL CITATION(S) Transportation Code §§ 708.051, 708.052, 708.053, 708.054, 708.102, 708.103, 708.104 Health and Safety Code § 780.002 ENACTED HB 3588, 78th Leg., R.S. (2003) and HB 2, 78th Leg., 3rd C.S. (2003) RATE AND BASE CHANGES ALLOCATION General Revenue Fund 0001 — Beginning in FY 2006, 49.5% of surcharges plus an additional 1% of surcharges that may only be appropriated to DPS for administration GR Account – Designated Trauma Facility and EMS 5111 — Beginning FY 2006, 49.5% of surcharges Texas Mobility Fund 0365 — If the combined deposit to General Revenue Fund 0001 (the 49.5% portion) of driver’s license point surcharges (Revenue Object 3024) and state traffic fines (Revenue Object 3710; Transportation Code 542.4031(g)(1)) exceeds $250 million in a fiscal year, the excess is deposited to the Texas Mobility Fund 0365 Texas Comptroller of Public Accounts – January 2019 100 Sources of Revenue DRIVER’S LICENSE POINT SURCHARGES (concluded) Revenue Object 3024 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Percent Change - Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 0 0 0 0 0 36,783 98,294 158,511 165,736 169,637 162,325 170,431 173,369 137,763 144,509 151,236 147,830 143,825 143,460 Percent Change Percent of Other Revenue 167.2 61.3 4.6 2.4 (4.3) 5.0 1.7 (20.5) 4.9 4.7 (2.3) (2.7) (0.3) 0.00 0.00 0.00 0.00 0.00 0.28 0.69 1.00 0.85 1.09 1.07 1.00 0.98 0.74 0.73 0.72 0.63 0.62 0.57 † No revenue deposited to trust 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Public Safety Texas Comptroller of Public Accounts – January 2019 101 Sources of Revenue FEES - ADMINISTRATIVE SERVICES Revenue Objects 3727 RATE AND BASE State: State agencies may collect fees to cover certain administrative costs. Fees vary depending on service and/or agency Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Various No. of Fees Collected: N/A Payment Cycle: Due Date: Various or as determined by the agency, depending on the fee Remitted By: Licensees, individuals, businesses, government agencies and other entities LEGAL CITATION(S) ENACTED Various enactment dates depending on the fee RATE AND BASE CHANGES Various, depending on the fee ALLOCATION Various, depending on the fee Texas Comptroller of Public Accounts – January 2019 102 Sources of Revenue FEES - ADMINISTRATIVE SERVICES (concluded) Revenue Objects 3727 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds Revenue Excludes Trust Percent Change Percent of Other Revenue 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 31 12 13 16 10 13 11 19 27 19 18 34 31 44 69 246 36 214 168 219 584 968 4,560 2,243 3,459 6,515 7,509 7,763 $ 31 12 13 16 10 13 11 19 27 19 18 34 31 44 69 246 36 214 168 219 584 968 4,560 2,240 2,912 3,842 4,057 5,272 (61.9) 9.0 28.2 (37.2) 26.4 (12.6) 67.3 39.9 (29.3) (7.3) 92.5 (8.1) 42.4 56.2 256.7 (85.2) 489.2 (21.4) 29.8 166.9 65.9 371.1 (50.9) 30.0 31.9 5.6 30.0 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.01 0.00 0.01 0.01 0.01 0.06 0.03 0.03 0.04 0.04 0.05 1 Year Revenue All Funds Revenue Excludes Trust Percent Change Percent of Other Revenue 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 8,092 14,356 11,545 24,174 28,085 28,526 35,582 40,142 52,573 144,318 68,217 73,510 73,860 67,444 80,381 96,523 122,246 175,037 184,329 $ 5,564 11,626 8,695 9,351 13,636 15,187 21,938 26,677 38,460 37,170 52,470 57,178 56,888 64,695 78,190 94,639 120,636 172,679 181,671 5.5 108.9 (25.2) 7.5 45.8 11.4 44.5 21.6 44.2 (3.4) 41.2 9.0 (0.5) 13.7 20.9 21.0 27.5 43.1 5.2 0.06 0.11 0.08 0.08 0.11 0.12 0.16 0.17 0.20 0.24 0.35 0.34 0.32 0.35 0.40 0.45 0.52 0.74 0.73 Fiscal year 2009 Revenue All Funds included $94,369 belonging to another source 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 103 Sources of Revenue FRANCHISE TAX Revenue Objects 3130 and 3131 RATE AND BASE State: 0.75 percent of a firm’s Texas-apportioned “margin” defined as total revenue less the greater of: (1) the cost of goods sold, (2) total compensation, (3) 30% of total revenue, or (4) $1 million; a rate of 0.375% applies to businesses in retail and wholesale trade; a rate of 0.331% may be used by entities eligible for the EZ computation. Local: None Federal: None; a federal corporate income tax, however, is levied at 21% of net income Major Exemptions: Insurance companies, open-end investment companies, certain non-profit businesses, passive entities, business loss carry forward (credit), certain research and development activities (credit), small businesses owing less than $1,000 or with total revenue less than $1 million (adjusted for inflation) ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxable Entities: 1,801,398* Payment Cycle: Annually Due Date: May 15th of each year, with available extensions until November 15th Remitted By: Corporations and limited liability companies; partnerships, trusts and other business forms * The number of taxable entities with responsibility to report tax, including those who were members of a combined group, was 1,801,398 in 2018. This number excludes nontaxable entities such as sole proprietorships, some general partnerships, passive entities, and companies receiving a specific exemption under the Franchise tax statute. The number of taxable entities (including combined groups) submitting a tax report and remitting tax in 2018 was 129,813. In addition, 204,143 taxable entities were reported as affiliates (members of a combined group)—associated both with tax paid and no tax due filings. LEGAL CITATION(S) Texas Tax Code, Chapter 171 ENACTED 30th Legislature (1907) $0.50 per $1,000 of taxable capital RATE AND BASE CHANGES There were seven rate increases and two rate reduction between 1938 and 1971 62nd Legislature (1971) Raised surtax to $1.75 (effective rate $4.50); surtax dropped by $0.25 to $1.50 (effective rate $4.25) from 1972 to 1974 64th Legislature (1975) $4.25 basic rate — $55 minimum tax; debt became exempt; no surtax 68th Legislature (1984) $5.25 basic rate — $68 minimum tax; banks became taxable (eff. 5/1/85) 70th Legislature (1987) $5.25 basic rate plus $1.45 surtax — $150 minimum tax effective for 1988 and 1989 reports; rate reverted to $5.25 with no surtax — $68 minimum tax for reports due in 1990 72nd Legislature (1991) $2.50 per $1,000 of taxable capital and amount, if any, by which a tax of 4.5% on earned surplus exceeds the tax on capital 79th Legislature, 3rd Called Session (2006) One percent of a firm’s Texas-apportioned “margin,” defined as total revenue less the greater of the cost of goods sold, total compensation, or 30% of total revenue; a half-rate of 0.5% applies to businesses in retail and wholesale trade; taxable entities expanded to include most with limited liability protection (eff. 01/01/08) 80th Legislature (2007) Variety of amendments to the newly-adopted tax on“margin;” including alternative method of computation (“EZ”) at a rate of 0.575% 82nd Legislature, 1st Called Session (2013) Tax Refund for Economic Development, Reinvestment Zone/Abatement Agreement (Revenue Object 3804) was repealed 83rd Legislature (2013) Temporary tax rates of 0.975% in 2014 and 0.95% in 2015 for most taxpayers; 0.4875% in 2014 and 0.475% in 2015 for businesses in retail or wholesale trades; a fourth margin calculation of Total Revenue minus $1 million is available (eff. 1/1/14) 84th Legislature (2015) Tax rates permanently reduced to 0.75% for most taxpayers and 0.375% for businesses in retail or wholesale trades (eff. 1/1/16); EZ alternative computation rate reduced to 0.331% and revenue threshold increased to $20 million ALLOCATION General Revenue Fund 0001 — The revenue Comptroller estimates would have been generated if the law in effect on August 31, 2007 had continued in effect for that fiscal year Property Tax Relief Fund 0304 — The amount, if any, by which revenue generated under the law as applicable during the given fiscal year exceeds revenue Comptroller estimates would have been generated if the law in effect on August 31, 2007 had continued in effect for that fiscal year Texas Comptroller of Public Accounts – January 2019 104 Sources of Revenue FRANCHISE TAX (concluded) Revenue Objects 3130 and 3131 NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1 1997 1998 1999 $ 128,781 133,813 154,480 166,635 213,582 236,612 264,879 293,810 340,779 417,433 481,219 555,312 606,793 856,871 902,505 875,129 933,628 680,760 587,556 598,342 1,090,050 1,192,825 1,260,749 1,423,441 1,639,015 1,796,605 1,937,752 2,077,633 Percent Change Percent of Taxes 3.9 15.4 7.9 28.2 10.8 11.9 10.9 16.0 22.5 15.3 15.4 9.3 41.2 5.3 (3.0) 6.7 (27.1) (13.7) 1.8 82.2 9.4 5.7 12.9 15.1 9.6 7.9 7.2 5.49 5.18 5.11 4.94 5.46 5.35 5.26 5.45 5.37 5.39 5.56 6.53 6.52 7.99 8.82 8.52 7.55 5.27 4.31 4.01 6.88 7.01 6.96 7.55 8.29 8.48 8.56 8.80 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * 1 † Total Revenue † $ 2,065,276 1,960,365 1,935,709 1,716,600 1,835,014 2,170,081 2,605,447 3,144,059 4,451,326 4,250,332 3,856,866 3,932,114 4,564,731 4,798,699 4,732,262 4,656,286 3,881,176 3,242,219 3,685,940 Percent Change Percent of Taxes (0.6) (5.1) (1.3) (11.3) 6.9 18.3 20.1 20.7 41.6 (4.5) (9.3) 2.0 16.1 5.1 (1.4) (1.6) (16.6) (16.5) 13.7 8.17 7.20 7.37 6.57 6.57 7.27 7.77 8.51 10.76 11.24 10.90 10.12 10.36 10.04 9.28 9.01 8.01 6.53 6.63 Revenue object code 3653 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections. Effective fiscal 1996, revenue object code 3804 (relating to tax refunds for economic development, reinvestment zone/abatement agreements) is used with this revenue source in calculating net collections. Repealed for refunds claimed after October 1, 2011. No revenue deposited to trust 5,000,000 (Amounts in Thousands) 4,000,000 3,000,000 2,000,000 1,000,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 105 Sources of Revenue GAME, FISH AND EQUIPMENT FEES Revenue Object 3434 RATE AND BASE State: Various rates based on type and term of fee, ranging from $7 for certain hunting licenses to $1,800 for a lifetime combination hunting and fishing license Local: None Federal: None Major Exemptions: Individuals aged 16 and under (fishing only), born before Jan. 1, 1931 (fishing only), disabled veterans and active duty military personnel (super combo only) ADMINISTRATION Agency: Texas Parks and Wildlife Department (TPWD) No. of Licenses: In excess of 2.4 million hunting, fishing and combo licenses issued annually* Payment Cycle: Set by TPWD Due Date: Set by TPWD Remitted by: Agents (retailers) authorized by TPWD, certain law enforcement agencies and TPWD *Source: TPWD LEGAL CITATION(S) Texas Parks and Wildlife Code, Chapters 42, 43, 46, 49, 50, and 71 ENACTED 39th Legislature (1925) $2.15 for annual resident hunting license; $2.15 for annual resident fishing license RATE AND BASE CHANGES 62nd Legislature (1971) $3.25 annual resident hunting license 63rd Legislature (1973) $5.25 annual resident hunting license; $4.25 annual resident fishing license; $8.75 combination resident hunting and fishing license 65th Legislature (1977) $4.50 annual resident fishing license 67th Legislature (1981) $5 annual resident fishing license 68th Legislature (1983) $8 annual resident hunting license; $4.25 annual resident fishing license; $12 combination resident hunting and fishing license NOTE: Since 1985, Texas Parks and Wildlife Commission increased fees several times. Current annual resident license rates are $25 for hunting, $40 all water fishing and $60 combination hunting/all water fishing. Lifetime resident license rates; for hunting or all water fishing are $1,000, and $1,800 for a combination license. Some minimum fees are contained in statute, however, TPWD is authorized to set fees above the minimum. ALLOCATION GR – Account Game, Fish and Water Safety 0009 — All non-commercial game and fish fees (other than lifetime licenses) GR – Account Lifetime License Endowment 0544 — Lifetime licenses Texas Comptroller of Public Accounts – January 2019 106 Sources of Revenue GAME, FISH AND EQUIPMENT FEES (concluded) Revenue Object 3434 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 5,846 6,129 11,012 11,175 10,142 11,888 11,491 12,370 12,616 13,289 15,351 16,184 21,472 20,190 27,333 28,943 29,589 30,609 29,413 29,927 40,260 42,615 42,943 45,690 44,442 58,676 56,412 57,784 Percent Change 4.9 79.7 1.5 (9.2) 17.2 (3.3) 7.7 2.0 5.3 15.5 5.4 32.7 (6.0) 35.4 5.9 2.2 3.4 (3.9) 1.7 34.5 5.9 0.8 6.4 (2.7) 32.0 (3.9) 2.4 Percent of Other Revenue 1.14 1.08 1.60 1.43 1.12 1.10 0.93 0.94 0.74 0.62 0.65 0.73 0.86 0.68 0.67 0.83 0.84 0.83 0.72 0.70 0.75 0.61 0.53 0.54 0.49 0.63 0.61 0.55 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 59,013 59,930 59,254 59,808 73,436 79,437 82,691 84,485 86,866 91,261 91,338 91,071 93,994 93,523 96,232 98,926 102,269 106,234 103,173 Percent Change 2.1 1.6 (1.1) 0.9 22.8 8.2 4.1 2.2 2.8 5.1 0.1 (0.3) 3.2 (0.5) 2.9 2.8 3.4 3.9 (2.9) Percent of Other Revenue 0.60 0.57 0.55 0.53 0.60 0.60 0.58 0.53 0.45 0.58 0.60 0.54 0.53 0.50 0.49 0.47 0.44 0.46 0.41 † No revenue deposited to trust 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Parks and Wildlife Department Texas Comptroller of Public Accounts – January 2019 107 Sources of Revenue GAS, ELECTRIC & WATER UTILITY TAX Revenue Object 3233 * RATE AND BASE State: Cities with population of over 1,000 through 2,499 — 0.581% of gross receipts; Cities with population of 2,500 through 9,999 — 1.070% of gross receipts; Cities with population of over 9,999 — 1.997% of gross receipts Local None Federal None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 135 Payment Cycle: Quarterly Due Date: Last day of April, July, October and January paid quarterly based on previous quarter’s gross receipts Remitted By: Utility companies LEGAL CITATION(S) Texas Tax Code, § 182.022 (the “Utility Company” tax) ENACTED 30th Legislature (1907) 0.0%, 0.5% and 1.0% for cities with above-listed populations RATE AND BASE CHANGES 44th Legislature (1936) 0.0%, 0.7% and 1.375% for cities with above-listed populations 47th Legislature (1941) 0.44%, 0.81% and 1.5125% for cities with above-listed populations 52nd Legislature (1951) 0.484%, 0.891% and 1.66375% for cities with above-listed populations 56th Legislature (1959) 0.581%, 1.070% and 1.997% for cities with above-listed populations ALLOCATION General Revenue Fund 0001 — 75% GR Account - Foundation School 0193 — 25% Texas Comptroller of Public Accounts – January 2019 108 Sources of Revenue GAS, ELECTRIC & WATER UTILITY TAX (concluded) Revenue Object 3233 * NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1 1993 1 1994 1995 1996 1 1997 1 1998 1999 Total Revenue † $ 22,244 25,660 27,804 35,487 45,315 58,484 67,717 76,590 82,913 110,029 133,027 156,017 163,217 167,310 154,001 150,792 153,626 159,296 165,256 183,106 195,737 181,993 206,437 201,538 212,409 202,037 219,806 220,389 Percent Change 15.4 8.4 27.6 27.7 29.1 15.8 13.1 8.3 32.7 20.9 17.3 4.6 2.5 (8.0) (2.1) 1.9 3.7 3.7 10.8 6.9 (7.0) 13.4 (2.4) 5.4 (4.9) 8.8 0.3 Percent of Taxes 0.95 0.99 0.92 1.05 1.16 1.32 1.35 1.42 1.31 1.42 1.54 1.84 1.75 1.56 1.51 1.47 1.24 1.23 1.21 1.23 1.24 1.07 1.14 1.07 1.07 0.95 0.97 0.93 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † 1 Total Revenue † $ 222,284 284,613 262,474 281,759 308,667 323,566 414,806 438,027 433,733 438,916 404,175 392,009 378,926 360,040 408,040 401,734 354,409 363,100 371,205 Percent Change Percent of Taxes 0.9 28.0 (7.8) 7.3 9.5 4.8 28.2 5.6 (1.0) 1.2 (7.9) (3.0) (3.3) (5.0) 13.3 (1.5) (11.8) 2.5 2.2 0.88 1.05 1.00 1.08 1.11 1.08 1.24 1.19 1.05 1.16 1.14 1.01 0.86 0.75 0.80 0.78 0.73 0.73 0.67 Revenue object code 3669 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust These figures reflect adjustments for deposit and posting errors (see Public Utility Gross Receipts Assessment) 500,000 (Amounts in Thousands) 40,0000 30,0000 20,0000 10,0000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 109 Sources of Revenue GAS UTILITY PIPELINE TAX Revenue Object 3234 RATE AND BASE State: 0.5% of gross income (gross receipts less cost of natural gas sold) of natural gas utilities Local: None Federal: Federal Energy Regulatory Commission applies an annual charge on interstate sales Major Exemptions: None ADMINISTRATION Agency: Texas Railroad Commission Number of Taxpayers: 195 Payment Cycle: Quarterly Due Date: 20th day of the second month for the succeeding calendar quarter Remitted By: Natural gas utility companies LEGAL CITATION(S) Texas Utilities Code, §§ 122.051, 122.052 ENACTED 36th Legislature (1920) 0.25% of gross receipts RATE AND BASE CHANGES 71st Legislature (1989) 0.5% of gross income (eff. 10/1/89) ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 110 Sources of Revenue GAS UTILITY PIPELINE TAX (concluded) Revenue Object 3234 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1 1992 1 1993 1994 1995 1996 1997 1 1998 1999 Total Revenue † $ 1,752 2,637 4,374 7,315 11,420 13,940 14,651 15,767 20,368 27,994 34,670 32,098 20,247 17,051 15,873 10,418 6,389 3,911 5,469 35,713 5,660 4,917 5,276 4,795 4,869 9,562 5,623 3,986 Percent Change Percent of Taxes 50.5 65.9 67.3 56.1 22.1 5.1 7.6 29.2 37.4 23.9 (7.4) (36.9) (15.8) (6.9) (34.4) (38.7) (38.8) 39.8 553.0 (84.2) (13.1) 7.3 (9.1) 1.6 96.4 (41.2) (29.1) 0.07 0.10 0.14 0.22 0.29 0.32 0.29 0.29 0.32 0.36 0.40 0.38 0.22 0.16 0.16 0.10 0.05 0.03 0.04 0.24 0.04 0.03 0.03 0.03 0.02 0.05 0.02 0.02 Year 2000 2001 2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † 1 2 Total Revenue † $ 3,907 6,193 4,787 5,799 6,021 7,210 8,421 8,553 12,586 15,943 14,886 15,606 18,112 19,333 21,764 23,777 24,137 24,791 25,239 Percent Change Percent of Taxes (2.0) 58.5 (22.7) 21.1 3.8 19.8 16.8 1.6 47.2 26.7 (6.6) 4.8 16.1 6.7 12.6 9.3 1.5 2.7 1.8 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.02 0.03 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05 No revenue deposited to trust $30.7 million, $0.6 million, and $3.9 million were moved from protest (Fund 0900) to the Gas Utility Pipeline tax An audit payment of $1.1 million was deposited in fiscal 2001 40,000 35,000 (Amounts in Thousands) 30,000 25,000 20,000 15,000 10,000 5,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Railroad Commission Texas Comptroller of Public Accounts – January 2019 111 Sources of Revenue GASOLINE TAX Revenue Object 3007 * RATE AND BASE State: 20 cents per gallon (eligible transit companies qualify for a refund of 1 cent per gallon) Local: None Federal: $0.184 per gallon Major Exemptions: Federal government; volunteer fire departments; Texas public school districts; commercial transportation companies and/or certain metropolitan rapid transit authorities providing public school transportation services to a Texas public school district; various off-road uses ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 870 (not including interstate truckers) Payment Cycle: Suppliers, permissive suppliers, distributors, importers, exporters, and blenders — monthly; International Fuel Tax Agreement (IFTA) licensees — quarterly; Interstate truckers (except IFTA licensed) — quarterly, or yearly if qualified Due Date: Monthly — 25th day of the month for taxes collected during the preceding month Quarterly — 25th (or last for IFTA licensees) day of the month succeeding each calendar quarter Remitted By: Suppliers, permissive suppliers, distributors, importers, exporters, blenders, interstate truckers, and IFTA licensees LEGAL CITATION(S) Texas Tax Code, §§ 162.102, 162.104, 162.105, 162.113, 162.114, 162.125 ENACTED 38th Legislature (1923) 1 cent per gallon RATE AND BASE CHANGES 47th Legislature (1941) 4 cents per gallon 54th Legislature (1955) 5 cents per gallon 67th Legislature (1981) 1 cent rate reduction for certified transit companies (eff. 1/1/82) 68th Legislature (1984) 10 cents per gallon (eff. 8/1/84) 69th Legislature (1986) 15 cents per gallon (eff. 1/1/87 to 8/31/87) 70th Legislature (1987) 15 cents per gallon (eff. 9/1/87) 72nd Legislature (1991) 20 cents per gallon (eff. 10/1/91) ALLOCATION After deductions for refunds, administration and enforcement: Available School Fund 0002 — 25% of balance State Highway Fund 0006 — 75% of balance less $7.3 million of which is transferred to the County and Road District Highway Fund 0057 Texas Comptroller of Public Accounts – January 2019 112 Sources of Revenue GASOLINE TAX (concluded) Revenue Object 3007 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 320,148 343,802 343,776 350,096 376,272 388,224 412,751 417,334 399,492 393,385 402,718 395,641 422,868 824,783 854,840 1,082,004 1,261,049 1,274,710 1,282,196 1,271,422 1,647,796 1,750,983 1,797,653 1,839,661 1,896,146 1,939,426 2,011,653 2,077,536 Percent Change 7.4 (0.0) 1.8 7.5 3.2 6.3 1.1 (4.3) (1.5) 2.4 (1.8) 6.9 95.0 3.6 26.6 16.5 1.1 0.6 (0.8) 29.6 6.3 2.7 2.3 3.1 2.3 3.7 3.3 Percent of Taxes 13.66 13.31 11.36 10.37 9.61 8.78 8.20 7.74 6.30 5.08 4.66 4.66 4.54 7.69 8.35 10.54 10.20 9.88 9.41 8.52 10.40 10.29 9.93 9.75 9.59 9.15 8.89 8.80 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † Total Revenue † $ 2,124,462 2,152,303 2,224,961 2,226,649 2,272,227 2,259,626 2,257,053 2,300,924 2,315,486 2,326,135 2,341,609 2,361,141 2,387,692 2,418,088 2,480,229 2,580,164 2,681,139 2,721,270 2,743,373 Percent Change 2.3 1.3 3.4 0.1 2.0 (0.6) (0.1) 1.9 0.6 0.5 0.7 0.8 1.1 1.3 2.6 4.0 3.9 1.5 0.8 Percent of Taxes 8.40 7.90 8.47 8.52 8.14 7.57 6.73 6.23 5.60 6.15 6.62 6.08 5.42 5.06 4.86 4.99 5.53 5.48 4.94 Revenue object code 3655 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust 3,000,000 (Amounts in Thousands) 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 113 Sources of Revenue GENERAL BUSINESS FILING FEES Revenue Object 3133 RATE AND BASE State: Various business filing fees imposed on domestic and foreign corporations, partnerships, professional associations and other entities Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Secretary of State. Additionally, for certain fees: Governor’s Office, Bond Review Board, Texas Commission on Environmental Quality and Texas Department of Motor Vehicles No. of Fees Collected: N/A Payment Cycle: Various Due Date: At time of filing or when service is performed Remitted By: Business entities LEGAL CITATION(S) Texas Agriculture Code, §§ 51.023, 55.009, 128.016(b), 128.038, 128.039, 188.016 Texas Business and Commerce Code, §§ 9.525, 51.008, 71.155, 261.008 Texas Business Organization Code, §§ 4.151, 4.161 Texas Code of Criminal Procedures, § 42.22(7a) Texas Government Code, §§ 103.022, 1372.006, 2310.110(e), Ch. 489 Texas Health & Safety Code, § 361.976 Texas Local Government Code, §§ 501.306, 501.313, 501.352, 501.404 Texas Property Code, §§ 14.004, 14.005 Texas Utility Code, §§ 161.055, 161.061, 161.151, 161.202, 161.251, 162.061, 162.080, 162.154, 162.202, 162.204, 162.252, 162.254, 162.301 ENACTED 14th Legislature (1874) Domestic business 36th Legislature (1919) Foreign business Numerous fees subsequently enacted RATE AND BASE CHANGES The history of fee rate and base changes is too extensive to report in the space allotted; see Table 2 and/or chapter entitled, “Legislative Changes and Other Sources of Growth” for major tax and fee legislation ALLOCATION General Revenue Fund 0001 — All other fees State Highway Fund 0006 — Motor vehicle restitution liens collected by the Texas Department of Motor Vehicles GR Account - Economic Development Bank 5106 — Fees associated with the Texas Economic Development Bank Texas Comptroller of Public Accounts – January 2019 114 Sources of Revenue GENERAL BUSINESS FILING FEES (concluded) Revenue Object 3133 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 4,266 6,489 5,536 4,907 6,750 7,941 8,646 10,488 11,836 13,950 15,001 16,710 23,333 21,944 23,246 18,809 20,615 20,562 20,850 20,868 26,746 29,069 32,108 33,874 37,028 39,572 42,274 43,998 Revenue Excludes Trust Percent Change $ 4,266 6,489 5,536 4,907 6,750 7,941 8,646 10,488 11,836 13,950 15,001 16,710 23,333 21,944 23,246 18,809 20,615 20,562 20,850 20,868 26,746 29,069 32,108 33,875 37,028 39,572 42,274 43,998 52.1 (14.7) (11.3) 37.5 17.6 8.9 21.3 12.9 17.9 7.5 11.4 39.6 (6.0) 5.9 (19.1) 9.6 (0.3) 1.4 0.1 28.2 8.7 10.5 5.5 9.3 6.9 6.8 4.1 Percent of Other Revenue 0.83 1.14 0.80 0.63 0.75 0.73 0.70 0.80 0.69 0.65 0.64 0.75 0.93 0.74 0.57 0.54 0.58 0.55 0.51 0.48 0.50 0.42 0.40 0.40 0.41 0.42 0.46 0.42 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 48,555 46,908 49,924 52,462 58,905 61,520 73,008 72,932 67,399 59,227 61,716 66,099 70,317 75,004 79,188 82,895 87,994 92,511 100,778 Revenue Excludes Trust Percent Change $ 48,555 46,908 49,924 52,462 58,905 61,520 73,008 72,932 67,399 59,227 61,717 66,099 70,317 75,004 79,188 82,895 87,994 92,511 100,778 10.4 (3.4) 6.4 5.1 12.3 4.4 18.5 (0.1) (7.6) (12.1) 4.2 7.1 6.4 6.7 5.6 4.7 6.2 5.1 8.9 Percent of Other Revenue 0.50 0.44 0.46 0.47 0.48 0.47 0.52 0.46 0.35 0.38 0.41 0.39 0.40 0.40 0.40 0.39 0.38 0.40 0.40 100,000 (Amounts in Thousands) 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts; Secretary of State; Governor’s Office Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 115 Sources of Revenue HEALTH CARE FACILITIES FEES Revenue Object 3557 RATE AND BASE State: Fees for the operation of health care facilities vary depending on type of facility, including day activity and health services facilities ($75 license fee); chemical dependency; nursing home ($375 plus $15 per bed); hospital; trauma; environmental testing; continuing care; and others Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Department of State Health Services, Department of Insurance, Texas Commission on Environmental Quality, Health and Human Services Commission No. of Fees Collected: N/A Payment Cycle: N/A Due Date: Depending on the fee either annually or as determined by the agency Remitted by: Health care facilities. LEGAL CITATION(S) Texas Government Code § 487.603, 531.078 Texas Health and Safety Code §§ 142.010, 142.014, 142.0104, 241.025, 241.104, 242.010, 242.034, 242.0385, 242.040, 242.047, 242.097, 242.039, 242.016, 242.064, 242.309, 242.314, 242.315, 243.007, 243.014, 244.007, 244.014, 245.007, 245.015, 245.017, 246.023, 246.027, 246.058, 251.013, 252.034, 252.0375, 252.202, 254.053, 401.427, 464.007, 773.116 Texas Human Resources Code §§ 103.007, 103.0075, 103.012 Texas Attorney General Opinion No. M-1193 (1972) Texas Water Code § 5.803 ENACTED Various dates depending on the fee RATE AND BASE CHANGES 73rd Legislature (1993) Increased hospital fee from $3 to $10 per bed 80th Legislature (2007) Increased adult care fee from $25 to $50 and community care facilities fees from between $300 and $1,000 to $600 and $2,000 83rd Legislature (2013) Increased nursing home license fees from $250 to $375 and the fee per bed from $10 to $15 84th Legislature (2015) Abolishd Department of Aging and Disability Services; functions transferred to the Health and Human Services Commision 85th Legislature (2017) Increased day activity and health services license fee from $50 to $75 ALLOCATION General Revenue Fund 0001 — All other fees Freestanding Emergency Medical Care Facility Licensing Fund 0373 — All fees related to the licensing of freestanding emergency medical care facilities Nursing and Convalescent Home Trust Fund 0992 — Fee is $1 for each licensed unit of capacity or bed space in the home or in amount needed to maintain $10,000,000 in fund, an annual fee for emergency assistance money GR – Account Hospital Licensing 0129 — License fees for the “Texas Hospital Licensing Law” GR – Account Home Health Services 5018 — Fees related to licensing home and community support service agencies GR – Account Certification of Mammography Systems 5021 — all fees related to certification of a mammography system GR – Account Environmental Testing Laboratory Accreditation 5065 — All fees related to the accreditation of environmental testing laboratories GR – Account Quality Assurance 5080 — Health care facilities quality assurance fee GR – Account Bureau of Emergency Management 0512 — License fees associated with EMS Texas Comptroller of Public Accounts – January 2019 116 Sources of Revenue HEALTH CARE FACILITIES FEES (concluded) Revenue Object 3557 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 49 231 198 75 234 69 290 701 1,359 1,525 1,825 1,873 2,551 1,520 2,065 1,892 2,256 2,099 2,622 2,299 2,644 2,851 4,686 4,300 6,427 6,281 5,599 6,163 Revenue Excludes Trust Percent Change $ 49 231 198 75 234 69 290 701 1,359 1,525 1,825 1,873 2,551 1,520 2,065 1,892 2,256 2,099 2,622 2,299 2,644 2,851 4,686 4,300 6,427 6,281 5,599 6,163 374.0 (14.3) (61.9) 211.4 (70.6) 321.2 142.0 93.8 12.2 19.7 2.6 36.2 (40.4) 35.9 (8.4) 19.3 (7.0) 24.9 (12.3) 15.0 7.8 64.4 (8.2) 49.5 (2.3) (10.8) 10.1 Percent of Other Revenue 0.01 0.04 0.03 0.01 0.03 0.01 0.02 0.05 0.08 0.07 0.08 0.08 0.10 0.05 0.05 0.05 0.06 0.06 0.06 0.05 0.05 0.04 0.06 0.05 0.07 0.07 0.06 0.06 1 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1 2015 2016 2017 2018 $ 5,758 6,489 25,227 54,178 64,255 63,875 67,567 70,810 72,538 70,242 77,471 76,642 71,150 85,657 66,294 82,948 84,085 80,060 79,155 Revenue Excludes Trust Percent Change $ 5,758 6,489 25,227 54,178 64,255 63,951 65,023 70,396 72,466 70,167 77,438 76,642 71,150 85,650 66,243 82,948 84,085 80,060 79,155 (6.6) 12.7 288.8 114.8 18.6 (0.5) 1.7 8.3 2.9 (3.2) 10.4 (1.0) (7.2) 20.4 (22.7) 25.2 1.4 (4.8) (1.1) Percent of Other Revenue 0.06 0.06 0.23 0.48 0.53 0.49 0.46 0.44 0.37 0.45 0.51 0.45 0.40 0.46 0.34 0.39 0.36 0.35 0.32 Freestanding Emergency Medical Care Facilities increased renewals from one to two years. 100,000 (Amounts in Thousands) 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 117 Sources of Revenue HEALTH RELATED PROFESSIONAL FEES Revenue Objects 3562 and 3572 RATE AND BASE State: Varies by agency and profession Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: See Appendix E No. of Fees Collected: N/A Payment Cycle: Annual, biennial, or as set by board or commission Due Date: May be staggered Remitted by: Organizations/agencies governing fee-paying licensees LEGAL CITATION(S) See Appendix E ENACTED See Appendix E RATE AND BASE CHANGES 70th Legislature (1987) $110 temporary fee increase on selected professions 72nd Legislature (1991) $200 fee increase on selected professions 78th Legislature (2003) $200 fee increase on selected professions 84th Legislature (2015) Repeal $200 fee increases on selected professions 85th Legislature (2017) Repeal registration fee (chiropractors) and administrative penalties on selected professions Note: $200 fee increases had been deposited to Revenue Object 3572; henceforth to be used only for the $80 surcharge on doctors ALLOCATION $80 surcharge for doctors: GR Account – Public Assurance 5105 Fee for solid waste technicians: GR Account – Texas Commission on Environmental Quality Occupational Licensing 0468 Fee for forensic analysts: GR Account – Texas Forensic Science Commission 5173 All other health-related professional fees: General Revenue Fund 0001 Texas Comptroller of Public Accounts – January 2019 118 Sources of Revenue HEALTH RELATED PROFESSIONAL FEES (concluded) Revenue Objects 3562 and 3572 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1 1989 1990 1991 1992 1993 1994 1995 1996 2 1997 1998 1999 $ 384 364 463 561 581 805 884 967 869 945 1,297 1,805 2,113 2,301 2,200 2,729 8,897 9,652 3,817 3,758 7,532 7,968 11,768 9,752 23,070 24,085 24,539 25,132 Revenue Excludes Trust Percent Change $ 384 364 463 561 581 805 884 967 869 945 1,297 1,805 2,113 2,301 2,200 2,729 8,897 9,652 3,817 3,758 7,532 7,968 11,768 9,752 23,070 24,082 24,541 25,132 (5.1) 27.1 21.3 3.5 38.4 9.8 9.5 (10.2) 8.7 37.3 39.2 17.0 8.9 (4.4) 24.1 225.9 8.5 (60.5) (1.5) 100.4 5.8 47.7 (17.1) 136.6 4.4 1.9 2.4 Percent of Other Revenue 0.07 0.06 0.07 0.07 0.06 0.07 0.07 0.07 0.05 0.04 0.06 0.08 0.08 0.08 0.05 0.08 0.25 0.26 0.09 0.09 0.14 0.11 0.15 0.12 0.25 0.26 0.27 0.24 1 2 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 26,340 26,944 28,239 29,173 34,986 42,464 40,187 39,533 41,426 43,101 48,075 49,469 50,820 51,723 57,403 59,072 38,404 36,526 38,496 Revenue Excludes Trust Percent Change $ 26,340 26,944 28,239 29,173 34,986 42,464 40,187 39,533 41,426 43,101 48,075 49,469 50,820 51,723 57,403 59,072 38,404 36,526 38,496 4.8 2.3 4.8 3.3 19.9 21.4 (5.4) (1.6) 4.8 4.0 11.5 2.9 2.7 1.8 11.0 2.9 (35.0) (4.9) 5.4 Percent of Other Revenue 0.27 0.25 0.26 0.26 0.29 0.32 0.28 0.25 0.21 0.28 0.32 0.29 0.29 0.28 0.29 0.28 0.16 0.16 0.15 Revenue Object codes 3561 and 3565-3567 were used from 1988-1993, and have since expired and are no longer used in calculating the net collections for this revenue source. Starting in fiscal 1996, the $200 fee increase on selected professions was recorded using Revenue Object code 3572; $200 fee increase repealed by the 84th Legislature (2015). 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 119 Sources of Revenue HIGHER EDUCATION TUITION FEES – Non-Pledged Revenue Object 3505 RATE AND BASE State: For resident students at general academic teaching institutions: $50 per semester credit hour. Per semester hour fees for non-resident students are an average based on non-resident public university tuition charged in 5 of the most populous states (except Texas). Fees for semester hour or academic year, for both resident and non-resident students, may differ for programs leading to certain degrees (e.g., coursework leading to an M.D., D.O., D.D.S., D.V.M. or law degree) Local: Various Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Higher Education Coordinating Board; state colleges and universities No. of Fees Collected: Payment Cycle: Per semester Due Date: Upon registration Remitted by: Students and parents LEGAL CITATION(S) Texas Education Code, §§ 54.051, 54.0513 ENACTED 43rd Legislature (1933) RATE AND BASE CHANGES 68th Legislature, 2nd Called Session (1984) Non-resident tuition raised to $46/credit hour in 1986 and $53 in 1987 69th Legislature (1985) Resident tuition to $12/credit hour in 1986; $16 in 1987; $18 in 1990; $20 in 1992 72nd Legislature, 1st Called Session (1991) Resident tuition to $24/credit hour in 1993; $26 in 1994; $28 in 1995; $30 in 1996; $32 in 1997 74th Legislature (1995) Resident tuition to $34/credit hour in 1998; $36 in 1999; $38 in 2000; $40 in 2001; non-resident tuition set at average of non-resident undergrad tuition charged residents of Texas by state universities in the 5 most populous states other than Texas 77th Legislature (2001) Resident tuition to $42/credit hour in 2002; $44 in 2003; $46 in 2004; $48 in 2005; $50 in 2006 78th Legislature (2003) Amended §54.0513, Education Code, allowing governing boards of institutions to charge any student an amount designated as tuition that the board considers necessary for effective operation of the institution ALLOCATION Current General Revenue-dedicated operating accounts of the various colleges and universities Texas Comptroller of Public Accounts – January 2019 120 Sources of Revenue HIGHER EDUCATION TUITION FEES – Non-Pledged (concluded) Revenue Object 3505 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 29,984 28,214 25,765 26,976 24,621 28,990 30,466 37,464 41,713 46,237 55,658 54,409 58,116 64,698 163,323 181,057 208,624 221,425 255,448 261,556 265,470 351,250 370,965 403,588 436,892 438,135 484,181 539,068 Revenue Excludes Trust Percent Change $ 29,419 27,610 25,150 26,374 24,621 28,990 30,466 37,464 41,713 46,237 55,658 54,409 58,116 61,698 164,316 181,057 208,624 221,425 252,361 257,588 260,615 349,944 372,264 403,588 436,892 438,135 484,181 539,068 (6.1) (8.9) 4.9 (6.6) 17.7 5.1 23.0 11.3 10.8 20.4 (2.2) 6.8 6.2 166.3 10.2 15.2 6.1 14.0 2.1 1.2 34.3 6.4 8.4 8.3 0.3 10.5 11.3 Percent of Other Revenue 5.72 4.87 3.64 3.38 2.73 2.67 2.47 2.84 2.45 2.16 2.36 2.44 2.32 2.07 4.05 5.18 5.91 5.97 6.22 5.99 4.84 5.05 4.62 4.80 4.82 4.69 5.24 5.17 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 538,040 564,976 561,304 654,291 665,915 731,823 782,735 777,578 764,623 771,037 830,167 878,442 928,720 925,985 936,458 974,472 1,128,525 1,082,028 1,181,162 $ 538,040 564,976 561,304 654,291 665,915 731,823 782,735 777,578 764,623 771,037 830,167 878,442 928,720 925,985 936,354 974,472 1,128,525 1,082,028 1,181,162 (0.2) 5.0 (0.6) 16.6 1.8 9.9 7.0 (0.7) (1.7) 0.8 7.7 5.8 5.7 (0.3) 1.1 4.1 15.8 (4.1) 9.2 Percent of Other Revenue 5.51 5.34 5.21 5.84 5.45 5.56 5.53 4.90 3.94 4.94 5.49 5.17 5.26 4.94 4.76 4.63 4.84 4.67 4.73 2,500,000 (Amounts in Thousands) 2,000,000 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Higher Education Coordinating Board Texas Comptroller of Public Accounts – January 2019 121 Sources of Revenue HOTEL OCCUPANCY TAX Revenue Objects 3138 and 3139 RATE AND BASE State: 6% of the price paid for a room by occupant Local: Cities — not to exceed 7% (up to 9% in special cases); counties — not to exceed 7% (less than 7% or up to 9%, depending on specific circumstances); sports and community venues — not to exceed 2% Federal: None Major Exemptions: State and federal employees; long-term residents; educational, charitable and religious organizations ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 11,896 Payment Cycle: Monthly or quarterly Due Date: Monthly — 20th day of the month for the preceding month Quarterly — 20th day of April, July, October, and January for the preceding quarter Remitted By: Hotel, motel and other lodging owners LEGAL CITATION(S) Texas Tax Code, §§ 156.051 - 156.053, 156.251 - 156.2513 (state) Texas Tax Code, §§ 351.001 - 351.110 (cities) Texas Tax Code, §§ 352.001 - 352.113 (counties) Texas Local Government Code, §§ 334.251-334.258 (sports and community venues) ENACTED 56th Legislature (1959) 3% (state) 62nd Legislature (1971) (for cities) 67th Legislature (1981) (for counties) 75th Legislature (1997) (for sports and community venues) RATE AND BASE CHANGES 68th Legislature (1984) 4% (eff. 10/2/84) 70th Legislature (1987) 6% (eff. 9/1/87) ALLOCATION General Revenue Fund 0001 — 91.67% GR - Account Hotel Occupancy Tax for Economic Development 5003 — 8.33% Note: In addition to the above allocations, revenue associated with certain events is deposited to various Events Trust Funds. Note: Certain eligible coastal municalities are elible to receive refunds of state funds, based on their hotel revenue and computed to be equivalent to an amount representative of a two percent tax rate, from the General Revenue Fund. Texas Comptroller of Public Accounts – January 2019 122 Sources of Revenue HOTEL OCCUPANCY TAX (concluded) Revenue Objects 3138 and 3139 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 8,482 9,483 10,803 12,236 14,378 17,020 20,681 24,528 29,478 35,368 42,397 40,373 44,563 60,677 64,818 62,498 89,969 105,639 114,889 121,140 127,080 135,735 145,655 171,362 176,456 185,606 207,179 219,917 Revenue Excludes Trust Percent Change $ 8,482 9,483 10,803 12,236 14,378 17,020 20,681 24,528 29,478 35,368 42,397 40,373 44,563 60,677 64,818 62,498 89,969 105,639 114,889 121,140 127,080 135,735 145,655 171,362 176,456 185,606 207,179 219,917 11.8 13.9 13.3 17.5 18.4 21.5 18.6 20.2 20.0 19.9 (4.8) 10.4 36.2 6.8 (3.6) 44.0 17.4 8.8 5.4 4.9 6.8 7.3 17.6 3.0 5.2 11.6 6.1 Percent of Taxes 0.36 0.37 0.36 0.36 0.37 0.39 0.41 0.46 0.46 0.46 0.49 0.48 0.48 0.57 0.63 0.61 0.73 0.82 0.84 0.81 0.80 0.80 0.80 0.91 0.89 0.88 0.92 0.93 1 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2015 2016 2017 2018 $ 235,804 246,813 230,909 227,899 238,862 262,092 308,019 340,634 370,980 343,544 330,809 364,083 408,167 451,944 493,162 531,573 533,498 546,613 614,894 $ 235,804 246,813 230,909 227,899 238,862 262,092 308,019 340,634 370,980 343,544 330,809 348,796 401,411 441,132 485,385 525,819 521,153 530,716 601,244 7.2 4.7 (6.4) (1.3) 4.8 9.7 17.5 10.6 8.9 (7.4) (3.7) 5.4 15.1 9.9 10.0 8.3 (0.9) 1.8 13.3 Percent of Taxes 0.93 0.91 0.88 0.87 0.86 0.88 0.92 0.92 0.90 0.91 0.94 0.90 0.91 0.92 0.95 1.02 1.08 1.07 1.08 Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed) and the Motor Sports and Racing Trust Fund started receiving certain taxes 600,000 (Amounts in Thousands) 500,000 400,000 300,000 200,000 100,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 123 Sources of Revenue INSURANCE MAINTENANCE TAXES — DEPARTMENT OF INSURANCE Revenue Object 3203 RATE AND BASE State: Various rates set annually by Texas Department of Insurance, not to exceed legislative caps, on correctly reported gross insurance/annuity premiums or enrollees covered by Health Maintenance Organization (HMO) policies and certificates for the preceding calendar year Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 2,652 Payment Cycle: Annually Due Date: March 1 Remitted by: Insurance companies, HMOs, burial associations, non-profit legal services, third party administrators and certified self-insurers LEGAL CITATION(S) Texas Insurance Code, §§ 251.001, 252.001-002, 253.001-002, 254.001-002, 255.001-002, 256.001-002, 258.002-003, 259.002-003, 260.001-002, 261.002-003, 271.002-005, 888.051, 964.068 ENACTED 36th Legislature (1920) Fire and catastrophe insurance RATE AND BASE CHANGES 40th Legislature (1927) Motor vehicle insurance added 41st Legislature (1929) Title insurance added 45th Legislature (1937) Workers’ compensation insurance added 49th Legislature (1945) General casualty insurance added 50th Legislature (1947) Burial associations added 64th Legislature (1975) Prepaid legal added (eff. 9/1/75); HMOs added (eff. 12/1/75) 66th Legislature (1979) Aircraft added (eff. 6/7/79); HMOs removed (eff. 6/13/79) 70th Legislature (1987) Life, Accident, and Health (LAH) and HMOs added (eff. 8/31/87) 70th Legislature, 2nd Called Session (1987) Third party administrators added (eff. 10/20/87) 78th Legislature (2003) Certified self-insurer groups added (eff. 9/1/03) 80th Legislature (2007) Workers’ compensation third-party administrators added (eff. 1/1/08) 83rd Legislature (2013) Captive insurance companies added 84th Legislature (2015) First $3.05 million of total annual maintenance tax revenue to new Floodplain Management Fund 0330; remainder to GR – Account Department of Insurance Operating 0036 NOTE: Prior to 1994, this revenue code was used for maintenance taxes collected by the Workers Compensation Commission (WCC) and Workers Compensation Research and Oversight Counsel only. From 1994 to 1995, this code was used for all maintenance taxes collected. Beginning in 1996, some workers compensation taxes were moved to separate Revenue Object codes (3219, 3220); in 2014, title maintenance tax moved to 3206. This code — Revenue Object 3208 — now accounts for all other insurance maintenance taxes ALLOCATION Fiscal Years 2016 and 2017 Disaster Contingency Fund 0453 — first $3.05 million in total annual maintenance tax revenue Fiscal Year 2018 and after Floodplain Management Fund 0330 — first $3.05 million in total annual maintenance tax revenue GR – Account Department of Insurance Operating 0036 — remainder Texas Comptroller of Public Accounts – January 2019 124 Sources of Revenue INSURANCE MAINTENANCE TAXES — DEPARTMENT OF INSURANCE (concluded) Revenue Object 3203 * NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds Revenue Excludes Trust Percent Change 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 4,637 7,364 8,237 6,487 10,402 9,057 11,371 9,622 12,181 15,392 19,079 18,389 22,672 21,802 24,171 37,082 24,188 53,372 67,751 96,901 84,293 78,447 107,009 107,475 42,747 44,380 45,828 42,155 $ 4,637 7,364 8,237 6,487 10,402 9,057 11,371 9,622 12,181 15,392 19,079 18,389 22,672 21,802 24,171 37,082 24,188 53,372 67,751 96,901 84,293 78,447 107,009 107,475 42,747 44,380 43,751 39,414 58.8 11.9 (21.2) 60.3 (12.9) 25.5 (15.4) 26.6 26.4 24.0 (3.6) 23.3 (3.8) 10.9 53.4 (34.8) 120.6 26.9 43.0 (13.0) (6.9) 36.4 0.4 (60.2) 3.8 (1.4) (9.9) Percent of Taxes 0.20 0.29 0.27 0.19 0.27 0.20 0.23 0.18 0.19 0.20 0.22 0.22 0.24 0.20 0.24 0.36 0.20 0.41 0.50 0.65 0.53 0.46 0.59 0.57 0.22 0.21 0.19 0.17 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 37,575 48,296 49,308 53,237 34,230 31,629 55,637 52,039 64,500 59,139 69,257 71,599 82,453 78,669 83,188 82,911 85,903 90,973 92,631 $ 37,575 48,296 49,308 53,237 34,230 31,629 55,637 52,039 64,500 59,139 69,257 71,599 82,453 78,669 83,188 82,911 85,903 90,973 92,631 (4.7) 28.5 2.1 8.0 (35.7) (7.6) 75.9 (6.5) 23.9 (8.3) 17.1 3.4 15.2 (4.6) 5.7 (0.3) 3.6 5.9 1.8 Percent of Taxes 0.15 0.18 0.19 0.20 0.12 0.11 0.17 0.14 0.16 0.16 0.20 0.18 0.19 0.16 0.16 0.16 0.18 0.18 0.17 * Revenue Object code 3671 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections † No revenue deposited to trust 120,000 (Amounts in Thousands) 100,000 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts; Texas Department of Insurance Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 125 Sources of Revenue INSURANCE MAINTENANCE TAX — WORKERS’ COMPENSATION DIVISION AND OFFICE OF INJURED EMPLOYEE COUNSEL Revenue Object 3219 RATE AND BASE State: A rate set annually by the Texas Department of Insurance, not to exceed 2% of the correctly reported gross workers’ compensation insurance premiums for the preceding calendar year Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 302 insurance companies and 6 self-insurers Payment Cycle: Annually Due Date: March 1 — for policies issued in the preceding calendar year (insurance companies); 60th day following initial certification or annual renewal (self-insurers) Remitted by: Insurance companies writing workers’ compensation insurance and workers’ compensation self-insurers LEGAL CITATION(S) Texas Labor Code, §§ 403.001-.003, 403.007, 407.103-.104, 407A.302 ENACTED 55th Legislature (1957) 0.25% (eff. 9/1/57) RATE AND BASE CHANGES 62nd Legislature (1971) Self-insurers added to base (eff. 9/1/71) 65th Legislature (1977) 0.45% (eff. 8/29/77) 69th Legislature (1985) Not to exceed 0.70% (eff. 9/1/85) 71st Legislature (1989) Rate set annually, not to exceed 2% (eff. 4/1/90) NOTE: For 1978-95, this tax was collected under object code 3203. After 1995, object code 3219 was used. ALLOCATION GR – Account Department of Insurance Operating 0036 — 100% Texas Comptroller of Public Accounts – January 2019 126 Sources of Revenue INSURANCE MAINTENANCE TAX — WORKERS’ COMPENSATION DIVISION AND OFFICE OF INJURED EMPLOYEE COUNSEL (concluded) Revenue Object 3219 NET COLLECTIONS Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 47,042 49,841 48,790 56,247 Percent Change 5.9 (2.1) 15.3 (Amounts in Thousands) Percent of Taxes Year 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.24 0.24 0.22 0.24 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 51,718 60,547 72,518 74,188 54,638 40,963 49,884 54,196 45,101 52,170 66,207 55,984 55,599 49,988 59,071 58,554 56,006 54,305 58,481 Percent Change Percent of Taxes (8.1) 17.1 19.8 2.3 (26.4) (25.0) 21.8 8.6 (16.8) 15.7 26.9 (15.4) (0.7) (10.1) 18.2 (0.9) (4.4) (3.0) 7.7 0.20 0.22 0.28 0.28 0.20 0.14 0.15 0.15 0.11 0.14 0.19 0.14 0.13 0.10 0.12 0.11 0.12 0.11 0.11 † No revenue deposited to trust 1 Prior to 1996, this revenue was deposited in object code 3203. 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Insurance Texas Comptroller of Public Accounts – January 2019 127 Sources of Revenue INSURANCE PREMIUM TAXES Revenue Object 3201 * RATE AND BASE State: Tax levied on gross premiums written in Texas: Accident and health insurance — 1.75% Licensed captive insurers — 0.5% on premium written regardless of risk location, minimum tax of $7,500 and maximum tax of $200,000 Life insurance and health maintenance organizations — 0.875% of the first $450,000 in premiums or receipts and 1.75% on amounts in excess of $450,000 Property and casualty insurance — 1.6% Retaliatory tax — applicable to foreign insurers only if insurance taxes and fees imposed by another state on Texas insurers exceed insurance taxes and fees imposed by Texas on the foreign insurer Title insurance — 1.35% Unauthorized, independently procured and surplus lines — 4.85% Local: None Federal: None Major Exemptions: Certain Medicare premiums, public employee group coverage, crop insurance premiums reinsured by the Federal Crop Insurance Corporation (FCIC) ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 11,029 Payment Cycle: Estimated liability prepaid semiannually; annual report filed March 1st for actual premium tax Due Date: Tax reports: Annually — March 1 (independently procured due annually on May 15th) Payments: semiannually — March 1 and Aug. 1 (independently procured due annually on May 15th) Remitted By: Insurance companies, Health Maintenance Organizations (HMOs), surplus lines agents, independent procurers and buyers (or their agents) who procure insurance from entities out of state or unlicensed in Texas LEGAL CITATION(S) Texas Insurance Code, §§ 221.002, 222.002-003, 223A.003, 224.002, 225.004, 226.003, 226.053, 281.004 Texas Labor Code, § 407A.304 ENACTED Pre 1907: Insurance companies assessed a flat $50 annual tax 30th Legislature (1907) Foreign life, accident and health 32nd Legislature (1911) Fire, casualty and other 44th Legislature (1936) Texas life, accident and health 70th Legislature (1987) Title separated from property and casualty 78th Legislature (2003) Certified self-insurer groups, CHIP and Medicaid HMOs, CAPCO premium tax credits for 2009-12 80th Legislature (2007) CAPCO premium tax credits for 2013-2016 83rd Legislature (2013) Captive insurance companies RATE AND BASE CHANGES See Appendix F ALLOCATION General Revenue Fund 0001 — 75% GR Account - Foundation School 0193 — 25% Texas Comptroller of Public Accounts – January 2019 128 Sources of Revenue INSURANCE PREMIUM TAXES (concluded) Revenue Object 3201 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1 1994 1 1995 1996 1997 1998 1999 $ 65,854 76,382 83,414 90,795 101,045 118,302 136,062 156,881 163,926 173,774 181,037 205,304 339,788 345,955 384,716 386,175 401,134 361,936 455,285 484,583 470,931 384,530 649,054 498,195 535,804 610,050 656,434 707,665 Percent Change Percent of Taxes 16.0 9.2 8.8 11.3 17.1 15.0 15.3 4.5 6.0 4.2 13.4 65.5 1.8 11.2 0.4 3.9 (9.8) 25.8 6.4 (2.8) (18.3) 68.8 (23.2) 7.5 13.9 7.6 7.8 2.81 2.96 2.76 2.69 2.58 2.68 2.70 2.91 2.58 2.24 2.09 2.42 3.65 3.23 3.76 3.76 3.24 2.80 3.34 3.25 2.97 2.26 3.58 2.64 2.71 2.88 2.90 3.00 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † 1 2 Total Revenue † $ 706,000 716,169 920,367 1,045,413 1,097,834 1,127,326 1,131,800 1,237,240 1,332,848 1,139,851 1,194,611 1,234,522 1,364,172 1,617,191 1,810,738 1,907,673 2,088,988 2,230,844 2,356,335 Percent Change Percent of Taxes (0.2) 1.4 28.5 13.6 5.0 2.7 0.4 9.3 7.7 (14.5) 4.8 3.3 10.5 18.5 12.0 5.4 9.5 6.8 5.6 2.79 2.63 3.50 4.00 3.93 3.78 3.37 3.35 3.22 3.01 3.38 3.18 3.09 3.38 3.55 3.69 4.31 4.49 4.24 Revenue object code 3654 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust $73.9 million collected in fiscal 1993 was not processed until fiscal 1994; fiscal 1994 also includes $105 million in speed-up Includes a $48.7 million deduction for CAPCO premium tax credits (HB 2425) 2,500,000 (Amounts in Thousands) 2,000,000 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Insurance Texas Comptroller of Public Accounts – January 2019 129 Sources of Revenue LIQUOR TAX Revenue Object 3253 RATE AND BASE State: $2.40 per gallon Local: None Federal: $13.50 per proof gallon* Major Exemptions: Shipments out-of-state for consumption out-of-state * For calendar years 2018 and 2019: Proof gallons of 22,230,000 or less — $2.70 or $13.34 per gallon, depending on volume. Proof gallons of over 22,230,000 — $13.50 per gallon. ADMINISTRATION Agency: Texas Alcoholic Beverage Commission Number of Taxpayers: 1,088 Payment Cycle: Monthly Due Date: 15th day of the month for the preceding month Remitted By: Liquor distillers, wholesalers and distributors LEGAL CITATION(S) Texas Alcoholic Beverage Code, § 201.03 (the “Distilled Spirits” tax) ENACTED 44th Legislature (1935) $0.80 per gallon RATE AND BASE CHANGES 44th Legislature (1936) $0.96 per gallon 47th Legislature (1941) $1.28 per gallon 51st Legislature (1950) $1.408 per gallon (temporary) 52nd Legislature (1951) $1.408 per gallon 56th Legislature (1959) $1.68 per gallon 62nd Legislature (1971) $2 per gallon 68th Legislature (1984) $2.40 per gallon (eff. 10/2/84) ALLOCATION General Revenue Fund 0001 and/or certain Events Trust Funds — 100% Texas Comptroller of Public Accounts – January 2019 130 Sources of Revenue LIQUOR TAX (concluded) Revenue Object 3253 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 29,388 31,038 32,901 35,125 35,804 38,026 41,359 43,139 44,286 46,339 48,327 47,506 47,171 52,981 51,695 46,906 44,647 44,042 44,097 43,857 43,918 44,795 43,079 42,514 42,430 42,725 43,717 45,708 Revenue Excludes Trust Percent Change $ 29,388 31,038 32,901 35,125 35,804 38,026 41,359 43,139 44,286 46,339 48,327 47,506 47,171 52,981 51,695 46,906 44,647 44,042 44,097 43,857 43,918 44,795 43,079 42,514 42,430 42,725 43,717 45,708 5.6 6.0 6.8 1.9 6.2 8.8 4.3 2.7 4.6 4.3 (1.7) (0.7) 12.3 (2.4) (9.3) (4.8) (1.4) 0.1 (0.5) 0.1 2.0 (3.8) (1.3) (0.2) 0.7 2.3 4.6 Percent of Taxes 1.25 1.20 1.09 1.04 0.91 0.86 0.82 0.80 0.70 0.60 0.56 0.56 0.51 0.49 0.51 0.46 0.36 0.34 0.32 0.29 0.28 0.26 0.24 0.23 0.21 0.20 0.19 0.19 1 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2015 2016 2017 2018 $ 48,281 47,813 49,201 50,271 52,595 53,403 57,897 60,763 66,214 64,149 66,671 70,439 73,642 75,091 79,530 84,185 87,010 88,978 95,390 Revenue Excludes Trust Percent Change $ 48,281 47,813 49,201 50,271 52,595 53,403 57,897 60,763 66,214 64,149 66,671 70,347 73,584 75,023 79,474 84,133 86,942 88,899 95,333 5.6 (1.0) 2.9 2.2 4.6 1.5 8.4 4.9 9.0 (3.1) 3.9 5.5 4.6 2.0 5.9 5.9 3.3 2.3 7.2 Percent of Taxes 0.19 0.18 0.19 0.19 0.19 0.18 0.17 0.16 0.16 0.17 0.19 0.18 0.17 0.16 0.16 0.16 0.18 0.18 0.17 Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed) and the Motor Sports and Racing Trust Fund started receiving alcoholic beverage taxes 100,000 (Amounts in Thousands) 80,000 60,000 40,000 20,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Alcoholic Beverage Commission Texas Comptroller of Public Accounts – January 2019 131 Sources of Revenue LOTTERY PROCEEDS Transfer Object 3922 and 3963 RATE AND BASE State: Revenue from gross lottery ticket sales less: prizes paid out to winners, retailer commissions, and other costs such as administrative expenses. The remaining amount is referred to here as the “state share” (see allocation below and historical amounts on p. 133). Lottery ticket prices range from $1 to $50 for instant (or scratch) games; up to $2 for draw games. Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Lottery Commission Number of Retailers: 17,000+ Payment Cycle: Proceeds from the sale of lottery tickets and retailer fees are transferred (see Allocation) monthly; unclaimed prizes are transferred quarterly Due Date: The Texas Lottery Commission is required to transfer proceeds from ticket sales and retailer fees by no later than the 15th of each month. Remitted by: Retailers LEGAL CITATION(S) Texas Government Code, Chapters 466 and 467 ENACTED 72nd Legislature, 1st C.S. (1991) RATE AND BASE CHANGES None ALLOCATION OF STATE SHARE Proceeds from ticket sales and retailer fees Proceeds from instant (or scratch) game tickets for veteranʼs assistance: Fund for Veteranʼs Assistance 0368 All remaining proceeds from ticket sales and retailer fees: Foundation School Fund Account 0193 Unclaimed prizes, in order of priority Up to $20 million to the State Owned Multicategorical Teaching Hospital Account 5049; then Up to $5 million to the Human and Human Services Commission; then Up to $5 million to the Fund for Veteran̛s Assistance 0368; (the first, second and third allocations of unclaimed prizes are subject to Legislative appropriation) Any remaining unclaimed prizes, after the above allocation priority has been followed, are deposited to the Foundation School Fund Account 0193 Texas Comptroller of Public Accounts – January 2019 132 Sources of Revenue LOTTERY PROCEEDS (concluded) Transfer Object 3922 and 3963 NET COLLECTIONS (Amounts in Thousands) State Share Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1 1993 1994 1995 1996 1997 1998 1999 Prizes, Administration, and Other $ 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 284,277 307,294 716,546 1,139,545 842,083 1,918,135 899,061 2,137,457 1,470,375 1,961,934 1,562,073 2,183,396 1,389,446 1,700,586 1,146,962 1,424,638 Gross Ticket Sales $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 591,571 1,856,091 2,760,217 3,036,517 3,432,309 3,745,469 3,090,032 2,571,600 Percent Percent of Other Change Revenue 213.8 48.7 10.0 13.0 9.1 (17.5) (16.8) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.28 10.34 10.46 10.68 16.21 16.74 15.05 11.00 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1 State Share Prizes, Administration, and Other $ 995,787 $ 1,661,504 872,791 1,952,507 956,587 2,009,675 955,186 2,175,507 1,044,135 2,443,789 1,096,823 2,565,640 1,066,138 2,708,548 1,089,393 2,684,786 1,036,682 2,634,796 1,043,494 2,676,620 1,094,623 2,643,747 1,025,094 2,786,176 1,153,561 3,037,255 1,079,722 3,296,564 1,235,981 3,148,616 1,237,769 3,291,932 1,398,340 3,669,178 1,294,907 3,782,555 1,464,389 4,162,458 Gross Ticket Sales Percent Percent of Other Change Revenue $ 2,657,290 2,825,298 2,966,262 3,130,693 3,487,925 3,662,463 3,774,686 3,774,179 3,671,478 3,720,114 3,738,369 3,811,270 4,190,816 4,376,286 4,384,597 4,529,700 5,067,518 5,077,462 5,626,847 3.3 6.3 5.0 5.5 11.4 5.0 3.1 (0.0) (2.7) 1.3 0.5 2.0 10.0 4.4 0.2 3.3 11.9 0.2 10.8 10.20 8.25 8.88 8.52 8.54 8.33 7.53 6.87 5.35 6.69 7.23 6.04 6.53 5.76 6.28 5.88 5.99 5.58 5.87 Partial year: instant game ticket sales began May 29, 1992 2,000,000 (Amounts in Thousands) 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 State Share Source(s): Texas Comptroller of Public Accounts; Texas Lottery Commission Texas Comptroller of Public Accounts – January 2019 133 Sources of Revenue MALT LIQUOR (ALE) TAX Revenue Object 3265 RATE AND BASE State: $0.198 per gallon Local: None Federal: $18.00 per 31-gallon barrel (see Beer Tax) Major Exemptions: Shipments out-of-state for consumption out-of-state ADMINISTRATION Agency: Texas Alcoholic Beverage Commission Number of Taxpayers: 617 (note: including brew pubs) Payment Cycle: Monthly Due Date: 15th day of the month for the preceding month Remitted By: Malt liquor (ale) wholesalers, brewers and brew pubs LEGAL CITATION(S) Texas Alcoholic Beverage Code, § 201.42 (the “Ale and Malt Liquorˮ tax) ENACTED 44th Legislature (1935) $0.15 per gallon RATE AND BASE CHANGES 52nd Legislature (1951) $0.165 per gallon 68th Legislature (1984) $0.198 per gallon (eff. 10/02/84) ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 134 Sources of Revenue MALT LIQUOR (ALE) TAX (concluded) Revenue Object 3265 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 774 829 920 946 1,099 1,244 1,604 1,895 2,126 2,459 2,680 2,552 2,303 2,279 2,742 3,141 3,366 3,548 4,096 4,420 4,148 5,112 5,390 5,799 5,218 5,253 5,023 5,025 Percent Change Percent of Taxes 7.2 10.9 2.8 16.2 13.2 28.9 18.2 12.2 15.6 9.0 (4.8) (9.8) (1.0) 20.3 14.6 7.1 5.4 15.4 7.9 (6.2) 23.3 5.4 7.6 (10.0) 0.7 (4.4) 0.0 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.03 0.03 0.03 0.03 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.02 0.02 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 4,771 4,699 4,454 4,618 4,851 5,995 6,048 6,560 7,232 7,949 8,923 9,688 11,297 13,075 13,853 14,415 15,059 14,924 14,573 Percent Change (5.1) (1.5) (5.2) 3.7 5.1 23.6 0.9 8.5 10.2 9.9 12.3 8.6 16.6 15.7 5.9 4.1 4.5 (0.9) (2.4) Percent of Taxes 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 No revenue deposited to trust 20,000 (Amounts in Thousands) 15,000 10,000 5,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Alcoholic Beverage Commission Texas Comptroller of Public Accounts – January 2019 135 Sources of Revenue MANUFACTURED HOUSING SALES AND USE TAX Revenue Object 3104 RATE AND BASE State: 5% of 65% or .0325 of sales price on the initial sale or use of a new manufactured home Local: None Federal: None Major Exemptions: Sales to governments, certain non-profit entities ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 28 Payment Cycle: Monthly Due Date: On or before the last day of the month for the preceding month Remitted By: Manufacturers LEGAL CITATION(S) Texas Tax Code, §§ 158.051, 158.052, 158.057, 158.058, 158.101 ENACTED 67th Legislature (1981) 6.5% of 65% of manufacturer’s selling price from 3/1/82 to 8/31/83; 5% of 65%, beginning 9/1/83 RATE AND BASE CHANGES None ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 136 Sources of Revenue MANUFACTURED HOUSING SALES AND USE TAX (concluded) Revenue Object 3104 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 15,294 32,583 24,167 19,256 11,623 6,480 3,588 2,439 2,966 3,205 5,151 10,056 17,034 23,268 27,476 34,251 37,020 43,674 Percent Change Percent of Taxes 113.1 (25.8) (20.3) (39.6) (44.3) (44.6) (32.0) 21.6 8.0 60.7 95.2 69.4 36.6 18.1 24.7 8.1 18.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.18 0.38 0.26 0.18 0.11 0.06 0.03 0.02 0.02 0.02 0.03 0.06 0.09 0.12 0.14 0.16 0.16 0.18 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † 1 Total Revenue † $ 33,829 21,862 18,996 13,062 12,504 11,454 13,348 12,451 14,181 10,787 9,907 9,380 12,757 14,459 17,429 18,954 18,329 20,037 26,020 Percent Change Percent of Taxes (22.5) (35.4) (13.1) (31.2) (4.3) (8.4) 16.5 (6.7) 13.9 (23.9) (8.2) (5.3) 36.0 13.3 20.5 8.8 (3.3) 9.3 29.9 0.13 0.08 0.07 0.05 0.04 0.04 0.04 0.03 0.03 0.03 0.03 0.02 0.03 0.03 0.03 0.04 0.04 0.04 0.05 No revenue deposited to trust Before 1982, Manufactured Housing Sales and Use tax receipts were deposited under object code 3004 for the Motor Vehicle Sales and Use tax 50,000 (Amounts in Thousands) 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 137 Sources of Revenue MEDICAL EXAM & REGISTRATION FEES Revenue Object 3560 RATE AND BASE State: Examination and registration fees for doctors; nurses; EMS; radiologic techs; midwives; perfusionists; respiratory care practitioners; physician assistants; and permits to administer medication to certain persons; fees vary depending on occupation and initial or renewal application Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Medical Board, Department of State Health Services, Texas Health and Human Services Commission, Texas Department of Licensing and Regulation, Texas Board of Nursing and the Texas Higher Education Coordinating Board No. of Fees Collected: N/A Payment Cycle: N/A Due Date: Annual, biennial or as determined by the appropriate agency Remitted by: Appropriate administrative agency LEGAL CITATION(S) Various, including parts of: Texas Health and Safety Code: Chapters 142, 242, 467 and 773 Texas Occupations Code: Chapters 51, 101, 153, 155, 156, 162, 167, 203, 204, 301, 601, 603 and 604 ENACTED Various, depending on fee RATE AND BASE CHANGES 67th Legislature, 1st C.S. (1981) Amended doctor’s fees 68th Legislature (1983) Increased doctor’s fees 74th Legislature (1995) Added out of state/country EMS certification fees 75th Legislature (1997) Added EMS provisional license, paramedic license and training fees 76th Legislature (1999) Increased doctor’s fees; added anesthesia in outpatient setting and physician-in-training fees 78th Legislature (2003) Increased emergency medical services fees and nursing licensing fees; added nursing license surcharge 81st Legislature (2009) Increased nursing license surcharge; fees for radiologic techs, midwives, perfusionists, respiratory care practitioners and other medical professionals added since 1983 84th Legislature (2015) Due date for fees associated with radiologic techs and midwives changed from annual to biennial 85th Legislature (2017) Civil penalties repealed (midwives); expedited processing fee added for doctors ALLOCATION Fee Revenue, Doctors: General Revenue Fund 0001 GR Account – Texas Physician Health Program 5147 (Texas Physician Health Program fee) Fee Revenue, EMS: GR Account – Bureau of Emergency Management 0512 All Other Fee Revenue: General Revenue Fund 0001 Texas Comptroller of Public Accounts – January 2019 138 Sources of Revenue MEDICAL EXAM & REGISTRATION FEES (concluded) Revenue Object 3560 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 398 429 452 484 948 1,069 1,161 1,278 1,025 1,137 2,915 3,278 3,513 3,698 3,934 5,993 7,175 7,917 9,107 9,432 18,320 19,993 13,030 25,663 13,636 14,120 15,130 15,566 Revenue Excludes Trust Percent Change $ 398 429 452 484 948 1,069 1,161 1,278 1,025 1,137 2,915 3,278 3,513 3,698 3,934 5,993 7,175 7,917 9,107 9,432 18,320 19,993 13,030 25,663 13,636 14,117 15,133 15,566 7.8 5.3 7.1 96.0 12.8 8.6 10.0 (19.8) 10.9 156.5 12.4 7.2 5.3 6.4 52.3 19.7 10.3 15.0 3.6 94.2 9.1 (34.8) 97.0 (46.9) 3.5 7.2 2.9 Percent of Other Revenue 0.08 0.08 0.07 0.06 0.10 0.10 0.09 0.10 0.06 0.05 0.12 0.15 0.14 0.12 0.10 0.17 0.20 0.21 0.22 0.22 0.34 0.29 0.16 0.30 0.15 0.15 0.16 0.15 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 17,257 17,474 18,719 19,559 21,584 25,358 30,051 29,289 30,773 31,565 35,320 36,240 39,273 40,206 41,318 41,489 41,590 41,255 43,097 Revenue Excludes Trust Percent Change $ 17,257 17,474 18,719 19,559 21,584 25,358 30,051 29,289 30,773 31,565 35,320 36,240 39,273 40,206 41,318 41,489 41,590 41,255 43,097 10.9 1.3 7.1 4.5 10.4 17.5 18.5 (2.5) 5.1 2.6 11.9 2.6 8.4 2.4 2.8 0.4 0.2 (0.8) 4.5 Percent of Other Revenue 0.18 0.17 0.17 0.17 0.18 0.19 0.21 0.18 0.16 0.20 0.23 0.21 0.22 0.21 0.21 0.20 0.18 0.18 0.17 50,000 (Amounts in Thousands) 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 139 Sources of Revenue MIXED BEVERAGE TAXES Revenue Object 3250 and 3251* RATE AND BASE State: 6.7% of gross receipts from the sale, preparation or service of mixed beverages or from the sale, preparation or service of ice or nonalcoholic beverages that are sold, prepared or served for mixing with an alcoholic beverage and consumed on the premises. An 8.25% mixed beverage sales tax, levied in addition to the gross receipts tax Local: Counties and cities each receive 10.7143% of total collections within jurisdiction Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 12,945 Payment Cycle: Monthly (both gross receipts and sales tax); Quarterly (sales tax only) Due Date: 20th day of the month for the preceding month or quarter, as appropriate Remitted By: Permitted sellers of mixed beverages LEGAL CITATION(S) Texas Tax Code, §§ 183.021, 183.022, 183.023, 183.041, 183.043, 183.051 ENACTED 62nd Legislature (1971) 10% RATE AND BASE CHANGES 68th Legislature (1984) 12% (eff. 10/2/84) 71st Legislature (1990) 14% (eff. 7/1/90) 83rd Legislature (2013) Lowered existing gross receipts tax to 6.7%; added an 8.25% sales tax (both eff. 1/1/14) ALLOCATION General Revenue Fund 0001 and/or certain Events Trust Funds—100% Note: Counties (based on permitees outside cities) and municipalities (based on permitees inside cities) receive refunds issued on the General Revenue Fund of amounts equal to 10.7143% of both mixed beverage gross receipts tax and mixed beverage sales tax revenue originating in their respective territories. Texas Comptroller of Public Accounts – January 2019 140 Sources of Revenue MIXED BEVERAGE TAXES (concluded) Revenue Object 3250 and 3251* NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 15,367 20,799 28,665 33,869 40,428 55,300 62,230 73,103 86,416 115,795 139,227 145,750 157,317 192,846 198,107 182,261 177,042 181,505 194,880 236,645 245,199 249,073 256,072 261,900 272,728 285,050 306,026 328,998 Revenue Excludes Trust Percent Change $ 15,367 20,799 28,665 33,869 40,428 55,300 62,230 73,103 86,416 115,795 139,227 145,750 157,317 192,846 198,107 182,261 177,042 181,505 194,880 236,645 245,199 249,073 256,091 261,900 272,709 285,050 306,026 328,998 35.3 37.8 18.2 19.4 36.8 12.5 17.5 18.2 34.0 20.2 4.7 7.9 22.6 2.7 (8.0) (2.9) 2.5 7.4 21.4 3.6 1.6 2.8 2.3 4.1 4.5 7.4 7.5 Percent of Taxes 0.66 0.81 0.95 1.00 1.03 1.25 1.24 1.36 1.36 1.50 1.61 1.72 1.69 1.80 1.94 1.78 1.43 1.41 1.43 1.59 1.55 1.46 1.41 1.39 1.38 1.35 1.35 1.39 * 1 2 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2 2015 2016 2017 2018 $ 354,542 380,586 396,753 403,284 433,840 457,262 503,407 550,827 594,018 603,386 618,675 667,735 728,252 774,352 845,834 924,635 964,525 998,966 1,069,298 $ 354,542 380,586 396,753 403,284 433,840 457,262 503,407 550,827 594,018 603,386 618,675 665,056 727,275 771,312 843,224 922,121 959,975 991,838 1,061,322 7.8 7.3 4.2 1.6 7.6 5.4 10.1 9.4 7.8 1.6 2.5 7.5 9.4 6.1 9.3 9.4 4.1 3.3 7.0 Percent of Taxes 1.40 1.40 1.51 1.54 1.55 1.53 1.50 1.49 1.44 1.60 1.75 1.71 1.65 1.61 1.65 1.78 1.98 2.00 1.91 Revenue object code 3664 (relating to funds remitted under protest) was available through fiscal 2004 for use with revenue object 3250 in calculating net collections Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund(repealed) and the Motor Sports and Racing Trust Fund started receiving alcoholic beverage taxes Starting in 2014, revenue object code 3251 was created for the new Mixed Beverage Sales Tax 1,000,000 (Amounts in Thousands) 750,000 500,000 250,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 141 Sources of Revenue MOTOR VEHICLE CERTIFICATES Revenue Object 3012 RATE AND BASE State: $33 for each motor vehicle certificate of title issued in a federally designated “nonattainment” county, $28 for all other counties; $8 for non-repairable/salvage vehicle title; $65 rebuilder fee Local: None, but counties retain $5 from each title fee Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Department of Motor Vehicles (DMV) No. of Fees Collected: 8,377,143 Payment Cycle: Daily, except for funds invested by counties, which may be retained for an additional 34 days Due Date: See payment cycle above Remitted by: County tax assessor-collectors and DMV regional offices LEGAL CITATION(S) Texas Transportation Code, Chapters 501 and 520 ENACTED 46th Legislature (1939) $0.25 per certificate of title RATE AND BASE CHANGES 54th Legislature (1955) Increased fee to $0.75 65th Legislature (1977) Increased fee to $3.00 68th Legislature (1983) Increased fee to $10.00 72nd Legislature (1991) Increased fee to $13.00 78th Legislature (2003) For Texas Emissions Reduction Plan (TERP), raised $13 title fee by $20 in federally designated “nonattainment” counties, by $15 in other counties; imposed $8 application fee for non-repairable/salvage vehicle title; imposed $65 rebuilder fee on application for regular certificate of title for salvage vehicle 79th Legislature (2005) Delayed 2 years fee change from $20 to $15 for titles purchased in nonattainment counties to 9/1/10, and continued to allocate $5 of each $20 fee collected to TERP Fund 5071 (thru 8/31/10); subjected all-terrain vehicles to title fee 80th Legislature (2007) Removed permanently title fee change from $20 to $15 for titles purchased in nonattainment counties, and extended through 9/1/15 the allocation of $5 of each $20 title fee collected to TERP Fund 5071 81st Legislature (2009) Extended to 8/31/19 expiration of establishment by Comptroller of an amount of the fees deposited to Texas Mobility Fund from title fees each month, and the deposit of an equal amount from State Highway Fund 0006 to TERP Fund 5071; added recreational off-highway vehicles to definition of a motor vehicle 82nd Legislature (2011) Amended/reorganized Chapters 501, 502, 504 and 520 to authorize DMV to implement an electronic titling system for collection of registration/titling fees and service charges; require removal of plates and window stickers on sale of vehicle; provided temporary transit permits; and issued specialty plate to spouses of disabled veterans; required DMV to establish electronic lien system 83rd Legislature (2013) changed deposit from State Highway Fund 0006 to new Texas Department of Motor Vehicles Fund (the new fund was not exempted in funds consolidation bill (HB 6) and not created), therefore, revenue amounts intended for the new fund are deposited to General Revenue 0001 84th Legislature (2015) Department Motor Vehicles Fund 0010 recreated effective 9/1/2015; certain deposits that had been made to General Revenue deposited to new Fund 0010 beginning 9/1/2016 ALLOCATION $28 or $33 certificate of title fee: County tax assessor-collector — $5; General Revenue Fund 0001 — $5; Department Motor Vehicles Fund 0010 — $3; Texas Mobility Fund 0365 — $15 or $20, depending on county $8 application fee for non-repairable or salvage vehicle title: Department of Motor Vehicles Fund 0010 — 100% $65 rebuilder fee: State Highway Fund 0006 — $50; General Revenue Fund 0001 — $15 Electronic titling system fees (to be set by rule): Department of Motor Vehicles Fund 0010 — 100% Texas Comptroller of Public Accounts – January 2019 142 Sources of Revenue MOTOR VEHICLE CERTIFICATES (concluded) Revenue Object 3012 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 1,476 1,562 1,561 1,500 1,703 1,847 5,559 6,598 6,491 6,979 7,181 7,481 20,817 22,018 22,071 20,991 20,455 20,698 21,537 21,450 28,930 34,175 36,191 37,141 39,092 38,985 40,766 42,374 Percent Change Percent of Other Revenue 5.8 (0.0) (3.9) 13.5 8.4 201.0 18.7 (1.6) 7.5 2.9 4.2 178.3 5.8 0.2 (4.9) (2.6) 1.2 4.1 (0.4) 34.9 18.1 5.9 2.6 5.3 (0.3) 4.6 3.9 0.29 0.28 0.23 0.19 0.19 0.17 0.45 0.50 0.38 0.33 0.30 0.34 0.83 0.74 0.54 0.60 0.58 0.56 0.53 0.50 0.54 0.49 0.45 0.44 0.43 0.42 0.44 0.41 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 44,428 45,093 45,614 50,296 149,694 149,881 157,769 158,485 161,006 144,521 145,315 154,259 166,592 183,200 191,326 203,414 224,290 226,062 238,214 Percent Change Percent of Other Revenue 4.8 1.5 1.2 10.3 197.6 0.1 5.3 0.5 1.6 (10.2) 0.5 6.2 8.0 10.0 4.4 6.3 10.3 0.8 5.4 0.46 0.43 0.42 0.45 1.22 1.14 1.11 1.00 0.83 0.93 0.96 0.91 0.94 0.98 0.97 0.97 0.96 0.97 0.95 † No revenue deposited to trust 250,000 (Amounts in Thousands) 200,000 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Transportation; Texas Department of Motor Vehicles Texas Comptroller of Public Accounts – January 2019 143 Sources of Revenue MOTOR VEHICLE INSPECTION FEES Revenue Object 3020 RATE AND BASE State: $12.50 for annual vehicle inspection report, $21.75 for new vehicle two-year inspection; $50 for commercial vehicle annual inspection; $100 biennial fee for each inspection station; $25 biennial fee for each inspector; $10 Texas Emissions Reduction Plan (TERP) surcharge on commercial inspections Local: Emissions testing programs in 17 urban counties; fees vary by county Federal: None Major Exemptions: None; however, some trailers, semitrailers, farm machinery, road-building equipment and former military vehicles are not subject to inspection ADMINISTRATION Agency: Texas Department of Public Safety (DPS); Texas Department of Motor Vehicles (DMV) No. of Fees Collected: 21,712,955 Payment Cycle: Payments made by DMV or county tax assessor-collectors as vehicles are registered and fees paid Due Date: Upon registration of vehicle Remitted by: DMV or county tax assessor-collectors LEGAL CITATION(S) Texas Transportation Code, Chapter 548.501-548.509 Texas Health and Safety Code, Chapters 382 and 386 ENACTED 53rd Legislature (1953) $1 for annual inspection sticker ($0.25 to DPS) RATE AND BASE CHANGES Various annual sticker fee increases between 1955 and 1985 70th Legislature (1987) Added two-year inspections for $15 71st Legislature (1989) Annual sticker fee increased to $8.50; two-year sticker fee increased to $15.75 72nd Legislature (1991) Annual sticker fee increased to $10.50 73rd Legislature (1993) Two-year sticker fee increased to $19.75; added commercial inspection fee for $50 76th Legislature (1999) Annual sticker fee increased to $12.50; two-year sticker fee increased to $21.75 77th Legislature (2001) As part of Texas Emissions Reduction Plan (TERP), added $10 inspection fee surcharge on commercial inspections (eff. 9/1/01 thru 8/31/08) 78th Legislature (2003) Allows participating counties to adopt motor vehicle inspection and maintenance programs and charge a fee (eff. 6/10/03); revised allocations to Texas Mobility Fund 0365 (eff. 9/1/05) 79th Legislature (2005) Extended the TERP surcharges through fiscal 2010 (eff. 9/1/05) 80th Legislature (2007) Extended the TERP surcharge through 8/31/13 (eff. 9/1/07) 81st Legislature (2009) Extended the TERP surcharge through 8/31/19 (eff. 9/1/09) 82nd Legislature (2011) Increased biennial fee for inspector certification to $25 and biennial fee for inspection station to $100; established new administrative penalty for certain violations NTE $1,000 per violation 83rd Legislature (2013) Changed dual sticker inspection/registration system to a vehicle inspection with report followed by a vehicle registration; the inspection station portion of the fee is retained by the inspector; at time of registration, all remaining fees are paid — both for inspection and registration 84th Legislature (2015) Portion of inspection fee, initial 2-year new vehicle inspections only, for clean air reduced from $4 to $2 85th Legislature (2017) Certain trailers, not subject to inspection, required to pay $7.50 fee; Fee allocated $3.50 Texas Mobility Fund; $2.00 Clean Air Account; $2.00 General Revenue Fund ALLOCATION $12.50 annual vehicle inspection fee: Vehicle inspection station — $7; Texas Mobility Fund 0365 — $3.50; Clean Air Account 0151— $2 $21.75 two-year inspection fee for new vehicles: Vehicle inspection station — $7; Texas Mobility Fund 0365 — $12.75; Clean Air Account 0151 — $2 $50 annual commercial vehicle fee: Vehicle inspection station — $40; Texas Mobility Fund 0365 — $10 Emissions testing fee: Varies by program area. Allocation varies for inspection stations and Clean Air Account 0151 $10 commercial inspection surcharge (expires 8/31/2019): Emissions Reduction Plan Account 5071 — 100% Texas Comptroller of Public Accounts – January 2019 144 Sources of Revenue MOTOR VEHICLE INSPECTION FEES (concluded) Revenue Object 3020 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 3,579 3,806 3,883 4,064 4,237 4,481 9,895 9,792 18,271 18,331 18,914 19,900 23,321 24,568 41,324 37,189 38,029 36,935 46,760 46,488 64,121 66,950 82,741 81,087 78,440 85,964 78,012 101,746 Revenue Excludes Trust Percent Change $ 3,579 3,806 3,883 4,064 4,237 4,481 9,895 9,792 18,271 18,331 18,914 19,900 23,321 24,568 41,324 37,189 38,029 36,935 46,760 46,488 64,121 66,950 82,735 81,087 78,440 85,964 78,012 101,746 6.3 2.0 4.7 4.3 5.7 120.8 (1.0) 86.6 0.3 3.2 5.2 17.2 5.3 68.2 (10.0) 2.3 (2.9) 26.6 (0.6) 37.9 4.4 23.6 (2.0) (3.3) 9.6 (9.2) 30.4 Percent of Other Revenue 0.70 0.67 0.56 0.52 0.47 0.41 0.80 0.74 1.07 0.86 0.80 0.89 0.93 0.83 1.02 1.06 1.08 1.00 1.15 1.08 1.19 0.97 1.03 0.96 0.87 0.92 0.85 0.98 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 97,039 98,176 109,415 126,308 136,159 148,152 152,786 159,749 162,644 162,056 172,902 175,896 185,935 190,150 196,575 120,362 162,285 194,190 175,978 Revenue Excludes Trust Percent Change $ 97,039 98,176 109,415 126,308 136,159 148,152 152,786 159,750 162,644 162,056 172,902 175,896 185,935 190,150 196,575 120,362 162,285 194,190 175,978 (4.6) 1.2 11.4 15.4 7.8 8.8 3.1 4.6 1.8 (0.4) 6.7 1.7 5.7 2.3 3.4 (38.8) 34.8 19.7 (9.4) Percent of Other Revenue 0.99 0.93 1.02 1.13 1.11 1.13 1.08 1.01 0.84 1.04 1.14 1.04 1.05 1.02 1.00 0.57 0.70 0.84 0.70 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Department of Public Safety; Texas Department of Motor Vehicles Texas Comptroller of Public Accounts – January 2019 145 Sources of Revenue MOTOR VEHICLE REGISTRATION FEES RATE AND BASE State: Local: Federal: Major Exemptions: ADMINISTRATION Revenue Object 3014 Various rates generally based on type/weight of motor vehicle; passenger cars/light trucks less than than 6,000 pounds $50.75; vehicles over 6,000 pounds $54-$840, depending on weight; additional fees for personalized (NLT $40) and specialized plates ($30 most cases); $20 for souvenir plates, fee not to exceed $5 for temporary cardboard tag Optional county road and bridge fee not to exceed $10; optional county fee for child safety in some counties $0.50 to $1.50 None Federal, state and local governments; school districts Agency: Texas Department of Motor Vehicles (DMV) Payment Cycle: Annually Remitted by: County tax assessor-collectors No. of Fees Collected: 24,810,284 Due Date: Weekly unless invested per statute, then no later than 34 days after the due date LEGAL CITATION(S) Texas Transportation Code, Chapters 502-504, 520 ENACTED 35th Legislature (1917) $0.35 per horsepower; minimum of $7.50 RATE AND BASE CHANGES Numerous rate and base changes between 1917 and 1972 72nd Legislature (1991) 5% county commission paid from State Highway Fund 0006 76th Legislature (1999) Added $1 fee for automated registration and title system 77th Legislature (2001) Added/amended specialty license plates/fees; for Texas Emissions Reduction Plan (TERP), imposed a 10% surcharge on commercial vehicle registrations 78th Legislature (2003) Set specialty plate fee for general distribution to $30; added $1 fee to each registration for certain TxDPS programs; allowed TxDOT to issue souvenir plates for $20; revised formula to pay 5% to counties from Fund 0001 to be implemented over 10 years; reduced fee on certain disabled veteran license plates 79th Legislature (2005) Extended TERP 10% surcharge on commercial vehicle registrations to fiscal 2010; allowed sale of specialty license plates by vendor; created $8 registration fee for ATVs (eff. 9/1/06); lowered collegiate plate fee to $30; amended fee for “Donor Education/ Awareness/Registry Program of Texas” 80th Legislature (2007) Implemented $5 fee for temporary cardboard tags; expiration of 10% registration surcharge on commercial vehicles dedicated to TERP extended to 08/31/13; exempted emergency vehicles from toll payments to cover non-emergency travel 81st Legislature (2009) Expiration of TERP 10% registration surcharge on commercial vehicles extended to 8/31/19; allowed commercial fleet owners of 25+ vehicles to register fleet up to 8 years for extra $8-10 fee plus $1.50 manufacturing fee; extended $1 insurance fee on registrations to all counties; established DMV. Standardized various fees, including new $50.75 fee for vehicles <6,000 lbs; new fee schedule for vehicles/road tractors/trailers >6,000 lbs; $45 fee for certain trailers <6,000 lbs; reduced fee to $6 for golf carts; repealed $0.30 license plate reflector fee; eliminated license plate issuance fees for certain plates (all eff. 9/1/11) 82nd Legislature (2011) Numerous recodifications; new fees for electronic payments for registration; sets fees for state’s share of revenue from sale of specialty/personalized license plates by private vendor; authorize DMV to impose administrative penalty for violations by salvage vehicle dealers; specialty plate for disabled veteran surviving spouses; require dealers to remove tags/stickers from traded-in vehicles 83rd Legislature (2013) changed deposit from State Highway Fund 0006 to new Texas Department of Motor Vehicles Fund. The new fund was not exempted in funds consolidation bill (HB 6) and not created. Therefore, revenue amounts intended for the new fund are deposited to General Revenue 0001. Abolished specialty license plate accounts created under Transportation Code, Subchapter G and changed deposit of revenue to the License Plate Trust Fund (0802) 84th Legislature (2015) Department Motor Vehicles Fund 0010 recreated effective 9/1/2015; certain deposits that had been made to General Revenue deposited to new Fund 0010 beginning 9/1/2016. ALLOCATION Generally, for passenger vehicles and light truck registration: General Revenue Fund 0001 — $38.75 from personalized license plate fees; private vendor specialty if no designated account; $10 on some souvenir license plate fees; off-highway decal $8 or other amount. State Highway Fund 0006 — $50.75 for registration of vehicles <6,000 lbs (note: registration revenue of vehicles>6,000 lbs also to Fund 0006); $1.25 from personalized license plate fees; various fees. Department of Motor Vehicles Fund 0010 — $8 from certain specialty license plates for general distribution other specialty plates; $10 to $20 on some souvenir license plate fees; $1 fee dedicated to an automated registration and title system and other department purposes; assorted fees; $5 fee for cardboard tag. License Plate Trust Fund 0802 — Revenue, usually $22, from certain specialty license plates (previously deposited to Fund 0001). Texas Comptroller of Public Accounts – January 2019 146 Sources of Revenue MOTOR VEHICLE REGISTRATION FEES (concluded) Revenue Object 3014 NET COLLECTIONS (Amounts in Thousands) Revenue All Funds Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 165,392 179,666 193,546 198,685 214,441 231,835 257,164 231,701 274,465 285,244 284,134 277,603 300,434 477,529 561,821 623,877 625,988 627,385 634,736 644,724 581,710 589,532 607,420 604,985 624,245 640,458 679,040 708,830 Revenue Excludes Trust Percent Change $ 165,392 179,666 193,546 198,685 214,441 231,835 257,164 231,701 274,465 285,244 284,134 277,603 300,434 477,529 561,821 623,877 625,988 627,385 634,736 644,724 581,710 589,532 607,615 604,946 624,252 640,458 679,037 708,830 8.6 7.7 2.7 7.9 8.1 10.9 (9.9) 18.5 3.9 (0.4) (2.3) 8.2 58.9 17.7 11.0 0.3 0.2 1.2 1.6 (9.8) 1.3 3.1 (0.4) 3.2 2.6 6.0 4.4 Percent of Other Revenue 32.17 31.70 28.04 25.44 23.74 21.36 20.89 17.57 16.10 13.34 12.07 12.46 12.01 16.06 13.85 17.84 17.75 16.92 15.64 14.98 10.81 8.50 7.55 7.19 6.88 6.86 7.36 6.80 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 748,826 756,781 742,047 803,329 859,736 890,061 948,403 1,000,672 1,040,606 1,084,670 1,130,560 1,161,957 1,328,771 1,382,791 1,428,595 1,461,406 1,531,637 1,516,103 1,595,148 $ 748,826 756,781 742,047 803,329 859,736 890,061 948,403 1,000,672 1,040,606 1,084,670 1,130,560 1,161,957 1,328,771 1,382,791 1,426,198 1,459,223 1,529,275 1,513,871 1,593,037 5.6 1.1 (1.9) 8.3 7.0 3.5 6.6 5.5 4.0 4.2 4.2 2.8 14.4 4.1 3.1 2.3 4.8 (1.0) 5.2 Percent of Other Revenue 7.67 7.16 6.89 7.17 7.03 6.76 6.70 6.31 5.37 6.95 7.47 6.84 7.52 7.38 7.25 6.93 6.55 6.53 6.38 2,000,000 (Amounts in Thousands) 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Department of Transportation; Texas Department of Motor Vehicles Texas Comptroller of Public Accounts – January 2019 147 Sources of Revenue MOTOR VEHICLE RENTAL TAX Revenue Object 3005 RATE AND BASE State: 10% of gross receipts on rentals of 30 days or less; 6.25% on rentals of 31 to 180 days Local: Certain counties may impose a tax with a rate up to 6% Federal: None Major Exemptions: Rentals to governments; rentals for re-rental ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 1,356 Payment Cycle: Monthly or quarterly, with option to prepay Due Date: 20th day of the month for the preceding month or quarter; 15th day of the current month for monthly prepayers; 15th day of the second month of the quarter for quarterly prepayers Remitted By: Rental companies LEGAL CITATION(S) Texas Tax Code, §§ 152.026, 152.045, 152.084, 152.085 Texas Local Government Code, §§ 334.102 - 334.109, 335.071(e) ENACTED 62nd Legislature (1971) 4% of gross receipts RATE AND BASE CHANGES 68th Legislature (1984) 5% (eff. 8/1/84) 70th Legislature (1987) 6% (eff. 10/1/87) 72nd Legislature (1991) 10% for rentals up to 30 days; 6.25% for rentals of 31 to 180 days (eff. 9/1/91) ALLOCATION General Revenue Fund 0001 and/or certain Events Trust Funds — 100% Note: SJR 5, passed by the 84th Legislature and approved by voters on Nov. 3, 2015, directs 35% of the amount of total motor vehicle sales, rental and use tax revenue exceeding $5 billion annually to the State Highway Fund. This provision will begin in fiscal 2020, is in force through fiscal 2029, and may be extended by legislative action. Texas Comptroller of Public Accounts – January 2019 148 Sources of Revenue MOTOR VEHICLE RENTAL TAX (concluded) Revenue Object 3005 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 2,750 3,603 4,666 4,954 5,756 6,937 9,292 11,686 13,138 15,153 17,981 18,723 22,140 30,285 32,004 33,056 38,620 45,129 48,364 51,084 82,934 87,907 95,866 109,747 119,168 126,958 141,471 155,630 Revenue Excludes Trust $ 2,750 3,603 4,666 4,954 5,756 6,937 9,292 11,686 13,138 15,153 17,981 18,723 22,140 30,285 32,004 33,056 38,620 45,129 48,364 51,084 82,934 87,907 95,866 109,747 119,168 126,958 141,471 155,630 Percent Change 29.5 6.2 16.2 20.5 33.9 25.8 12.4 15.3 18.7 4.1 18.3 36.8 5.7 3.3 16.8 16.9 7.2 5.6 62.3 6.0 9.1 14.5 8.6 6.5 11.4 10.0 Percent of Taxes 0.12 0.14 0.15 0.15 0.15 0.16 0.18 0.22 0.21 0.20 0.21 0.22 0.24 0.28 0.31 0.32 0.31 0.35 0.35 0.34 0.52 0.52 0.53 0.58 0.60 0.60 0.63 0.66 1 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2015 2016 2017 2018 $ 166,090 176,526 159,622 149,118 151,466 171,142 195,771 205,172 208,969 193,677 178,760 200,656 221,104 237,816 258,020 279,865 286,328 286,550 307,218 $ 166,090 176,526 159,622 149,118 151,466 171,142 195,771 205,172 208,969 193,677 178,760 196,889 220,229 235,868 256,626 278,623 283,690 284,202 304,780 6.7 6.3 (9.6) (6.6) 1.6 13.0 14.4 4.8 1.9 (7.3) (7.7) 10.1 11.9 7.1 8.8 8.6 1.8 0.2 7.2 Percent of Taxes 0.66 0.65 0.61 0.57 0.54 0.57 0.58 0.56 0.51 0.51 0.51 0.51 0.50 0.49 0.50 0.54 0.59 0.57 0.55 Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed), and the Motor Sports and Racing Trust Fund started receiving certain taxes 300,000 (Amounts in Thousands) 240,000 180,000 120,000 60,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 149 Sources of Revenue MOTOR VEHICLE SALES AND USE TAX Revenue Object 3004 * RATE AND BASE State: 6.25% of sales price, less trade-in; $90 tax for a motor vehicle brought into state by new resident; $10 tax paid by donee per motor vehicle gifted; $5 tax paid by each party in an even exchange; 1 or 2.5% Texas Emissions Reduction Plan (TERP) surcharge on certain diesel truck purchases (TERP surcharge expires Aug. 31, 2019 Local: None; however, county tax assessor-collectors may retain 5% of the motor vehicle sales tax collected from the sale of motor vehicles in their county Federal: None Major Exemptions: Sales to governments; motor vehicle rental companies; vehicles modified to be driven by or to transport orthopedically handicapped persons; fire trucks/EMS vehicles; certain child-care facilities; driver training vehicles; vehicles used for religious purposes; trucks/trailers/semitrailers used interstate and subject to Interstate Registration Plan; farm machine/ trailer/semi-trailer used primarily for farm or timber use ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 254 Payment Cycle: Purchasers/dealers remit to the county tax assessor-collector within 30 calendar days of sale Due Date: County tax assessor-collectors remit: Daily — if previous year’s taxes remitted were $10 million or more Weekly — if previous year’s taxes remitted were $2 million or more but less than $10 million Monthly — if previous year’s taxes remitted were under $2 million Remitted By: County tax assessor-collectors LEGAL CITATION(S) Texas Tax Code, §§ 152.021 - 152.025, 152.027 - 152.028, 152.121 ENACTED 47th Legislature (1941) 1% RATE AND BASE CHANGES Numerous rate and base changes between 1941 and 1971 62nd Legislature (1971) 4 percent 67th Legislature (1981) Imposed a $15 use tax (in lieu of motor vehicle sales tax) on previously registered motor vehicles brought into the state by a new Texas resident 68th Legislature (1984) 5 percent (eff. 8/1/84) 70th Legislature (1987) 6 percent (eff. 10/1/87) 72nd Legislature (1991) 6.25% (eff. 9/1/91); 5% county commission no longer paid from General Revenue (eff. 1/1/92) 76th Legislature (1999) Increased new resident use tax to $90 on previously registered vehicles; broadened tax to include leased vehicles 77th Legislature (2001) For TERP added 2.5% surcharge on sale/lease/rental of diesel trucks model years <1997 (eff. 9/1/01) 78th Legislature (2003) Extended TERP adding 1% surcharge on sale/lease/use/rental of diesel trucks, model years >1996 (eff. 7/1/03); reversed source of 5% county commission from State Highway Fund to General Revenue over 10-year period at a rate of 10% annually starting fiscal 2006 79th Legislature (2005) Extended TERP diesel truck surcharges through fiscal 2010; exempted some recreational vehicles from 1% surcharge 80th Legislature (2007) Extended TERP 10% surcharge on purchase of diesel trucks through fiscal 2013; exempted certain hydrogen-powered vehicles 81st Legislature (2009) Extended TERP 10% surcharge on purchase of diesel trucks through fiscal 2019; restricted persons eligible to pay $10 gift tax in lieu of 6.25% tax on motor vehicle transfer between certain donor and donee relationships, and required a notary to attest to relationship 84th Legislature (2015) Purchases of vehicles operated with exempt license plates and used by a commercial transportation company to provide services to certain educational entities exempted from tax 85th Legislature (2017) Extended exemption for religious purposes to additional vehicles and uses; exempted purchases by open-enrollment charter schools ALLOCATION General Revenue Fund 0001 — Previously 100% then decreased over a 10-year period ending fiscal 2014; beginning fiscal 2015, the allocation became 95% to General Revenue and counties 5% Property Tax Relief Fund 0304 — Revenue estimated to have been derived from the tax based on a vehicle’s presumptive value Emissions Reduction Plan Account 5071 — 100% of applicable surcharge Note: SJR 5, passed by the 84th Legislature and approved by voters on Nov. 3, 2015, directs 35% of the amount of total motor vehicle sales, rental and use tax revenue exceeding $5 billion annually to the State Highway Fund. This provision will begin in state fiscal year 2020, is in force through fiscal 2029 and may be extended by Legislative action. Texas Comptroller of Public Accounts – January 2019 150 Sources of Revenue MOTOR VEHICLE SALES AND USE TAX (concluded) Revenue Object 3004 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 164,371 193,789 193,170 197,684 264,776 321,155 391,791 421,648 424,740 495,779 539,271 526,169 663,197 835,135 813,011 755,729 895,415 957,694 1,029,026 1,003,535 1,120,939 1,306,098 1,472,098 1,604,676 1,765,966 1,839,267 2,054,890 2,236,979 Percent Change 17.9 (0.3) 2.3 33.9 21.3 22.0 7.6 0.7 16.7 8.8 (2.4) 26.0 25.9 (2.6) (7.0) 18.5 7.0 7.4 (2.5) 11.7 16.5 12.7 9.0 10.1 4.2 11.7 8.9 Percent of Taxes 7.01 7.50 6.38 5.86 6.77 7.27 7.79 7.82 6.70 6.40 6.23 6.19 7.13 7.79 7.95 7.36 7.24 7.42 7.55 6.73 7.07 7.68 8.13 8.51 8.94 8.68 9.08 9.47 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † Total Revenue † $ 2,526,449 2,627,761 2,696,454 2,452,064 2,493,614 2,582,389 2,776,573 3,008,867 3,012,846 2,292,557 2,329,566 2,646,638 3,189,319 3,487,064 3,794,693 4,070,110 4,161,576 4,083,678 4,489,124 Percent Change Percent of Taxes 12.9 4.0 2.6 (9.1) 1.7 3.6 7.5 8.4 0.1 (23.9) 1.6 13.6 20.5 9.3 8.8 7.3 2.2 (1.9) 9.9 9.99 9.65 10.26 9.39 8.93 8.65 8.28 8.14 7.28 6.06 6.59 6.81 7.24 7.30 7.44 7.88 8.58 8.23 8.08 Revenue object code 3667 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust 5,000,000 (Amounts in Thousands) 4,000,000 3,000,000 2,000,000 1,000,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 151 Sources of Revenue MOTOR VEHICLE SALES AND USE TAX — SELLER-FINANCED MOTOR VEHICLES Revenue Object 3016 RATE AND BASE State: 6.25% of seller’s receipts; 1% or 2.5% Texas Emissions Reduction Plan (TERP) surcharge on certain diesel trucks Local: None; however, counties are entitled to 5% of the motor vehicle sales tax (seller-financed) collected on the sale of motor vehicles in their county Federal: None Major Exemptions: Sales to governments; motor vehicle rental companies; vehicles modified to be driven by or to transport orthopedically handicapped persons; fire trucks/EMS vehicles; vehicles transported out-of-state; certain child-care facilities; driver training vehicles; vehicles used for religious purposes; trucks/trailers/semitrailers used interstate and subject to Interstate Registration Plan; certain hydrogen-powered vehicles; farm machine/ trailer/semi-trailer used primarily for farm or timber use ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 3,773 Payment Cycle: Monthly or quarterly (may be prepaid) Due Date: Monthly: 20th day of the month for the preceding month; 15th day of the current month for prepayers Quarterly: 20th day of the month for the preceding quarter; 15th day of the second month of the current quarter for prepayers Remitted By: Sellers who finance motor vehicles LEGAL CITATION(S) Texas Tax Code, §§ 152.047 - 152.048 ENACTED 73rd Legislature (1993) 6.25% (eff. 10/1/93) RATE AND BASE CHANGES 77th Legislature (2001) For TERP, added 2.5% surcharge on sale/lease/rental of diesel trucks for model years <1997 (eff. 9/1/01) 78th Legislature (2003) Extended TERP by adding 1% surcharge on sale/lease/use/rental of diesel trucks for model years >1996 (eff. 7/1/03) 80th Legislature (2007) Extended TERP 10% surcharge on purchase of certain diesel trucks through fiscal 2013; exempted certain hydrogen-powered vehicles 81st Legislature (2009) Required motor vehicle sellers in seller-financed sales to apply for registrations and certificates of title with county tax assessor-collectors in the purchaser’s name no later than 45 days after vehicle delivery to the purchaser; extended TERP 10% surcharge on purchase of diesel trucks through fiscal 2019 84th Legislature (2015) Purchases of vehicles operated with exempt license plates and used by a commercial transportation company to provide services to certain educational entities exempted from tax 85th Legislature (2017) Extended exemption for religious purposes to additional vehicles and uses; exempted purchanses by openenrollment charter schools ALLOCATION General Revenue Fund 0001 — Previously 100%, then decreased over 10-year period ending fiscal 2014; beginning fiscal 2015 the allocation became 95% to General Revenue and counties 5% Texas Emissions Reduction Plan Account 5071 — 100% of applicable surcharge Note: SJR 5, passed by the 84th Legislature and approved by voters on Nov. 3, 2015, directs 35% of the amount of total motor vehicle sales, rental and use tax revenue exceeding $5 billion to the State Highway Fund. This provision will begin in state fiscal year 2020, is in force through fiscal 2029 and may be extended by legislative action. Texas Comptroller of Public Accounts – January 2019 152 Sources of Revenue MOTOR VEHICLE SALES AND USE TAX — SELLER-FINANCED MOTOR VEHICLES (concluded) Revenue Object 3016 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11,977 28,324 32,398 33,929 37,945 44,946 Percent Change Percent of Taxes 136.5 14.4 4.7 11.8 18.4 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.07 0.15 0.16 0.16 0.17 0.19 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † 1 Total Revenue † $ 55,168 79,198 73,199 79,069 82,423 82,642 89,437 99,038 105,583 103,919 111,902 124,757 136,886 140,984 141,205 146,493 152,472 144,432 153,498 Percent Change 22.7 43.6 (7.6) 8.0 4.2 0.3 8.2 10.7 6.6 (1.6) 7.7 11.5 9.7 3.0 0.2 3.7 4.1 (5.3) 6.3 Percent of Taxes 0.22 0.29 0.28 0.30 0.30 0.28 0.27 0.27 0.26 0.27 0.32 0.32 0.31 0.30 0.28 0.28 0.31 0.29 0.28 No revenue deposited to trust Before 1994, tax receipts for Seller-Financed Motor Vehicles were deposited under object code 3004 (Motor Vehicle Sales and Use tax) 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 153 Sources of Revenue NATURAL GAS PRODUCTION TAX Revenue Object 3291 * RATE AND BASE State: 7.5% of market value of natural (including casinghead) gas produced/saved in the state; condensate is taxed at oil production tax rate of 4.6% and is included in Natural Gas Production tax revenues Local: None Federal: None Major Exemptions: “High-cost” natural gas ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 3,237 Payment Cycle: Monthly (annually, if qualified) Due Date: 20th day of the second month succeeding production (for annual filers, February 20th for preceding year) Remitted By: Oil and natural gas producers and purchasers LEGAL CITATION(S) Texas Tax Code, §§ 201.051 - 201.055, 201.201 (the “Gas Production” tax) ENACTED 42nd Legislature (1931) 2% of value RATE AND BASE CHANGES 44th Legislature (1936) 3% of value 47th Legislature (1941) 5.2% of value 51st Legislature (1950) 5.72% of value until 8/31/51 (temporary) 52nd Legislature (1951) 5.72% of value after 9/1/51 (permanent) 53rd Legislature (1954) 9% of value until 1955, 8% until 1956 and 7% thereafter 61st Legislature (1969) 7.5% of value 71st Legislature (1989) Exemption for “high-cost” natural gas until 8/31/01 73rd Legislature (1993) Exemption for 3-year inactive wells, coproduction projects 74th Legislature (1995) Modification (rate reduction) and extension for “high-cost” natural gas 75th Legislature (1997) Exemption for 2-year inactive wells; exemption for flared/vented natural gas 76th Legislature (1999) Extension of modified “high-cost” natural gas program 78th Legislature (2003) Made “high-cost” natural gas program permanent 79th Legislature (2005) Credits for qualifying low-producing wells; credits for reactivated orphan wells 80th Legislature (2007) Made low-price exemption for low-producing wells permanent ALLOCATION GR Account - Foundation School 0193 — 25% General Revenue Fund 0001 — 75% Note: SJR 1, passed by the 83rd Legislature, Third Called Session, and approved by voters on Nov. 4, 2014, provided that up to one-half of the revenue associated with crude oil and natural gas production taxes that had been subject to transfer from GR to the Economic Stabilization (Rainy Day) Fund each year would henceforth be directed from GR to the State Highway Fund; the remainder would continue to be transferred from GR to the Rainy Day Fund. Texas Comptroller of Public Accounts – January 2019 154 Sources of Revenue NATURAL GAS PRODUCTION TAX (concluded) Revenue Object 3291 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 114,380 124,902 171,068 259,570 364,588 474,318 517,844 554,354 734,247 901,931 1,057,057 1,061,227 1,095,485 1,122,848 778,703 644,862 555,647 666,496 568,131 662,599 497,129 682,926 554,484 512,411 447,102 712,223 574,584 488,583 Percent Change Percent of Taxes 9.2 37.0 51.7 40.5 30.1 9.2 7.1 32.5 22.8 17.2 0.4 3.2 2.5 (30.6) (17.2) (13.8) 19.9 (14.8) 16.6 (25.0) 37.4 (18.8) (7.6) (12.7) 59.3 (19.3) (15.0) 4.88 4.83 5.65 7.69 9.32 10.73 10.29 10.28 11.57 11.65 12.22 12.49 11.77 10.47 7.61 6.28 4.49 5.16 4.17 4.44 3.14 4.01 3.06 2.72 2.26 3.36 2.54 2.07 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † Total Revenue † $ 697,666 1,596,886 628,497 1,069,864 1,392,436 1,657,086 2,339,147 1,895,488 2,684,648 1,407,739 725,538 1,109,718 1,534,630 1,495,203 1,899,582 1,280,410 578,799 982,763 1,431,106 Percent Change Percent of Taxes 42.8 128.9 (60.6) 70.2 30.2 19.0 41.2 (19.0) 41.6 (47.6) (48.5) 53.0 38.3 (2.6) 27.0 (32.6) (54.8) 69.8 45.6 2.76 5.86 2.39 4.09 4.99 5.55 6.97 5.13 6.49 3.72 2.05 2.86 3.48 3.13 3.73 2.48 1.19 1.98 2.57 Revenue object code 3656 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust 3,000,000 (Amounts in Thousands) 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 155 Sources of Revenue OIL PRODUCTION TAX Revenue Object 3290 * RATE AND BASE State: 4.6% of the market value of oil produced in the state Local: None Federal: None Major Exemptions: Production from approved enhanced oil recovery (EOR) projects; production from EOR projects using anthropogenic carbon dioxide; production from wells previously inactive ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 8,978 Payment Cycle: Monthly Due Date: 25th day of the month for the preceding month’s production Remitted By: Oil producers and purchasers LEGAL CITATION(S) Texas Tax Code, § 202.051, 202.052, 202.151 ENACTED 29th Legislature (1905) 1% of value RATE AND BASE CHANGES 30th Legislature (1907) 0.5% of value 36th Legislature (1919) 1.5% of value 38th Legislature (1923) 2% of value 43rd Legislature (1933) $0.02 per barrel or 2% of value 44th Legislature (1936) $0.0275 per barrel 47th Legislature (1941) $0.04125 per barrel 51st Legislature (1950) 4.5375% of value (temporary) 52nd Legislature (1951) 4.6% of value 71st Legislature (1989) Reduced rate to 2.3% of value on EOR projects 73rd Legislature (1993) Exemption for 3-year inactive wells 75th Legislature (1997) Exemption for 2-year inactive wells 76th Legislature (1999) Low-price exemption for low-yield wells (temporary) 79th Legislature (2005) Low-price exemption for low-producing wells; exemption for orphan wells; tax credit on marginal oil wells with enhanced efficiency equipment installed 80th Legislature (2007) Made low-price exemption for low-producing wells permanent 80th Legislature (2007) Tax credit for enhanced efficiency equipment (extension) 80th Legislature (2007) Tax exemption for EOR projects using anthropogenic CO2 81st Legislature (2009) Extended time limit on tax exemption for EOR projects using anthropogenic CO2 from 7 to 30 years ALLOCATION GR Account - Foundation School 0193 — 25% General Revenue Fund 0001 — 75% Note: SJR 1, passed by the 83rd Legislature, Third Called Session, and approved by voters on Nov. 4, 2014, provided that up to one-half of the revenue associated with crude oil and natural gas production taxes that had been subject to transfer from GR to the Economic Stabilization (Rainy Day) Fund each year would henceforth be directed from GR to the State Highway Fund; the remainder would continue to be transferred from GR to the rainy day fund. Texas Comptroller of Public Accounts – January 2019 156 Sources of Revenue OIL PRODUCTION TAX (concluded) Revenue Object 3290 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 190,785 207,522 344,832 402,553 429,105 426,373 435,223 464,820 783,772 1,288,669 1,315,131 1,188,483 1,118,635 1,038,534 767,558 531,872 498,624 500,205 514,966 687,770 511,526 491,256 360,683 374,209 375,958 428,140 302,899 210,023 Percent Change Percent of Taxes 8.8 66.2 16.7 6.6 (0.6) 2.1 6.8 68.6 64.4 2.1 (9.6) (5.9) (7.2) (26.1) (30.7) (6.3) 0.3 3.0 33.6 (25.6) (4.0) (26.6) 3.7 0.5 13.9 (29.3) (30.7) 8.14 8.03 11.40 11.93 10.96 9.65 8.65 8.62 12.35 16.65 15.20 13.99 12.02 9.69 7.50 5.18 4.03 3.88 3.78 4.61 3.23 2.89 1.99 1.98 1.90 2.02 1.34 0.89 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † Total Revenue † $ 415,800 441,922 337,857 422,879 495,443 681,294 861,659 834,374 1,436,243 883,774 1,008,074 1,472,111 2,102,389 2,989,542 3,872,279 2,877,020 1,703,903 2,107,333 3,391,514 Percent Change Percent of Taxes 98.0 6.3 (23.5) 25.2 17.2 37.5 26.5 (3.2) 72.1 (38.5) 14.1 46.0 42.8 42.2 29.5 (25.7) (40.8) 23.7 60.9 1.64 1.62 1.29 1.62 1.77 2.28 2.57 2.26 3.47 2.34 2.85 3.79 4.77 6.26 7.59 5.57 3.51 4.24 6.10 Revenue object code 3662 (relating to funds remitted under protest was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust 4,000,000 3,500,000 (Amounts in Thousands) 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 157 Sources of Revenue OIL WELL SERVICE TAX Revenue Object 3296 RATE AND BASE State: 2.42% of the gross amount received for specific services to oil and natural gas wells Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 178 Payment Cycle: Monthly Due Date: 20th day of the month for the preceding month Remitted By: Oil and natural gas well servicers LEGAL CITATION(S) Texas Tax Code, § 191.082, 191.083 ENACTED 47th Legislature (1941) 2.2% of the value of taxable services RATE AND BASE CHANGES 52nd Legislature (1951) 2.42% of gross receipts ALLOCATION GR Account - Foundation School 0193 — 25% General Revenue Fund 0001 — 75% Texas Comptroller of Public Accounts – January 2019 158 Sources of Revenue OIL WELL SERVICE TAX (concluded) Revenue Object 3296 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 963 1,073 1,426 2,026 2,718 3,736 4,595 5,152 7,930 11,717 14,372 9,601 11,018 10,341 6,404 3,018 4,281 3,272 4,550 5,285 3,936 4,820 4,842 4,976 5,285 7,073 8,480 4,515 Revenue Excludes Trust Percent Change $ 963 1,073 1,426 2,026 2,718 3,736 4,595 5,152 7,930 11,717 14,372 9,601 11,018 10,341 6,404 3,018 4,281 3,272 4,550 5,285 3,936 4,820 4,842 4,976 5,285 7,073 8,480 4,515 11.4 32.9 42.0 34.2 37.5 23.0 12.1 53.9 47.8 22.7 (33.2) 14.8 (6.1) (38.1) (52.9) 41.9 (23.6) 39.1 16.2 (25.5) 22.5 0.5 2.8 6.2 33.8 19.9 (46.8) Percent of Taxes 0.04 0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.13 0.15 0.17 0.11 0.12 0.10 0.06 0.03 0.03 0.03 0.03 0.04 0.02 0.03 0.03 0.03 0.03 0.03 0.04 0.02 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 7,359 12,156 13,196 11,899 14,627 22,199 34,591 43,564 49,749 36,114 26,650 79,381 122,149 112,698 129,604 127,793 58,351 79,460 186,005 Revenue Excludes Trust Percent Change $ 7,359 12,156 13,196 11,899 14,627 22,199 34,591 43,564 49,749 36,114 26,650 79,381 122,149 112,698 129,604 127,793 58,351 79,460 186,005 63.0 65.2 8.6 (9.8) 22.9 51.8 55.8 25.9 14.2 (27.4) (26.2) 197.9 53.9 (7.7) 15.0 (1.4) (54.3) 36.2 134.1 Percent of Taxes 0.03 0.04 0.05 0.05 0.05 0.07 0.10 0.12 0.12 0.10 0.08 0.20 0.28 0.24 0.25 0.25 0.12 0.16 0.33 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 159 Sources of Revenue PROFESSIONAL FEES Revenue Object 3175 RATE AND BASE State: Varies by agency and profession Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: See Appendix E No. of Fees Collected: 2.5 million Payment Cycle: Annual renewals (some biennial or multi-year renewals) Due Date: May be staggered Remitted by: Organizations / agencies governing fee-paying licensees LEGAL CITATION(S) See Appendix E ENACTED See Appendix E RATE AND BASE CHANGES 70th Legislature (1987) $110 temporary fee increase on selected professions 72nd Legislature (1991) $200 fee increase on selected professions 77th Legislature (2001) Removed fees collected by State Board of Public Accountancy, Board of Architectural Examiners and Board of Professional Engineers from General Revenue to be deposited to Texas Treasury Safekeeping Trust Company 78th Legislature (2003) $200 fee increase on selected professions 81st Legislature (2009) Removed fees collected by Department of Savings and Mortgage Lending, Department of Banking, Credit Union Department and Office of Consumer Credit Commissioner from General Revenue to be deposited to Texas Treasury Safekeeping Trust Company 82nd Legislature (2011) Removed fees collected by the Real Estate Commission from General Revenue to be deposited to Texas Treasury Safekeeping Trust Company 84th Legislature (2015) Repealed $200 fee increases on selected professions 85th Legislature (2017) Repealed fees, including: barber inspection, court reporters (renewal), agriculture/wild life control (permit) ALLOCATION General Revenue Fund 0001, various dedicated accounts, trust fund in the state treasury, on account with the Texas Safekeeping Trust Company, or retained at the local level Texas Comptroller of Public Accounts – January 2019 160 Sources of Revenue PROFESSIONAL FEES (concluded) Revenue Object 3175 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1 1989 1990 1991 1992 1993 1994 1995 1996 2 1997 1998 1999 $ 1,684 1,752 2,305 1,918 4,380 4,932 5,130 10,977 13,055 16,544 21,498 24,632 31,224 33,268 43,218 52,011 72,164 70,100 50,278 49,683 114,941 125,984 136,084 128,776 148,897 162,438 173,691 181,881 Revenue Excludes Trust Percent Change $ 1,684 1,752 2,305 1,918 4,380 4,932 5,130 10,977 13,055 16,544 21,498 24,632 31,224 33,268 43,218 52,011 72,164 70,100 50,278 49,683 114,704 125,744 136,048 128,743 148,762 162,301 173,485 181,660 4.0 31.6 (16.8) 128.3 12.6 4.0 114.0 18.9 26.7 29.9 14.6 26.8 6.5 29.9 20.3 38.7 (2.9) (28.3) (1.2) 130.9 9.6 8.2 (5.4) 15.5 9.1 6.9 4.7 Percent of Other Revenue 0.33 0.31 0.33 0.25 0.48 0.45 0.42 0.83 0.77 0.77 0.91 1.11 1.25 1.12 1.07 1.49 2.05 1.89 1.24 1.15 2.13 1.81 1.69 1.53 1.64 1.74 1.88 1.74 1 2 3 Year Revenue All Funds Revenue Excludes Trust Percent Change 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3 2014 2015 2016 2017 2018 $ 216,458 200,777 187,863 195,997 248,437 235,484 272,614 287,805 314,482 288,401 315,763 300,013 272,797 176,130 178,157 185,900 96,298 94,536 95,058 $ 216,154 200,295 175,952 181,302 235,391 221,084 256,016 271,336 297,479 274,093 300,738 289,335 263,100 176,286 177,868 185,741 96,246 94,475 94,929 19.0 (7.3) (12.2) 3.0 29.8 (6.1) 15.8 6.0 9.6 (7.9) 9.7 (3.8) (9.1) (33.0) 0.9 4.4 (48.2) (1.8) 0.5 Percent of Other Revenue 2.21 1.89 1.63 1.62 1.93 1.68 1.81 1.71 1.53 1.76 1.99 1.70 1.49 0.94 0.90 0.88 0.41 0.41 0.38 Revenue Object codes 3181-3187 were used from 1988-1993 and have since expired. Before fiscal 1996, Revenue Object code 3171 was used for Gross Receipts Permit fees and not used in calculating the net collections for this revenue source. Beginning in 1996, object code 3171 used for $200 increase in certain professional fees per HB 11, 72nd Legislature, 1st Called Session; $200 increase repealed by the 84th Legislature (2015). Revenue Object code 3171 inactive at time of writing due to repeal. Securities fees were removed and deposited to object code 3186 beginning in 2013. 350,000 (Amounts in Thousands) 300,000 250,000 200,000 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 161 Sources of Revenue PUBLIC UTILITY GROSS RECEIPTS ASSESSMENT Revenue Object 3230 * RATE AND BASE State: 1/6 of 1% of gross receipts Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Comptroller Of Public Accounts Number of Taxpayers: 513 Payment Cycle: Annually (may be paid quarterly) Due Date: Aug. 15 for previous July 1 - June 30 period (15th of August, November, February, and May for previous quarter if quarterly filer) Remitted By: Each public utility, retail electric provider and electric cooperative under jurisdiction of Public Utility Commission of Texas, including interchange telecommunications carriers LEGAL CITATION(S) Texas Utilities Code, §§ 16.001 - 16.004 ENACTED 64th Legislature (1975) One-sixth of 1% of gross receipts (first due 8/31/76) RATE AND BASE CHANGES 76th Legislature (1999) To the entities to which the assessment is applied, added retail electric providers and electric cooperatives (eff. 9/1/99) ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 162 Sources of Revenue PUBLIC UTILITY GROSS RECEIPTS ASSESSMENT (concluded) Revenue Object 3230 * NET COLLECTIONS (Amounts in Thousands) Total Revenue † Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1 1993 1 1994 2 1995 1996 1 1997 1 1998 1,2 1999 1 $ 0 0 0 0 0 9,547 10,587 11,369 8,245 16,612 20,433 36,390 27,509 25,859 27,810 24,660 25,321 25,966 27,157 29,262 16,203 40,375 51,596 34,413 23,697 46,422 16,311 41,423 Percent Change Percent of Taxes 10.9 7.4 (27.5) 101.5 23.0 78.1 (24.4) (6.0) 7.5 (11.3) 2.7 2.5 4.6 7.8 (44.6) 149.2 27.8 (33.3) (31.1) 95.9 (64.9) 154.0 0.00 0.00 0.00 0.00 0.00 0.22 0.21 0.21 0.13 0.21 0.24 0.43 0.30 0.24 0.27 0.24 0.20 0.20 0.20 0.20 0.10 0.24 0.28 0.18 0.12 0.22 0.07 0.18 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * † 1 2 Total Revenue † $ 38,234 48,597 43,791 41,346 41,557 49,231 57,566 59,490 57,560 64,025 59,682 50,107 53,868 55,498 48,385 55,254 56,419 51,175 55,947 Percent Change Percent of Taxes (7.7) 27.1 (9.9) (5.6) 0.5 18.5 16.9 3.3 (3.2) 11.2 (6.8) (16.0) 7.5 3.0 (12.8) 14.2 2.1 (9.3) 9.3 0.15 0.18 0.17 0.16 0.15 0.16 0.17 0.16 0.14 0.17 0.17 0.13 0.12 0.12 0.09 0.11 0.12 0.10 0.10 Revenue object code 3669 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections No revenue deposited to trust Adjustment for deposit posting errors: $11.8 million in 1992-93; $10.1 million in 1996-97 (see Gas, Electric & Water Utility tax); and $3.5 million in 1998-99 Fiscal 1994 includes $17.4 million in speed-up; fiscal 1998 reflects $19.8 million associated with expiration of speed-up 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 163 Sources of Revenue SALES AND USE TAX Revenue Objects 3010, 3100 - 3103, and 3105 RATE AND BASE State: 6.25% of the retail sale price of taxable tangible personal property and selected services; 1.5% Texas Emissions Reduction Plan (TERP) surcharge on certain off-road equipment (TERP surcharge expires Aug. 31, 2019) Local: Cities, MTAs, counties and other local taxing jurisdictions may levy local sales taxes subject to the restriction that the total local rate cannot exceed 2% Federal: None Major Exemptions: Sales for resale, items taxed by other law, sales to governments, sales to certain charitable organizations, food for home consumption, certain health care items, residential and manufacturing gas and electricity, many items used in agriculture, raw materials used in manufacturing, three-day clothing holiday ADMINISTRATION Agency: Comptroller of Public Accounts Number of Taxpayers: 676,149 Payment Cycle: Monthly, quarterly and annually; option to prepay for monthly and quarterly filers Due Date: Monthly: 20th day of the month for the preceding month; 15th day of the current month for prepayers Quarterly: 20th day of the month for the preceding quarter; 15th day of the second month of the current quarter for prepayers Remitted By: Sellers and users of taxable items LEGAL CITATION(S) Texas Tax Code, §§ 151.051, 151.0515, 151.101, 151.401, 151.801 (“the Limited Sales, Excise and Use” tax) Texas Tax Code, §§ 321.103, 321.104 (cities) Texas Tax Code, §§ 322.101, 322.102 (certain transit authorities) Texas Tax Code, §§ 323.103, 323.104, 323.105 (counties and crime control districts) Texas Tax Code, §§ 324.021, 324.022 (county health services) Texas Tax Code, §§ 325.021, 325.022 (county landfills and criminal detention centers) Texas Tax Code, §§ 327.003, 327.004 (municipal street maintenance) ENACTED 57th Legislature (1961) 2% (eff. 9/1/61) RATE AND BASE CHANGES See Appendix C for base changes 60th Legislature (1968) 3% (eff. 10/2/68) 61st Legislature (1969) 3.25% (eff. 10/1/69) 62nd Legislature (1971) 4% (eff. 7/1/71) 68th Legislature (1984) 4.125% (eff. 10/2/84) 69th Legislature (1986) 5.25% (eff. 1/1/87 - temporary) 70th Legislature (1987) 6% (eff. 10/1/87) 71st Legislature (1990) 6.25% (eff. 7/1/90) 77th Legislature (2001) Additional 2% sales tax on fireworks (eff. 10/31/01); 1% surcharge (TERP) on certain off-road equipment 78th Legislature (2003) 1% surcharge (for TERP program) on certain off-road equipment increased to 2% 84th Legislature (2015) Repealed 2% sales tax on fireworks (eff. 9/01/15); 2% TERP surcharge decreased to 1.5% ALLOCATION State Highway Fund 0006 — Sales tax collections (est) on motor lubricants Sales tax collections (est) on certain sporting goods sales: 6% for the Texas Historical Commission 94% for the Parks and Wildlife Department GR Account - Rural Volunteer Fire Department Insurance 5066 — estimated revenue corresponding to a 2% tax on the retail sale of fireworks GR Account - Texas Emissions Reduction Plan 5071 — 1.5% diesel equipment surcharge General Revenue Fund 0001 and/or certain Events Trust Funds — remainder of revenue Note: SJR 5, passed by the 84th Legislature and approved by voters on Nov. 3, 2015, directs the net annual revenue derived from items taxable under Chapter 151, Tax Code (the state sales tax) following the first $28 billion in collections and up to $2.5 billion yearly be transferred to the State Highway Fund. This provision took effect in fiscal 2018, will remain in force through fiscal 2032, and may be extended by Legislative action. Note: Though sales tax on sporting goods is allocated 94%/6%, actual amounts to the entities depends on the General Appropriations Act. Texas Comptroller of Public Accounts – January 2019 164 Sources of Revenue SALES AND USE TAX (concluded) Revenue Objects 3010, 3100 - 3103, and 3105 NET COLLECTIONS (Amounts in Thousands) Revenue Excludes Trust Percent Change Percent of Taxes $ 824,024 $ 824,024 926,211 926,211 1,126,239 1,126,239 1,266,637 1,266,637 1,478,372 1,478,372 1,689,043 1,689,043 2,023,721 2,023,721 2,174,266 2,174,266 2,521,374 2,521,374 2,982,858 2,982,858 3,461,092 3,461,092 3,304,614 3,304,614 3,784,765 3,784,765 4,191,844 4,191,844 4,329,871 4,329,872 4,616,533 4,616,533 6,242,907 6,242,907 6,914,695 6,914,695 7,589,434 7,589,434 8,255,678 8,255,678 8,534,512 8,534,512 9,096,928 9,096,926 9,780,352 9,780,352 10,222,684 10,222,685 10,755,593 10,755,593 11,303,449 11,303,446 12,417,754 12,417,759 13,027,213 13,027,218 12.4 21.6 12.5 16.7 14.3 19.8 7.4 16.0 18.3 16.0 (4.5) 14.5 10.8 3.3 6.6 35.2 10.8 9.8 8.8 3.4 6.6 7.5 4.5 5.2 5.1 9.9 4.9 35.15 35.85 37.22 37.53 37.77 38.21 40.21 40.34 39.75 38.53 40.01 38.89 40.67 39.10 42.32 44.97 50.49 53.58 55.67 55.33 53.85 53.48 54.02 54.21 54.42 53.35 54.86 55.17 Revenue All Funds Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1 1997 1998 1999 Revenue Excludes Trust Percent Change Percent of Taxes $ 13,930,223 $ 13,930,219 14,620,930 14,620,929 14,476,616 14,476,616 14,234,160 14,234,160 15,368,233 15,368,233 16,258,035 16,258,035 18,218,356 18,218,356 20,208,699 20,208,699 21,541,624 21,541,624 20,965,737 20,965,737 19,584,153 19,584,153 21,476,612 21,431,610 24,158,680 24,141,892 25,932,245 25,890,298 27,363,711 27,328,968 28,883,117 28,850,614 28,221,989 28,179,244 28,875,108 28,829,670 31,905,371 31,860,963 6.9 5.0 (1.0) (1.7) 8.0 5.8 12.1 10.9 6.6 (2.7) (6.6) 9.4 12.6 7.2 5.6 5.6 (2.3) 2.3 10.5 55.10 53.69 55.09 54.48 55.06 54.49 54.31 54.68 52.09 55.43 55.37 55.16 54.77 54.19 53.59 55.82 58.13 58.07 57.32 Revenue All Funds Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2 2012 2013 2014 2015 2016 3 2017 2018 * 1 2 3 Revenue object code 3658 (relating to funds remitted under protest) was available through fiscal 2004 for use with this revenue source in calculating net collections. Effective fiscal 1996, revenue object code 3798 (relating to tax refunds for economic development, reinvestment zone/abatement agreements) is used with this revenue source in calculating net collections. Repealed for refunds claimed after Oct. 1, 2011. Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed) and the Motor Sports and Racing Trust Fund started receiving certain taxes Revenue object code 3127, previously reported in the Sales and Use Tax profile, was for the Fireworks Tax, effective with fiscal 2002 at a 2% rate; the tax was repealed by the 84th Legislature (2015) beginning fiscal 2016. 35,000,000 (Amounts in Thousands) 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 165 Sources of Revenue SECURITIES FEES Revenue Object 3186 RATE AND BASE State: 1/10 of 1% of the aggregate amount of securities proposed to be sold and based on the price at which securities are to be offered. $10,000 fee for filing an application for approval to exempt a stock exchange. $500 fee for filing initial notice or renewal to claim a secondary trading exemption Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: State Securities Board No. of Fees Collected: 64,230 Payment Cycle: N/A Due Date: At time of application; renewals vary by type of security Remitted by: Dealers and investment advisors LEGAL CITATION(S) TEX. REV. CIV. STAT. ANN. art. 581-35 ENACTED 44th Legislature (1935) RATE AND BASE CHANGES ALLOCATION General Revenue Fund 0001 — 100% Texas Comptroller of Public Accounts – January 2019 166 Sources of Revenue SECURITIES FEES (concluded) Revenue Object 3186 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † Percent Change $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1 2014 2015 2016 2017 2018 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 113,508 115,301 142,211 129,465 149,233 148,102 Percent Change 1.6 23.3 (9.0) 15.3 (0.8) Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.61 0.59 0.68 0.55 0.64 0.59 † No revenue deposited to trust 1 Prior to 2013, Securities fees were collected under object code 3175 150,000 (Amounts in Thousands) 120,000 90,000 60,000 30,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 167 Sources of Revenue SPECIAL VEHICLE PERMITS Revenue Object 3018 RATE AND BASE State: Fee amounts vary depending on type of permit. Excess weight fee is a $90 base fee plus additional amounts based on number of counties traveled. Fines for weight over vehicle allowable weight. Oversize/overweight vehicle permits from $60 for single trip to $270-$960 for annual permit. Other permits for oversize portable buildings and mobile homes, hay and timber transports, oil well equipment and other oversize vehicles Local: Varies by type of vehicle and number of counties entered Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Department of Motor Vehicles (DMV) No. of Fees Collected: 701,715 Payment Cycle: N/A Due Date: Annually, when permit is issued, or as determined by DMV Remitted by: County tax assessor-collectors, DMV and various government entities LEGAL CITATION(S) Texas Transportation Code § 342.004, 621.353, 621.354, 621.506, 621.507, 622.051, 623.011, 623.0111, 623.0112, 623.017, 623.0171, 623.0172, 623.019, 623.095(c), 623.096, 623.121, 623.124, 623.145, 623.147, 623.181, 623.182, 623.197, 623.322, 623.401, 623.402, 623.404 ENACTED Various dates depending on the fee or permit beginning with the 41st Leg. (1929) RATE AND BASE CHANGES 53rd Legislature (1953) Set rates for excess weight vehicles 55th Legislature (1957) Set rates for transporting manufactured homes 56th Legislature (1959) Set rates for transporting over length poles 58th Legislature (1963) Set rates for transporting oil well servicing 63rd Legislature (1973) Set rates for transporting unladen lift equipment 67th Legislature (1981) Set rates for transporting portable buildings 68th Legislature (1983) Various permit fees increased 71st Legislature (1989) Various permit fees increased 72nd Legislature (1991) Set highway maintenance fee; set rates for cotton vehicles and hay transporters 74th Legislature (1995) Amended rates for manufactured homes 75th Legislature (1997) Added additional highway maintenance fee and fee for super-heavy vehicles 77th Legislature (2001) Added $500 fine for moving a manufactured home without a permit on certain roads 78th Legislature (2003) Increased fine for moving manufactured home without permit on certain roads to $1,000; authorized a voluntary fee for priority boarding on the Galveston-Port Bolivar ferry 79th Legislature (2005) Added chile pepper modules to products eligible for transport on cotton vehicle plated vehicles 80th Legislature (2007) Increased fees for excess weight, oversize/overweight, portable buildings, mobile homes, lift equipment 82nd Legislature (2011) Increased excess weight base fee from $75 to $90 83rd Legislature (2013) Added $1,500 timber transporting fee and $1,000 ready-mix concrete truck fee 84th Legislature (2015) Department Motor Vehicles Fund 0010 recreated effective 9/1/2015; certain deposits that had been made to General Revenue deposited to new Fund 0010 beginning 9/1/2016. Added $960 oversize/overweight fee. 85th Legislature (2017) Added $1,200 permit for transport of fluid milk and $6,000 permit for transport of intermodal shipping containers ALLOCATION General Revenue Fund 0001 State Highway Fund 0006 Department Motor Vehicles Fund 0010 (beginning 9/1/2016) Texas Comptroller of Public Accounts – January 2019 168 Sources of Revenue SPECIAL VEHICLE PERMITS (concluded) Revenue Object 3018 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 2,159 2,190 2,105 2,068 2,178 2,329 2,574 2,813 3,117 3,489 3,984 3,586 9,689 9,610 9,427 7,938 8,662 8,408 9,286 12,336 17,234 18,600 17,991 20,626 22,143 19,142 39,806 28,253 Percent Change Percent of Other Revenue 1.4 (3.9) (1.8) 5.3 7.0 10.5 9.3 10.8 11.9 14.2 (10.0) 170.2 (0.8) (1.9) (15.8) 9.1 (2.9) 10.4 32.9 39.7 7.9 (3.3) 14.6 7.4 (13.6) 108.0 (29.0) 0.42 0.39 0.31 0.26 0.24 0.21 0.21 0.21 0.18 0.16 0.17 0.16 0.39 0.32 0.23 0.23 0.25 0.23 0.23 0.29 0.32 0.27 0.22 0.25 0.24 0.21 0.43 0.27 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 30,884 34,854 32,692 31,598 34,374 39,557 44,951 52,902 90,748 104,161 92,356 117,437 145,644 166,955 190,214 189,660 159,091 166,648 191,855 Percent Change Percent of Other Revenue 9.3 12.9 (6.2) (3.3) 8.8 15.1 13.6 17.7 71.5 14.8 (11.3) 27.2 24.0 14.6 13.9 (0.3) (16.1) 4.8 15.1 0.32 0.33 0.30 0.28 0.28 0.30 0.32 0.33 0.47 0.67 0.61 0.69 0.82 0.89 0.97 0.90 0.68 0.72 0.77 † No revenue deposited to trust 200,000 (Amounts in Thousands) 150,000 100,000 50,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Department of Motor Vehicles; Texas Department of Transportation Texas Comptroller of Public Accounts – January 2019 169 Sources of Revenue STATE PARKS FEES Revenue Object 3461 RATE AND BASE State: Daily entrance fees vary by park and historic site. Children 12 or younger generally free. An annual Texas State Park Pass, in lieu of daily entrace fees, is available for $70 and gives unlimited access Local: None Federal: None Major Exemptions: Under the age of 13, age 65 and over, and disabled individuals ADMINISTRATION Agency: Texas Parks and Wildlife Department (TPWD) and Historical Commission (THC) No. of Visitors: 8.2 million (Total visitors, paid and upaid, 91 Texas state parks, fiscal year 2017)* Payment Cycle: N/A Due Date: When entering park Remitted by: Park visitors *Source: Legislative Budget Board LEGAL CITATION(S) Texas Parks and Wildlife Code, §§ 11.053, 13.015 - 13.0155, 13.017 - 13.0191, 21.105 - 21.111(a), 22.022, 22.261, 43.521 Government Code § 442.0051 ENACTED 60th Legislature (1967) Directed TPWD to charge and collect entrance fees at parks RATE AND BASE CHANGES NOTE: Rates are set by TPWD and THC and may be modified annually 66th Legislature (1979) Established reservation fees for campsites 72nd Legislature (1991) Established annual Texas Conservation Permits (TCPs) 74th Legislature (1995) Amended the permit fee for TCPs 85th Legislature (2017) Changed Admiral Nimitz Museum entrance fee revenue deposit from General Revenue to National Museum of the Pacific War Museum Fund (1015), outside state treasury ALLOCATION Entrance and campsite fees (Excludes wildlife refuges): Texas Park Development Bonds Interest & Sinking Fund 0409 — Certain park fees to cover principle/interest during the life of the bonds GR Account – State Parks 0064 — Remainder Wildlife refuge entrance fees: GR Account – Non-Game and Endangered Species Conservation 0506 — 100% Conservation permits, historic sites General Revenue Fund 0001 — 100% Admiral Nimitz Museum entrance fee: National Museum of the Pacific War Museum Fund 1015 — 100% Texas Comptroller of Public Accounts – January 2019 170 Sources of Revenue STATE PARKS FEES (concluded) Revenue Object 3461 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 1,787 1,722 2,147 1,689 2,492 4,160 3,145 4,559 4,096 4,683 6,674 6,300 6,730 7,915 8,701 8,556 8,175 8,637 8,682 8,161 13,187 15,340 20,578 19,825 21,418 23,152 24,516 26,249 Revenue Excludes Trust Percent Change $ 1,787 1,722 2,147 1,689 2,492 4,160 3,145 4,559 4,096 4,683 6,674 6,300 6,730 7,915 8,701 8,556 8,175 8,637 8,682 8,161 13,187 15,340 20,571 19,514 17,225 18,881 24,361 26,212 (3.7) 24.7 (21.3) 47.6 66.9 (24.4) 44.9 (10.2) 14.3 42.5 (5.6) 6.8 17.6 9.9 (1.7) (4.5) 5.7 0.5 (6.0) 61.6 16.3 34.1 (5.1) (11.7) 9.6 29.0 7.6 Percent of Other Revenue 0.35 0.30 0.31 0.22 0.28 0.38 0.26 0.35 0.24 0.22 0.28 0.28 0.27 0.27 0.21 0.24 0.23 0.23 0.21 0.19 0.25 0.22 0.26 0.23 0.19 0.20 0.26 0.25 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ 27,721 26,743 27,809 28,831 30,449 32,060 33,391 35,334 37,856 38,813 38,839 38,709 41,655 46,306 46,876 48,307 52,978 57,680 50,595 Revenue Excludes Trust Percent Change $ 27,701 26,731 27,791 28,818 30,437 32,050 33,381 35,326 37,845 38,813 38,839 38,709 41,655 46,306 46,876 48,307 52,978 57,680 50,595 5.7 (3.5) 4.0 3.7 5.6 5.3 4.2 5.8 7.1 2.6 0.1 (0.3) 7.6 11.2 1.2 3.1 9.7 8.9 (12.3) Percent of Other Revenue 0.28 0.25 0.26 0.26 0.25 0.24 0.24 0.22 0.20 0.25 0.26 0.23 0.24 0.25 0.24 0.23 0.23 0.25 0.20 60,000 (Amounts in Thousands) 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Source(s): Texas Comptroller of Public Accounts; Texas Parks and Wildlife Department Revenue All Funds Revenue Excludes Trust Texas Comptroller of Public Accounts – January 2019 171 Sources of Revenue TEACHER CERTIFICATION FEES Revenue Object 3511 RATE AND BASE State: $75 for a standard teaching certificate; other associated fees Local: None Federal: None Major Exemptions: Educators holding a lifetime educator certification ADMINISTRATION Agency: Texas Education Agency (701) for the State Board for Educator Certification (705) No. of Fees Collected: * Payment Cycle: Standard teaching certificate renewed every five years Due Date: At time of exam and upon application for certificate before teaching school in Texas Remitted by: Educators, educator preparation programs and school districts * Data from the Texas Education Agency indicate there were 359,328 regular and substitute classroom teachers employed during the 2016-17 school year; required renewal of certification is not annual. LEGAL CITATION(S) Texas Education Code, § 21.041 Texas Occupations Code, § 53.105 ENACTED 54th Legislature (1955) Fee amount set by rule RATE AND BASE CHANGES 66th Legislature (1979) Repealed 67th Legislature (1981) Re-enacted; fee amount set by rule 74th Legislature (1995) Statutes and fees recodified 81st Legislature (2009) Added Criminal History Evaluation Letter Fee ALLOCATION General Revenue Fund 0001—100% Texas Comptroller of Public Accounts – January 2019 172 Sources of Revenue TEACHER CERTIFICATION FEES (concluded) Revenue Object 3511 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 83 27 44 378 511 396 591 1,411 1,387 1,218 1,281 1,328 1,929 2,218 3,077 3,935 729 6,808 4,790 6,417 7,753 Percent Change Percent of Other Revenue (67.4) 61.7 760.4 35.4 (22.5) 49.1 138.8 (1.7) (12.2) 5.2 3.7 45.2 15.0 38.7 27.9 (81.5) 834.1 (29.6) 34.0 20.8 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.02 0.02 0.02 0.02 0.03 0.04 0.03 0.03 0.03 0.04 0.04 0.04 0.05 0.01 0.08 0.05 0.07 0.07 Year 2000 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Revenue † $ 11,273 11,648 14,223 17,866 19,320 22,930 23,242 23,488 24,716 32,762 32,302 25,950 24,091 26,515 28,195 29,169 29,675 29,699 28,041 Percent Change Percent of Other Revenue 45.4 3.3 22.1 25.6 8.1 18.7 1.4 1.1 5.2 32.6 (1.4) (19.7) (7.2) 10.1 6.3 3.5 1.7 0.1 (5.6) 0.12 0.11 0.13 0.16 0.16 0.17 0.16 0.15 0.13 0.21 0.21 0.15 0.14 0.14 0.14 0.14 0.13 0.13 0.11 † No revenue deposited to trust 1 2 Percentage of processed payments delayed until fiscal 1996 due to the creation of the Educator Certification Board in 1995 Policy change in fiscal 2000 due to SB 177, 76th Legislature: state agencies must collect all fees relating to certification exam 35,000 (Amounts in Thousands) 30,000 25,000 20,000 15,000 10,000 5,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 173 Sources of Revenue WASTE DISPOSAL FACILITIES, GENERATORS & TRANSPORTERS FEES Revenue Object 3592 RATE AND BASE State: Various permits and fees for storing, transporting or disposing hazardous waste, solid waste, industrial solid waste, wastewater, sewage and landfills; rates are generally set by the administering agency to cover regulatory costs Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Commission on Environmental Quality and Texas Railroad Commission No. of Fees Collected: 55,740 Payment Cycle: Various Due Date: Various Remitted By: Operators of waste disposal or storage facilities and waste transporters LEGAL CITATION(S) Texas Health and Safety Code, §§ 361.013, 361.091, 361.121, 361.131 - 361.140, 366.058, 366.059, 366.071, 367.010 Texas Natural Resources Code, § 91.605 Texas Water Code, §§ 26.0301, 29.015 ENACTED 69th Legislature (1985) Various permits and fees on the storage, processing or disposal of hazardous waste, solid waste, industrial solid waste, and private sewage facilities RATE AND BASE CHANGES 70th Legislature (1987) Added permit fees for on-site sewage, wastewater treatment and putrescible waste facilities 71st Legislature (1989) Added solid waste disposal fees on transporters and use of municipal solid waste landfills 72nd Legislature (1991) Added permits and fees for hauling/disposal of oil and natural gas waste 73rd Legislature (1993) Added permit fees for operating a waste tire storage facility 82nd Legislature (2011) Changes deposit of Oil and Gas Waste Fee 83rd Legislature (2013) Lowered Solid Waste Disposal Fee ALLOCATION GR Account - Water Resource Management 0153 — On-site Sewage Permit and Wastewater Treatment Fees GR Account - Solid Waste Disposal Fees 5000 — Landfill solid waste disposal fees GR Account - Oil and Gas Regulation and Cleanup 5155 — Oil and gas waste fees Other hazardous and nonhazardous waste disposal fees and penalties: GR Account - Waste Management 0549 GR Account - Hazardous and Solid Waste Remediation Fees 0550 General Revenue Fund 0001 Texas Comptroller of Public Accounts – January 2019 174 Sources of Revenue WASTE DISPOSAL FACILITIES, GENERATORS & TRANSPORTERS FEES (concluded) Revenue Object 3592 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4,019 10,429 12,698 12,387 15,562 25,400 39,932 42,137 46,763 51,459 50,813 50,435 53,204 55,942 Percent Change Percent of Other Revenue 159.5 21.8 (2.5) 25.6 63.2 57.2 5.5 11.0 10.0 (1.3) (0.7) 5.5 5.1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.30 0.36 0.33 0.38 0.59 0.74 0.61 0.58 0.61 0.56 0.54 0.58 0.54 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 58,987 58,159 56,963 58,954 57,954 58,220 55,724 63,247 62,400 58,177 55,263 54,465 54,713 55,399 51,577 50,465 52,634 53,797 53,692 Percent Change 5.4 (1.4) (2.1) 3.5 (1.7) 0.5 (4.3) 13.5 (1.3) (6.8) (5.0) (1.4) 0.5 1.3 (6.9) (2.2) 4.3 2.2 (0.2) Percent of Other Revenue 0.60 0.55 0.53 0.53 0.47 0.44 0.39 0.40 0.32 0.37 0.37 0.32 0.31 0.30 0.26 0.24 0.23 0.23 0.22 No revenue deposited to trust 80,000 70,000 (Amounts in Thousands) 60,000 50,000 40,000 30,000 20,000 10,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Commission on Environmental Quality Texas Comptroller of Public Accounts – January 2019 175 Sources of Revenue WASTE TREATMENT INSPECTION FEE Revenue Object 3371 RATE AND BASE State: Various fees; for each wastewater discharge permit, a water quality fee up to $100,000; on September 1 each year Texas Commission on Environmental Quality adjusts the maximum fee to reflect the change in the Consumer Price Index, but not exceeding $150,000 per permit or contract; rates are generally set to cover regulatory costs Local: None Federal: None Major Exemptions: None ADMINISTRATION Agency: Texas Commission on Environmental Quality (TCEQ) Number of Taxpayers: 29,841 Payment Cycle: Annual renewals Due Date: Staggered Remitted By: Any person authorized by permit to treat or discharge wastewater and/or storm water LEGAL CITATION(S) Texas Water Code, 26.0135, 26.0291(b)(c), 26.040, 26.0461, 26.179(h) ENACTED 68th Legislature (1983) Wastewater discharge permit fees set at various rates by TCEQ based on flow volume and not to exceed $2,000 RATE AND BASE CHANGES 70th Legislature (1987) Included added parameters for assessing the fee; set the fee at a minimum of $150 but no more than $11,000; added fees for processing plans or amendments for protection of Edwards Aquifer; fee must be at least $100 and may not exceed $2,000 71st Legislature (1989) Increased maximum annual fee from $11,000 to $15,000 upon delegation of the National Pollution Discharge Elimination System (NPDES) program to TCEQ 73rd Legislature (1993) Added fees to cover costs of water sampling/analysis, one-half to water purchaser and one-half to water seller 74th Legislature (1995) Changed maximum annual fee from $15,000 to $25,000 upon delegation of NPDES program to TCEQ permit 75th Legislature (1997) Added permit fees authorizing discharge of waste into/adjacent to water; changed fee rate for processing plans/amendments for protection of Edwards Aquifer to maximum $5,000 77th Legislature (2001) Changed general fee from points based system to fee up to $75,000 for each wastewater discharge permit 79th Legislature (2005) Removed fees to cover costs of water sampling/analysis 80th Legislature (2007) Increased maximum fee rate for processing plans/amendments for protection of Edwards Aquifer to $6,500; added fee up to $13,000 for water pollution abatement/contributing zone plan for development over 40 acres ALLOCATION General Revenue Fund 0001 — Fees associated with a water quality protection zone Water Resource Management 0153 — All other fees Texas Comptroller of Public Accounts – January 2019 176 Sources of Revenue WASTE TREATMENT INSPECTION FEE (concluded) Revenue Object 3371 NET COLLECTIONS (Amounts in Thousands) Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Revenue † $ 0 0 0 0 0 0 0 0 0 0 0 0 2,077 2,130 3,395 3,499 3,830 3,871 3,933 4,018 5,372 5,342 6,969 7,747 7,740 7,819 8,695 11,648 Percent Change 2.5 59.4 3.1 9.4 1.1 1.6 2.2 33.7 (0.6) 30.4 11.2 (0.1) 1.0 11.2 34.0 Percent of Other Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.07 0.08 0.10 0.11 0.10 0.10 0.09 0.10 0.08 0.09 0.09 0.09 0.08 0.09 0.11 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 † Total Revenue † $ 12,596 14,153 13,815 19,717 21,150 22,253 22,593 23,716 23,941 21,967 25,222 25,599 25,864 26,499 29,665 29,979 33,855 36,258 37,116 Percent Change 8.1 12.4 (2.4) 42.7 7.3 5.2 1.5 5.0 0.9 (8.2) 14.8 1.5 1.0 2.5 11.9 1.1 12.9 7.1 2.4 Percent of Other Revenue 0.13 0.13 0.13 0.18 0.17 0.17 0.16 0.15 0.12 0.14 0.17 0.15 0.15 0.14 0.15 0.14 0.15 0.16 0.15 No revenue deposited to trust 40,000 35,000 (Amounts in Thousands) 30,000 25,000 20,000 15,000 10,000 5,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Total Revenue Source(s): Texas Comptroller of Public Accounts; Texas Commission on Environmental Quality Texas Comptroller of Public Accounts – January 2019 177 Sources of Revenue WINE TAX Revenue Object 3259 RATE AND BASE State: Alcohol volume not over 14% — 20.4 cents per gallon More than 14% alcohol — 40.8 cents per gallon Sparkling wine — 51.6 cents per gallon Local: None Federal*: Alcohol volume not over 16% — $1.07 per gallon More than 16% alcohol to 21% alcohol — $1.57 per gallon More than 21% alcohol to 24% alcohol — $3.15 per gallon Naturally sparkling wine — $3.40 per gallon Artificially carbonated wine — $3.30 per gallon Hard Cider — $0.226 Major Exemptions: Shipments out-of-state for consumption out-of-state * For calendar years 2018 and 2019: Rates shown are maximums, based on annual volume. Reduced rates in effect for each category, based on volume. ADMINISTRATION Agency: Texas Alcoholic Beverage Commission Number of Taxpayers: 2,320 Payment Cycle: Monthly Due Date: 15th day of the month for the preceding month Remitted by: Wine wholesalers LEGAL CITATION(S) Texas Alcoholic Beverage Code, § 201.04 (the “Vinous Liquor” tax) ENACTED 44th Legislature (1935) Alcohol volume not over 14% — 2¢ per gallon; more than 14% alcohol, but not more than 24% alcohol — 5¢ per gallon; more than 24% alcohol — 50¢ per gallon; sparkling wine — 25¢ per gallon RATE AND BASE CHANGES 44th Legislature (1936) Over 14% - 20 cents/gallon; 14% or less - 10 cents/gallon 52nd Legislature (1951) Over 14% - 22 cents; 14% or less - 11 cents; sparkling wine - 27.5 cents 56th Legislature (1959) Over 14% - 26.4 cents; 14% or less - 13.2 cents; sparkling wine - 33 cents 62nd Legislature (1971) Over 14% - 34 cents; 14% or less - 17 cents; sparkling wine - 43 cents 68th Legislature (1984) Over 14% - 40.8 cents; 14% or less - 20.4 cents; sparkling wine - 51.6 cents (effective 10/2/84) ALLOCATION General Revenue Fund 0001 and/or certain Events Trust Funds — 100% Note: Texas Alcoholic Beverage Code, Sec. 205.03 stipulates how some wine revenue (i.e., the lesser of the amount exceeding what was collected in fiscal 2014 or $2 million) may be appropriated. Depending on the outcome of computations, this section appropriates various amounts of wine revenue to certain recipients, including: Texas A&M AgriLife Extension Service, Texas Tech University, Grayson County Junior College and the Wine Industry Development Fund 5165 Texas Comptroller of Public Accounts – January 2019 178 Sources of Revenue WINE TAX (concluded) Revenue Object 3259 NET COLLECTIONS (Amounts in Thousands) Year Revenue All Funds 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $ 2,751 2,918 2,729 2,622 3,005 3,349 3,004 3,182 3,645 4,012 4,544 4,926 5,367 6,583 7,336 7,255 6,939 6,440 6,375 6,280 5,275 4,624 5,291 5,231 5,584 5,717 5,959 5,776 Revenue Excludes Trust Percent Change $ 2,751 2,918 2,729 2,622 3,005 3,349 3,004 3,182 3,645 4,012 4,544 4,926 5,367 6,583 7,336 7,255 6,939 6,440 6,375 6,280 5,275 4,624 5,291 5,231 5,584 5,717 5,959 5,776 6.1 (6.5) (3.9) 14.6 11.4 (10.3) 5.9 14.6 10.1 13.2 8.4 9.0 22.7 11.4 (1.1) (4.4) (7.2) (1.0) (1.5) (16.0) (12.3) 14.4 (1.1) 6.7 2.4 4.2 (3.1) Percent of Taxes 0.12 0.11 0.09 0.08 0.08 0.08 0.06 0.06 0.06 0.05 0.05 0.06 0.06 0.06 0.07 0.07 0.06 0.05 0.05 0.04 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 1 Year Revenue All Funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2013 2014 2015 2016 2017 2018 $ 6,844 6,616 6,893 7,327 7,836 8,255 8,681 9,320 7,950 11,915 10,940 11,833 12,286 13,431 13,861 14,780 15,827 17,733 16,398 Revenue Excludes Trust Percent Change $ 6,844 6,616 6,893 7,327 7,836 8,255 8,681 9,320 7,950 11,915 10,940 11,818 12,276 13,421 13,851 14,772 15,784 17,654 16,341 18.5 (3.3) 4.2 6.3 6.9 5.3 5.2 7.4 (14.7) 49.9 (8.2) 8.0 3.9 9.3 3.2 6.6 6.9 11.8 (7.4) Percent of Taxes 0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.03 Starting in 2011, the Events Trust Fund, Major Events Reimbursement Program Fund (trust), Special Events Trust Fund (repealed) and the Motor Sports and Racing Trust Fund started receiving alcoholic beverage taxes 20,000 (Amounts in Thousands) 15,000 10,000 5,000 0 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 Revenue All Funds Revenue Excludes Trust Source(s): Texas Comptroller of Public Accounts; Texas Alcoholic Beverage Commission Texas Comptroller of Public Accounts – January 2019 179 Sources of Revenue Texas Comptroller of Public Accounts January 2019 180 State of Texas Sources of Revenue A History of State Taxes and Fees 1972-2018 Appendices Texas Comptroller of Public Accounts – January 2019 181 Sources of Revenue Texas Comptroller of Public Accounts January 2019 182 Sources of Revenue APPENDIX A Tax and Other Revenue Collections 1972-2018 All Funds Excluding Trust (Amounts in Thousands) Fiscal Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tax Collections $ 2,344,044 2,583,577 3,026,048 3,375,245 3,913,827 4,419,882 5,032,274 5,390,313 6,343,785 7,742,033 8,650,026 8,497,817 9,305,839 10,721,208 10,231,670 10,266,163 12,364,619 12,905,941 13,632,640 14,922,114 15,848,915 17,010,737 18,105,951 18,858,790 19,762,504 21,187,868 22,634,020 23,614,611 25,283,769 27,230,212 26,279,146 26,126,675 27,913,002 29,838,278 33,544,498 36,955,630 41,357,929 37,822,453 35,368,901 38,856,176 44,079,119 47,781,046 50,992,562 51,683,060 48,476,226 49,643,422 55,584,775 Percent Change 10.2 17.1 11.5 16.0 12.9 13.9 7.1 17.7 22.0 11.7 (1.8) 9.5 15.2 (4.6) 0.3 20.4 4.4 5.6 9.5 6.2 7.3 6.4 4.2 4.8 7.2 6.8 4.3 7.1 7.7 (3.5) (0.6) 6.8 6.9 12.4 10.2 11.9 (8.5) (6.5) 9.9 13.4 8.4 6.7 1.4 (6.2) 2.4 12.0 Percent of Total Revenue 82.0 82.0 81.4 81.2 81.2 80.3 80.3 80.3 78.8 78.4 78.6 79.2 78.8 78.3 71.6 74.6 77.8 77.7 77.1 77.6 74.7 71.0 69.2 69.1 68.5 69.4 71.0 69.4 72.1 72.0 70.9 70.0 69.5 69.4 70.3 70.0 68.1 70.8 70.0 69.6 71.4 71.8 72.1 71.1 67.5 68.2 69.0 Average Annual Growth Rate 10.2 13.6 12.9 13.7 13.5 13.6 12.6 13.3 14.2 13.9 12.4 12.2 12.4 11.1 10.3 11.0 10.6 10.3 10.2 10.0 9.9 9.7 9.5 9.3 9.2 9.1 8.9 8.9 8.8 8.4 8.1 8.0 8.0 8.1 8.2 8.3 7.8 7.4 7.5 7.6 7.6 7.6 7.5 7.1 7.0 7.1 Economic Periods Growth Rates FY72-FY83 12.4 FY83-FY92 7.2 FY92-FY01 6.2 FY01-FY03 (2.0) FY03-FY08 9.6 FY08-FY10 (7.5) FY10-18 5.8 Other Revenue1 $ 514,109 566,781 690,206 781,059 903,314 1,085,237 1,231,318 1,318,885 1,704,348 2,138,531 2,354,557 2,228,660 2,501,127 2,973,968 4,057,414 3,496,501 3,527,205 3,708,457 4,059,492 4,303,577 5,381,726 6,931,672 8,049,312 8,415,100 9,068,211 9,332,926 9,231,406 10,429,433 9,763,357 10,575,725 10,771,454 11,207,595 12,222,393 13,162,139 14,149,998 15,857,609 19,386,769 15,603,079 15,131,630 16,984,238 17,660,229 18,731,841 19,683,689 21,044,208 23,330,810 23,186,421 24,962,276 Percent Change 10.2 21.8 13.2 15.7 20.1 13.5 7.1 29.2 25.5 10.1 (5.3) 12.2 18.9 36.4 (13.8) 0.9 5.1 9.5 6.0 25.1 28.8 16.1 4.5 7.8 2.9 (1.1) 13.0 (6.4) 8.3 1.9 4.0 9.1 7.7 7.5 12.1 22.3 (19.5) (3.0) 12.2 4.0 6.1 5.1 6.9 10.9 (0.6) 7.7 Percent of Total Revenue 18.0 18.0 18.6 18.8 18.8 19.7 19.7 19.7 21.2 21.6 21.4 20.8 21.2 21.7 28.4 25.4 22.2 22.3 22.9 22.4 25.3 29.0 30.8 30.9 31.5 30.6 29.0 30.6 27.9 28.0 29.1 30.0 30.5 30.6 29.7 30.0 31.9 29.2 30.0 30.4 28.6 28.2 27.9 28.9 32.5 31.8 31.0 Footnotes: 1 All non tax revenue excluding federal receipts. 2 Total revenue excluding federal receipts. Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 183 Average Annual Growth Rate 10.2 15.9 15.0 15.1 16.1 15.7 14.4 16.2 17.2 16.4 14.3 14.1 14.5 15.9 13.6 12.8 12.3 12.2 11.8 12.5 13.2 13.3 12.9 12.7 12.3 11.7 11.8 11.1 11.0 10.7 10.5 10.4 10.3 10.2 10.3 10.6 9.7 9.3 9.4 9.2 9.2 9.1 9.0 9.1 8.8 8.8 Economic Periods Growth Rates FY72-FY83 14.3 FY83-FY92 10.3 FY92-FY01 7.8 FY01-FY03 2.9 FY03-FY08 11.6 FY08-FY10 (11.7) FY10-18 6.5 Total Revenue2 $ 2,858,153 3,150,358 3,716,254 4,156,304 4,817,141 5,505,118 6,263,592 6,709,198 8,048,133 9,880,564 11,004,583 10,726,477 11,806,966 13,695,176 14,289,084 13,762,664 15,891,824 16,614,398 17,692,132 19,225,691 21,230,641 23,942,410 26,155,262 27,273,890 28,830,715 30,520,794 31,865,426 34,044,044 35,047,125 37,805,937 37,050,600 37,334,271 40,135,395 43,000,416 47,694,496 52,813,239 60,744,698 53,425,532 50,500,531 55,840,414 61,739,347 66,512,887 70,676,251 72,727,268 71,807,036 72,829,842 80,547,051 Sources of Revenue APPENDIX B Changes in Major Texas Tax Rates, Fiscal 1930-2018 Year 1930 1931 1932 1933 1934 1935 1936 1937 Sales Taxes Sales Tax No tax “ “ “ “ “ “ “ Sales Taxes Motor Vehicle Sales Tax No tax “ “ “ “ “ “ “ 1941 1942 1943 1944 1945 “ “ “ “ “ 1% “ “ “ “ 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 “ “ “ “ “ “ “ “ “ “ “ “ 2% “ “ “ “ “ “ 3% 3.25% “ 4% “ “ “ “ “ 1.1% (t) 1.1% “ “ “ “ “ “ “ 1.5% “ “ “ 2% “ “ “ “ 3% “ “ 4% “ “ “ “ 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 “ “ “ 4.125% “ 5.25% (t) 6% “ “ 6.25% “ “ “ “ “ “ “ “ 5% “ “ 6% “ “ “ 6.25% “ “ “ “ 2000 “ “ 2007 2008 “ “ “ “ 2014 2015 2016 2017 2018 “ “ “ “ “ “ “ “ “ “ Motor Fuels Taxes Motor Fuels Taxes Gasoline Diesel Fuel Tax Tax 4¢/gal No tax “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1938 through 1940: No Changes “ 8¢/gal “ “ “ 6¢/gal “ “ “ “ 1946 through 1948: No Changes “ “ “ “ “ “ “ “ “ “ “ “ 5¢/gal 6.5¢/gal “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1976 through 1980: No Changes “ “ “ “ “ “ 10¢/gal 10¢/gal “ “ 15¢/gal (t) 15¢/gal (t) 15¢/gal 15¢/gal “ “ “ “ “ “ 20¢/gal 20¢/gal “ “ “ “ “ “ “ “ 1996 through 1999: No Changes “ “ 2001 through 2006: No Changes “ “ “ “ 2009 through 2013: No Changes “ “ “ “ “ “ “ “ “ “ Severance Taxes Oil Production Tax 2% of value “ “ “ “ “ 2.75% “ Severance Taxes Natural Gas Tax No tax 2% of value “ “ “ “ 3% “ Cigarette Tax No tax 3¢/pack “ “ “ “ “ “ 4.125% “ “ “ “ 5.2% “ “ “ “ “ “ “ “ “ “ 4.53756% 4.6% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 5.72% (t) 5.72% “ “ 9% 8% 7% “ “ “ “ “ “ “ “ “ “ “ “ 7.5% “ “ “ “ “ “ “ 4¢/pack “ “ “ “ 5¢/pack “ “ “ 8¢/pack “ “ “ “ “ 11¢/pack “ “ “ 15.5¢/pack “ 18.5¢/pack “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 19.5¢/pack 20.5¢/pack “ 26¢/pack “ “ 41¢/pack “ “ “ “ “ “ “ “ “ “ “ “ $1.41/pack “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ Note: (t) = temporary Note: The motor fuel tax on liquefied gas was repealed Sept. 1, 2015; no changes to gasoline or diesel fuel tax rates (above). Note: In 1941, a separate tax on diesel fuel was adopted. During the previous 10 years, diesel may have been taxed, as it could be used to power a vehicle. Texas Comptroller of Public Accounts – January 2019 184 APPENDIX B (continued) Changes in Major Texas Tax Rates, Fiscal 1930-2018 Year 1930 1931 1932 1933 1934 1935 1936 1937 Alcoholic Beverage Taxes Beer Tax No tax “ “ $1.50/bbl “ $1.24/bbl “ “ Alcoholic Beverage Taxes Liquor Tax No tax “ “ “ “ $0.80/gal $0.96/gal “ 1941 1942 1943 1944 1945 “ “ “ “ “ $1.28/gal “ “ “ “ 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 “ $1.364/bbl (t) $1.37/bbl “ “ $2/bbl $4.30/bbl “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ $5/bbl “ “ “ “ “ $1.408/gal (t) $1.408/gal “ “ “ “ “ “ “ $1.68/gal “ “ “ “ “ “ “ “ “ “ “ $2/gal “ “ “ “ 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 “ “ “ $6/bbl “ “ “ “ “ “ “ “ “ “ “ “ “ “ $2.40/gal “ “ “ “ “ “ “ “ “ “ “ 2000 “ “ 2007 2008 “ “ “ “ 2014 “ “ 2015 “ “ 2016 “ “ 2017 “ “ 2018 “ “ Alcoholic Alcoholic Beverage Taxes Beverage Taxes Franchise Tax Mixed Beverage Mixed Beverage Base Gross Receipts Tax Sales Tax Rate No tax No tax 65¢/45¢/35¢/$1,000 “ “ of taxable capital “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1938 through 1940: No Changes “ “ “ “ “ $1/$1,000 “ “ “ “ “ “ “ “ “ 1946 through 1948: No Changes “ “ “ “ “ $1.25/$1,000 “ “ “ “ “ “ “ “ “ “ “ $2/$1,000 “ “ $2.25/$1,000 “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ $2.75/$1,000 “ “ “ 10% “ “ “ “ “ “ “ “ “ “ “ “ “ $4.25/$1,000 1976 through 1980: No Changes “ “ “ “ “ “ “ “ “ 12% “ $5.25/$1,000 “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 14% “ “ “ “ “ “ “ $2.50/$1,000 or “ “ 4.5% of earned surplus “ “ “ “ “ “ 1996 through 1999: No Changes “ “ “ 2001 through 2006: No Changes “ “ “ “ “ 1% of taxable margin; 0.5% for taxpayers in wholesale & retail trade 2009 through 2013: No Changes 6.7% 8.25% 0.975% of taxable margin; 0.4875% for taxpayers in wholesale & retail trade “ “ 0.95% of taxable margin; 0.475% for taxpayers in wholesale & retail trade “ “ 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade “ “ 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade “ “ 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade Note: (t) = temporary Note: The airline/passenger train beverage tax repealed Sept. 1, 2015; no change to alcoholic beverage tax rates (above). Texas Comptroller of Public Accounts – January 2019 185 Franchise Tax Applicable Surtax No surtax “ “ “ “ “ “ “ Franchise Tax Total Franchise Tax Rate 65¢/45¢/35¢/$1,000 of taxable capital “ “ “ “ “ “ “ “ “ “ “ “ $1/$1,000 “ “ “ $0.10/$1,000 No surtax “ “ “ “ “ “ “ “ “ $0.75/$1,000 $0.50/$1,000 “ “ “ No surtax “ “ “ $0.50/$1,000 “ $1.75/$1,000 $1.50/$1,000 “ “ No surtax $1.10/$1,000 $1.25/$1,000 “ “ “ $2/$1,000 $2.25/$1,000 “ “ “ “ $3/$1,000 $2.75/$1,000 “ “ “ “ “ “ “ $3.25/$1,000 “ $4.50/$1,000 $4.25/$1,000 “ “ “ “ “ “ “ “ “ “ $1.45/$1,000 “ No surtax “ “ “ “ “ “ “ “ $5.25/$1,000 “ “ “ $6.70/$1,000 “ $5.25/$1,000 “ $2.50/$1,000 or 4.5% of earned surplus “ “ “ “ “ No surtax “ 1% of taxable margin; 0.5% for taxpayers in wholesale & retail trade “ 0.975% of taxable margin; 0.4875% for taxpayers in wholesale & retail trade 0.95% of taxable margin; 0.475% for taxpayers in wholesale & retail trade 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade 0.75% of taxable margin; 0.375% for taxpayers in wholesale & retail trade “ “ “ “ Sources of Revenue APPENDIX B (concluded) Changes in Major Texas Tax Rates, Fiscal 1930-2018 Year 1930 1931 1932 1933 1934 1935 1936 1937 Gas, Electric & Water Utility Tax Cities with 1,001 to 2,499 Population No tax “ “ “ “ “ “ “ Gas, Electric & Water Utility Tax Cities with 2,500 to 9,999 Population 0.5% of receipts “ “ “ “ “ 0.7% “ 1941 1942 1943 1944 1945 0.44% of receipts “ “ “ “ 0.81% “ “ “ “ 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 “ 0.484% (t) 0.484% “ “ “ “ “ “ “ 0.581% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 0.891% (t) 0.891% “ “ “ “ “ “ “ 1.07% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 2000 “ “ 2007 2008 “ “ “ “ 2014 2015 2016 2017 2018 “ “ “ “ “ “ “ “ “ “ Insurance Insurance Gas, Electric & Water Premium Taxes Premium Taxes Utility Tax Property and Casualty Property and Casualty Cities with over 9,999 Population Texas-Based Out-of-State 1% of receipts 0.5-2.6% 0.5-2.6% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1.375% 0.625-3.25% 0.625-3.25% “ “ 0.5–3.25% 1938 through 1940: No Changes 1.5125% 0.75-4.05% 0.5-4.05% “ “ “ “ “ “ “ “ “ “ 1.0-3.5% 1.0-3.5% 1946 through 1948: No Changes “ “ “ 1.66375% (t) “ “ 1.66375% 1.1-3.85% 1.1-3.85% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1.997% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1976 through 1980: No Changes “ 1.2-3.5% 1.2-3.5% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1.6-3.5% 1.6-3.5% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1996 through 1999: No Changes “ 1.6% 1.6% 2001 through 2006: No Changes “ “ “ “ “ “ 2009 through 2013: No Changes “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ Insurance Premium Taxes Life, Accident & Health Texas-Based No tax “ “ “ “ “ 0.5% “ Insurance Premium Taxes Life, Accident & Health Out-of-State 1.5-3% “ “ “ “ “ 2.5-3.75% “ 0.625% “ “ “ 0.95-3.5% 3.1-4.65% “ “ “ 0.95-3.5% 1% “ 1.1% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1.75-3% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ 1.1-2.5% “ “ “ “ “ 1.3-2.4% 1.4-2.3% 1.5-2.2% 1.6-2.1% 1.7-2% 1.75% “ “ 1.925-3.3% 1.1-2.5% “ “ “ “ “ 1.3-2.4% 1.4-2.3% 1.5-2.2% 1.6-2.1% 1.7-2% 1.75% “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ Note: (t) = temporary Sources: House Ways & Means Committee, “Texas Tax Facts,” February 1993; Texas Department of Insurance; and Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 186 Sources of Revenue APPENDIX C Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 1961 The 57th Legislature, First Called Session Enacted the Texas Limited Sales, Excise and Use Tax Act and imposed a 2 percent tax on all retail sales of tangible personal property, except those specifically exempted. Effective Sept. 1, 1961. 1963 The 58th Legislature, Regular Session Reenacted the Limited Sales, Excise and Use Tax Act to add amendments that clarified and simplified administration of the tax. Authorized direct payment procedures. Effective July 1, 1963. 1967 The 60th Legislature, Regular Session Enacted the Local Sales and Use Tax Act and authorized cities to impose a 1 percent local tax on all retail sales of tangible personal property taxed under the state Sales and Use tax. Effective Jan. 1, 1968. Provided exemptions for sales of certain casing and drill pipe. Effective July 1, 1967. 1968 The 60th Legislature, First Called Session Increased the state Sales and Use tax rate on retail sales to 3 percent. Effective Oct. 2, 1968. 1969 The 61st Legislature, Regular Session Restored in the Tax Code the definitions for contractor and repairman, which were inadvertently omitted by the 60th Legislature, First Called Session. Effective June 10, 1969. 1969 The 61st Legislature, Second Called Session Increased the state Sales and Use tax rate to 3.25 percent. Made beer and wine subject to the Sales and Use tax. Effective Oct. 1, 1969. 1971 The 62nd Legislature, Regular Session Increased the state Sales and Use tax rate to 4 percent. Effective July 1, 1971. Exempted the leasing or licensing of motion picture films to licensed television stations. Effective Feb. 5, 1971. Exempted certain commercial vessels of 50 tons or more displacement. Effective Aug. 30, 1971. 1971 The 62nd Legislature, First Called Session Exempted the sale, preparation or serving of mixed beverages, ice or nonalcoholic beverages taxed under the Texas Liquor Control Act. Effective June 8, 1971. 1973 The 63rd Legislature, Regular Session No longer required beer distributors to secure resale certificates. Effective May 18, 1973. Required delinquent taxpayers and new permit holders to post bond to ensure payment of taxes. Effective Jan. 1, 1974. Texas Comptroller of Public Accounts – January 2019 187 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Required taxpayers collecting in excess of $750 per month in Sales and Use taxes to file tax returns and make payments monthly. Effective Sept. 1, 1974. Exempted volunteer fire departments. Effective Aug. 27, 1973. 1975 The 64th Legislature, Regular Session Exempted certain agricultural machinery and equipment. Effective Sept. 1, 1975. Excluded from the definition of “sales price” voluntary tips and gratuities. Effective April 30, 1975. Exempted component parts for newspapers. Effective Sept. 1, 1975. Exempted food sales by Parent-Teacher Associations and by youth athletic organization members aged 18 years old or younger. Effective Sept. 1, 1975. Exempted solar energy devices, bicentennial organizations, aircraft used for flight instruction and vessels of eight tons or more displacement used exclusively for commercial purposes. Effective Sept. 1, 1975. Excluded excise tax on tires and fishing equipment from the definition of “sales price.” Effective Sept. 1, 1975. 1977 The 65th Legislature, Regular Session Excluded from the definition of “sales price” mandatory gratuities disbursed to qualified employees. Effective April 25, 1977. Authorized exempt religious, educational or charitable organizations to hold a single one-day, tax-free sale or auction during each calendar year. Effective May 24, 1977. Exempted the leasing or licensing of motion picture films by theaters and television stations. Effective June 10, 1977. Authorized retailers to seek a refund or credit for Sales and Use tax paid on an account subsequently charged off for federal income tax purposes as a bad debt. Effective June 15, 1977. Exempted organizations qualifying for exemption from income tax under Internal Revenue Code Section 501(c)(3). Effective Aug. 29, 1977. Exempted film, tapes, photographs and other materials used in broadcasting operations by radio and television stations. Effective Aug. 29, 1977. Exempted newspapers and semi-annual or longer subscriptions to magazines. Effective Aug. 29, 1977. Exempted syringes and hypodermic needles. Effective Aug. 29, 1977. Added emergency medical services to the exemption provided for volunteer fire departments. Effective Aug. 29, 1977. Required liquor permit holders to obtain a certificate of good standing from the Comptroller whenever a new permit is granted or an existing permit is renewed by the Texas Alcoholic Beverage Commission. Effective Aug. 29, 1977. Eliminated the requirement that a resale certificate be issued by a licensed beverage retailer to a licensed wholesaler or local distributor on purchases of liquor and wine. Originally, only beer or malt liquor could be purchased without a resale certificate. Effective Aug. 29, 1977. Texas Comptroller of Public Accounts – January 2019 188 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 1978 The 65th Legislature, Second Called Session Repealed the state and local taxes on the residential use of natural gas and electricity. Provided cities the option of continuing the 1 percent city tax on residential use of natural gas and electricity. Effective Oct. 1, 1978. 1979 The 66th Legislature, Regular Session Clarified the procedure for collecting and reporting city tax. Added a new requirement that retailers located outside taxing cities assume the same responsibilities as out-of-state retailers to collect and report the city use tax. Effective June 13, 1979. Exempted special printing or signaling equipment used by the deaf for communication through a telephone. Effective Aug. 27, 1979. Repealed Article 20.10 concerning overpayments and refunds and transferred the language into Chapter 111 so that the same procedures govern all taxes. Effective Aug. 27, 1979. Raised the interest rate charged by the state on delinquent taxes to 7 percent. Effective Jan. 1, 1980. 1981 The 67th Legislature, Regular Session Repealed Chapter 20, Title 122A and adopted Title 2 of the Tax Code, a nonsubstantive revision of the Sales and Use tax law. Chapter 20 became Subtitle E, Chapter 151. Effective Jan. 1, 1982. Taxed items purchased under resale or exemption certificates and put to personal use on the rental value for the time used, not on the original purchase price of the item. Effective July 1, 1981. Effective July 1, 1981, required the following charges to be separately stated to the customer in order to be excluded from the taxable sales price of an item: • gratuities; • cash discounts; • trade-ins; • repair charges; • installation charges; • returned merchandise; • finance and credit charges; • transportation, carrying or service charges; and • federal excise tax on tires and fishing equipment. Exempted all therapeutic equipment prescribed for an individual by a doctor. Effective Oct. 1, 1981. Required all taxpayers who owe more than $1,500 in Sales and Use tax a month to file monthly returns. Effective Jan. 1, 1982. Exempted shipments outside a metropolitan transit authority (MTA) from the MTA sales tax. If a retailer located in an MTA ships items to a customer outside the MTA, the MTA sales tax does not apply. MTA use tax is due if the item is shipped into another authority. Effective Aug. 31, 1981. Texas Comptroller of Public Accounts – January 2019 189 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Exempted purchases by certain civic, fraternal and veteran organizations qualifying for exemption from federal income tax under Internal Revenue Code Sections 501(c)(4), (c)(8), (c)(10), or (c)(19). Effective June 16, 1981. Exempted purchases by non-profit chambers of commerce. Effective June 16, 1981. Exempted sales of handicrafts by senior citizen organizations. Effective June 16, 1981. Required retailers to report interest charges on Sales and Use tax. If a “cash basis” seller charged interest on tax, part of the interest charges must be paid to the state. Effective Jan. 1, 1982. Raised the interest rate on delinquent taxes to 10 percent. Allowed the state to pay 10 percent interest on refund claims. Effective Jan. 1, 1982. 1983 The 68th Legislature, Regular Session Changed the due date for Sales and Use tax returns to the 20th day of the month following the end of a reporting period. Effective Oct. 1, 1983. Required all taxpayers owing more than $1,500 in sales and use tax a quarter to file monthly returns. Effective Oct. 1, 1983. Reduced the prepayment discount to 1.25 percent and required a prepayment estimate to be at least 90 percent of the amount of tax due for the reporting period or that amount of tax due in the same reporting period of the preceding year. Effective Oct. 1, 1983. Required all direct payment permit holders to file monthly direct payment returns on or before the 20th day of the month following the end of the reporting period. Effective Oct. 1, 1983. Required applicants for a direct payment permit to purchase at least $800,000 a year in taxable items in order to qualify for a permit. Effective May 24, 1983. Repealed the provision that allowed certain manufacturers to file annual returns. Effective Oct. 1, 1983. Limited the exemption for solar energy devices to site-built solar energy devices and those that meet the rating and certification standards set by the Public Utility Commission of Texas. Effective Aug. 29, 1983. Exempted bins used to transport fruit or vegetables from the field to the location where the items are processed, packaged or marketed. Effective Aug. 29, 1983. Exempted the sale of gold, silver or numismatic coins or platinum, gold or silver bullion when the sales price of the transaction equals $10,000 or more. Effective Sept. 1, 1983. Exempted certain equipment used by the blind to enable them to function more independently. Effective Sept. 1, 1983. Exempted certain sales to or by Indian tribes that have a reservation in Texas. Effective Sept. 1, 1983. Exempted purchases by non-profit convention and tourist promotional agencies. Effective Sept. 1, 1983. Exempted publications distributed by licensed and certified carriers to customers traveling on the carrier. Effective Aug. 29, 1983. Exempted certain purchases by Texas Hospital Equipment Financing Councils. Effective Aug. 29, 1983. Exempted certain materials and equipment used by qualified businesses in a Texas Enterprise Zone and allowed cities to refund city sales tax paid by qualified businesses in a Texas Enterprise Zone. Effective Sept. 1, 1983. Texas Comptroller of Public Accounts – January 2019 190 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 1984 The 68th Legislature, Second Called Session (All changes effective Oct. 2, 1984) Increased the state Sales and Use tax rate to 4.125 percent. Taxed certain services, including amusement services, cable television services, personal services, motor vehicle parking and storage services, plus the repair, remodeling, maintenance and restoration of certain tangible personal property. Excluded from tax the labor to repair, remodel, maintain and restore aircraft and commercial vessels, plus the repair, maintenance and restoration of motor vehicles. Exempted the sale of a taxable service for resale. Exempted services performed on an exempt item of tangible personal property or for an exempt entity, performed directly on a product being manufactured for sale for the purpose of making the product more marketable or performed by an employee for that employee’s employer in the regular course of the employee’s regularly compensated duties. Exempted repair, remodeling, maintenance, or restoration services performed on tangible personal property if the services are required by law to protect the environment or to conserve energy. Exempted amusement and personal services provided through coin-operated machines that are operated by the consumer. Exempted amusement services provided by governmental entities and certain non-profit organizations. Taxed tangible personal property used by a contractor in performing a contract to improve realty for the federal government. Provided a prior-contract exemption for taxable services, contracts to improve realty for the federal government and the increase in the state tax rate. Taxed cigarettes, cigars and tobacco products under the Sales and Use tax as well as under the existing tobacco taxes. Taxed canned computer programs and exempted custom computer programs. Taxed all food sold ready for immediate consumption through a vending machine for 17 cents or more. Taxed newspapers sold by individual copy or by subscription. Taxed magazines sold by individual copy or by subscription. Deleted the “segregation of tangible personal property” from the definition of “sale.” Taxed charges for transportation occurring before the transfer of title or possession of tangible personal property. Made resale and exemption certificates the only acceptable proof of resale or exemption. Required a seller to obtain a certificate at the time the transaction occurs or within 60 days from the date the Comptroller requires the seller to produce the certificates. If not obtained within the 60 days, the seller’s deduction is disallowed. Required a lessor to collect Sales and Use tax on the entire sale price, including all lease payments, of a financing lease at the time the lessee takes possession of the property or when the first payment is due, whichever is earlier. Texas Comptroller of Public Accounts – January 2019 191 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Excluded rentals and leases from the occasional sale exemption. Prohibited a person who holds a permit issued under Chapter 151 from making an occasional sale under Section 151.304(b)(1). Added an occasional sale exemption for certain sales of amusement services. Limited the six-month useful life exemption to machinery, equipment, replacement parts or accessories that are entirely consumed or without value within six months after the date purchased new. Excluded taxable items that are rented or leased to a manufacturer from the manufacturing exemption. Limited the exemption for fertilizer to that used on a farm or ranch in the production of an agricultural product held for sale. Exempted the master tape of an audio or audiovisual work that is used to manufacture copies of the work. Exempted certain flight simulators used exclusively for flight training in a licensed course of instruction. 1985 The 69th Legislature, Regular Session Taxed certain telecommunications services. Effective Oct. 1, 1985. Permitted cities and metropolitan transit authorities to impose city and MTA tax on intrastate telecommunications services. Effective Oct. 1, 1987. Provided stricter requirements for proof of export for items purchased in Texas and exported outside the United States. Effective Aug. 26, 1985. Repealed the use tax exemption for tangible personal property acquired outside Texas and moved into Texas for use as a licensed and certificated carrier of persons or property (Section 151.330(c)). Effective Oct. 1, 1985. Added a provision allocating the city and MTA tax due on amusement services to the city or MTA in which the event takes place. Effective Aug. 26, 1985. Exempted gold and silver medallions designated as official sesquicentennial commemorative medallions by the Texas 1986 Sesquicentennial Commission. Effective Aug. 26, 1985. Amended the exemption for certain sales to or by Indian tribes to include the Kickapoo Indians. Effective Sept. 1, 1985. Allowed taxpayers to voluntarily contribute all or part of the timely filing discount earned on the Sales and Use tax return to a fund for student financial assistance grants. Effective June 14, 1985. Made divergent use of tangible personal property purchased under a resale certificate subject to local sales tax rather than use tax. Effective Aug. 26, 1985. Transferred the language concerning the required date payment and the additional 10 percent penalty assessed under a deficiency determination to the General Provisions, Section 111.0081 and changed the date payment as required. Effective Aug. 26, 1985. Exempted tangible personal property used by a contractor in performing a contract for the improvement of realty for the U.S. Department of Defense in connection with a significant new naval military facility. Effective July 30, 1985. Granted the Comptroller the authority to refuse to issue or renew any permit or license to a person who is delinquent in any tax collected by the Comptroller, Section 111.0046. Effective April 30, 1985. Texas Comptroller of Public Accounts – January 2019 192 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 1986 The 69th Legislature, Second Called Session Repealed the provision requiring the state to pay interest on refunds of state tax overpayments. Effective Dec. 4, 1986. Credited to the General Revenue Fund interest earned on local taxes collected by the state and held in financial institutions before distribution to the local governments. The change in the law applied to interest earned before or after the clarifying amendment. Effective Sept. 7, 1986. 1986 The 69th Legislature, Third Called Session Until Aug. 31, 1987, increased the state Sales and Use tax rate to 5.25 percent, with the rate reverting to 4.125 percent on Sept. 1, 1987. Effective Jan. 1, 1987. (Note: The rate did not revert in 1987. Instead, the rate was raised on Oct. 1, 1987 to 6 percent.) Provided a prior-contract exemption from the increase in the state tax rate. The exemption expired on Sept. 30, 1987. Effective Jan. 1, 1987. Enacted the County Sales and Use Tax Act authorizing qualifying counties to impose a tax at a rate of 0.5 percent or 1 percent if no incorporated city exists within the county. Revenues must be used to reduce property taxes. Effective Jan. 1, 1987. Provided for an additional 0.5 percent city tax to be imposed by cities for property tax relief. Effective Jan. 1, 1987. Provided for an additional 0.25 percent or 0.5 percent sales and use tax to be imposed by qualifying cities to fund a metropolitan transit department. Effective Jan. 1, 1987. 1987 The 70th Legislature, Regular Session Provided a prior-contract exemption for the county sales and use tax, the additional city sales and use tax and the metropolitan transit department sales and use tax. The exemption expires three years after the effective date of the imposition of the local tax option. Effective April 2, 1987. Allowed cities that do not impose a property tax to adopt the additional 0.5 percent city sales and use tax. Effective April 2,1987. Provided for refunds for Sales and Use taxes paid by enterprise projects on certain items. Effective Aug. 31, 1987. 1987 The 70th Legislature, Second Called Session (All changes effective Oct. 1, 1987, unless otherwise indicated) Increased the state Sales and Use tax rate to 6 percent. Provided a prior-contract exemption from the increase in the state tax rate. Effective July 21, 1987. The exemption expired on July 1, 1990. Provided a separate prior-contract exemption for services added to the tax base, also effective July 21, 1987. This exemption expired on Jan. 1, 1990. Added the following services to the tax base: credit reporting services, debt collection services, insurance services, information services, real property services and security services. Texas Comptroller of Public Accounts – January 2019 193 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Added data processing services and real property repair and remodeling services to the tax base. Effective Jan. 1, 1988. Added for-profit country clubs to amusement services. Provided that food sales through a vending machine are taxable at 50 percent of total gross receipts, except soft drinks and candy, which are taxable at 100 percent of total gross receipts. Made taxable transportation both before and after the sale of a taxable item by deleting references to “transportation after the sale” from the exclusion from the definition of “sales price” in Section 151.007(c). Taxed repair and remodeling labor in the same way. Taxed charges for installation of tangible personal property in connection with the sale of the property whether or not the charges were separately stated from the charge for the property. Exempted newspapers and the sale of magazines sold on subscription for a semi-annual or longer period. Imposed a $25 fee for Sales and Use tax permits and renewals. Expanded the definition of “engaged in business” in Texas. Added a definition of repair services. Exempted ice used by commercial fishing boats. Exempted newly taxable service transactions among affiliated entities. Exempted lawn and yard services performed by persons younger than 18 years of age. Exempted cooperative research and development ventures. Provided a phased-in tax refund or reduced tax rate for certain equipment with a useful life in excess of six months and used in manufacturing. The tax refund began with property purchased in 1991. Repealed the following exemptions: • Sec. 151.011 • Sec. 151.0032 • Sec. 151.028 • Sec. 151.056 • Sec. 151.151 • Sec. 151.305 • Sec. 151.314(d) Deleted the definition that allowed tangible personal property purchased in Texas under a resale or exemption certificate to be taken out of state without Texas tax being due; Custom computer programs; Federal excise tax information; Deleted references to repairman; “Unable to ascertain” language deleted from section on who may issue a resale certificate; Coin-operated machine sales; Food and drink served by common carriers; • Sec. 151.317(c)(2) Restaurants and others preparing and storing food ready for immediate consumption; • Sec. 151.323 Basic local exchange service and telephone cooperatives; • Sec. 151.326 Broadcasting stations; • Sec. 151.325 Solar energy devices; Texas Comptroller of Public Accounts – January 2019 194 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base • Sec. 151.3261 Original visual or audiovisual materials; • Sec. 151.330(b) Sales to common carriers; • Sec. 151.327 • Sec. 151.330(e) • Sec. 151.333 • Sec. 151.334 • Sec. 151.336 Motion picture films; Repair parts for common carriers; Equipment used in enterprise zones; Lone Star medallions; and Certain coins and precious metals. 1989 The 71st Legislature, Regular Session Accelerated the effective date of the phased-in tax refund for certain manufacturing machinery and equipment with a useful life of more than six months. Provided an exemption for pollution control equipment. Effective Aug. 28, 1989. Provided an exemption for purchases by certain cooperative research and development ventures (MCC and Sematech of Austin). Effective Aug. 28, 1989. Provided special export procedures for maquiladora enterprises. Effective June 14, 1989. Provided an exemption for temporary help services. Effective Oct. 1, 1989. Provided an exclusion from the definition of taxable services for the creation of computer software and for the maintenance and repair of software owned by a third party. (Exempted contract programmers already exempt by rule.) Effective Oct. 1, 1989. Provided an exemption for sales of certain items through coin-operated bulk vending machines for 25 cents or less. Effective Oct. 1, 1989. Granted an exemption for amusement services provided in a place designated as a Recorded Texas Historic Landmark by the Texas Historical Commission or included in the National Register of Historic Places. Effective Oct. 1, 1989. Added provisions for nonresidents (mail-order firms) to collect use tax and a formula for allocation of local tax. Effective on the first day of the first month following the effective date of the federal legislation, if and when passed. Reinstated the “storage and use” exclusion to Section 151.011. Effective Oct. 1, 1989. Provided an exemption for lawn care services provided by certain individuals 65 years and older. Effective Oct. 1, 1989. Provided an exemption for component parts, machinery, tools and equipment used or consumed in retrofitting or repairing jet aircraft engines. This exemption is subject to the phased-in refund provisions for items purchased beginning in 1990. Effective Aug. 28, 1989. A separate exemption was provided for these same items used in repair, remodeling or maintenance of aircraft for or by a licensed or certificated carrier. Effective Sept. 1, 1989. Provided an exemption for the sale of platinum, gold, silver or numismatic coins or platinum, gold or silver bullions in a transaction of $1,000 or more. Effective Aug. 28, 1989. Provided for a one-time refund of Sales and Use taxes paid by certified businesses in enterprise zones, not to exceed $5,000 per business. Effective Sept. 1, 1991. Texas Comptroller of Public Accounts – January 2019 195 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Expanded the exemption for writings and periodicals of religious organizations to include writings published by philanthropic, charitable, historical, scientific and similar organizations. Effective Aug. 28, 1989. Allowed the San Saba Hospital District, the Parker County Hospital District and county crime control and prevention districts to impose local tax if approved by voters. Effective Aug. 28, 1989, for the two hospital districts; June 14, 1989 for crime control and prevention districts. Allowed cities to impose local tax to benefit certain industrial development corporations. Effective Jan. 1, 1990. 1989 The 71st Legislature, First Called Session Allowed all hospital districts to impose local tax if approved by voters. Effective Sept. 1, 1989. 1990 The 71st Legislature, Sixth Called Session Increased the state Sales and Use tax rate to 6.25 percent from 6 percent. Provided a prior-contract exemption. Effective July 1, 1990. 1991 The 72nd Legislature, Regular Session Provided motor vehicle repairers operating under separated contracts a resale exemption for consumable supplies resold to customers. Effective Oct. 1, 1991. Established June 30, 1993 as the expiration date for the prior-contract exemption on the 6.25 percent rate increase. Provided a Sales and Use tax exemption for corporations formed by the Texas National Research Laboratory Commission (TNRLC). Provided an exemption for taxable items purchased or leased from a corporation established by the TNRLC (non-profit financing corporations issuing revenue bonds for the super-conducting super collider research facility). Effective Sept. 1, 1991. 1991 The 72nd Legislature, First Called Session (All changes effective Oct. 1, 1991, unless otherwise indicated.) Amended Section 151.429 requiring jobs in the enterprise project to be permanent and requiring the Texas Department of Economic Development to certify annually that the required level of employment has been maintained. Directed the Comptroller to assess the amount refunded plus penalty and interest if the job level is not maintained. Broadened the “engaged in business” provisions under Sections 151.008(b)(5) and 151.007(a)(4). Added to the list of taxable services telephone answering services where the messages are taken by a human operator. Repealed the Sales and Use tax permit fee. Repealed the exemption for wrapping and packaging supplies. Taxed charges for membership in non-profit country clubs described under Section 501(c)(7) of the Internal Revenue Code. Taxed musical concerts given by those entities listed under Subsection 151.3101(a) if provided jointly with a person not listed under (a). Texas Comptroller of Public Accounts – January 2019 196 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Limited the exemption under Section 151.311 to school districts and public and private non-profit hospitals licensed under Chapters 241 or 577 of the Health and Safety Code. (Materials sold by separated contractors to exempt entities still qualify for the sale for resale exemption. Lump-sum contractors owe tax on materials.) Excluded boats and motors defined by Chapter 160 from the exemption in Section 151.3111. Delayed the manufacturing exemption for machinery and equipment until Oct. 1, 1993. Amended Section 151.0048 to exclude from “garbage” hazardous waste, industrial solid waste, waste from oil fields, and sewage. Effective Sept. 1, 1991. Provided a prior-contract exemption for the change to Section 151.311 only for contracts signed on or before Aug. 14, 1991. The exemption expired Aug. 14, 1994. 1993 The 73rd Legislature, Regular Session Amended Section 151.0048 to exclude from the definition of “garbage” industrial discharges subject to regulation by permit issued pursuant to Chapter 26 of the Water Code. Expanded Section 151.058 to cover all services rather than just repair services and further defined “sales price” of services. Effective Sept. 1, 1993. Amended Section 151.103 (Use tax) to make it the same as Section 151.052 (Sales tax). Effective Oct. 1, 1993. Changed “tangible personal property” to “taxable item” in Section 151.104. Effective Sept. 1, 1993. Added Sections 151.157, 151.158, 151.159, 151.160, 151.307(c) and (d), 151.3071 and 151.713 to cover customs brokers and exports. Provided an exemption for exported audio equipment, even if installed in Texas before export. Effective June 19, 1993. Added subsection (g) to Section 151.304 so that persons holding permits would owe use tax when purchasing tangible personal property from a person making an occasional sale under Section 151.304(b)(1). Effective Sept. 1, 1993. Amended Section 151.308 to put mobile offices under Chapter 151. Effective Oct. 1, 1993. Added subsection (6) to Section 151.309 providing a reciprocal Sales and Use tax exemption for bordering states. Effective July 1, 1993. Amended Section 151.310(c) to allow organizations under Section 151.310(a)(2) (as well as (a)(1)) and each chapter of such organizations to hold two (increased from one) tax-free sales or auctions during a calendar year. Also added guidelines for charitable care requirements that non-profit hospitals must meet to qualify for exemption from the Sales and Use tax. Effective Aug. 30, 1993. Amended Section 151.311 to allow contractors an exemption for incorporated materials, consumable supplies and certain services when improving realty for organizations covered by Sections 151.309 and 151.310. Taxed the contractor’s equipment. Provided a three-year prior-contract exemption for machinery and equipment used in a contract to improve realty for school districts and certain non-profit hospitals if the contract was signed before Oct. 1, 1993. The prior-contract exemption was not made a part of the Tax Code but was part of the enabling legislation. Effective Oct. 1, 1993. Added subsection (b) to Section 151.316 to provide an exemption for components of underground irrigation systems sold or used to be installed on farms and ranches. Effective Sept. 1, 1993. Texas Comptroller of Public Accounts – January 2019 197 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Added subsection (p) to Section 151.318 making the production of a motion picture, video or audio recording “manufacturing.” Also allowed an exemption for the machinery and equipment rented for use in production. Effective Oct. 1, 1993. Repealed Section 151.318(c)(5) on wrapping and packaging. Effective Oct. 1, 1993. Clarified that “magazine” does not mean the publication of current information that is taxable pursuant to Section 151.0038 as an “information service.” Added to Section 151.320(b). Effective Sept. 1, 1993. Amended Section 151.328 to allow an exemption certificate to be issued for aircraft purchased by nonresidents. Effective Oct. 1, 1993. Amended Section 151.330 by adding subsections (h) and (i) to allow an exemption for certain sales to and purchases by common carriers. (Previously covered by subsections (b) and (e) of 151.330; subsections (b) and (e) were repealed effective Oct. 1, 1987). Effective Oct. 1, 1993. Added Section 151.350 to exempt labor to restore real or personal property damaged in a disaster area. (The materials used remained taxable). Effective Oct. 1, 1993. Amended Sections 151.401 and 151.402 requiring electronic filers to file by Aug. 20 on all sales made between Aug. 1 and Aug. 15. Effective Sept. 1, 1994, it expired on Jan. 1, 1996. (The Legislature gave the Comptroller authority to waive this requirement for all affected taxpayers.) Amended Section 151.429 to include a “qualified hotel project” as an enterprise project if the hotel is owned by a municipality or non-profit municipally sponsored local government corporation. The amendment refunds 100 percent of the Sales and Use tax collected at the project to the hotel owner. Effective Aug. 30, 1993. Repealed Sections 151.502 and 151.706 concerning penalties. Effective Sept. 1, 1993. Added Section 151.7031 to impose a $50 penalty if a person fails to file timely reports on two or more occasions. Effective Sept. 1, 1993. Amended Section 151.707 to increase penalties for intentionally giving invalid resale or exemption certificates. Effective Sept. 1, 1993. Amended Section 151.801 to allocate Sales and Use taxes collected from the sale of sporting goods to the State Parks Account in the General Revenue Fund. Defined “sporting goods.” Effective Sept. 1, 1993. 1995 The 74th Legislature, Regular Session Senate Bill 640—effective Oct. 1, 1995 Amended Section 151.0036, the definition of “debt collection service,” to allow a person handling or collecting on a non-sufficient funds check to collect tax from the drawer or endorser of the check. Amended Section 151.0038 to exclude from the definition of “information service” the furnishing of information to a member of a homeowners association of a residential subdivision or condominium development by or on behalf of the association. Amended Section 151.0047 to exclude from the definition of “real property repair or remodeling” an improvement to a processing unit that increases capacity at a petrochemical refinery or chemical plant. Amended Section 151.0048 to exclude from the definition of a “real property service” such services purchased by a contractor as part of the improvement of new residential structures. Amended Section 151.027, on confidentiality of tax information, to allow the Comptroller to provide information to an eligible city, as prescribed in the new Section 321.3022. Texas Comptroller of Public Accounts – January 2019 198 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Amended Section 151.154 to clarify the liability of a purchaser making a divergent use of taxable items purchased with a resale certificate. Substituted “taxable items” for “tangible personal property.” Defined the value of a taxable service as the amount a purchaser would pay on the open market to obtain the service for use. Amended Section 151.155 to clarify the liability of a purchaser making a divergent use of taxable items purchased with an exemption certificate. Substituted “taxable items” for “tangible personal property.” Defined the value of a taxable service as the amount a purchaser would pay on the open market to obtain the service for use. Amended Section 151.313, concerning health care supplies, to clarify that hospital beds are exempt medical equipment. Amended Section 151.314(e), which exempts certain sales of food and non-food products by young people, to raise the maximum qualifying age of the seller from 17 to 18 years old. Amended Section 151.316, on agricultural items: • to define “machinery and equipment” used in the processing, packing and marketing of agricultural products to include required pollution control equipment; • to enable closely held related corporations to qualify as an “original producer”; • to allow a producer to qualify as an “original producer” so long as more than 95 percent of the products processed belong to that producer; • to codify the definition of “farm or ranch” in Rule 3.296; and • to define “original producer.” Added a new Section 151.3161 to exempt the first $50,000 of equipment purchased for exclusive use in commercial timber operations. Excluded from the exemption: equipment rented for a term of less than 12 months; repair parts, accessories and components; and hand-held tools. Amended Section 151.3111, which exempts services performed on tangible personal property that is exempt, to exclude from the exemption services performed on machinery and equipment with a purchase price greater than $50,000. Amended Section 151.317(c) to clarify the definition of “residential use” for purposes of the gas and electricity exemption. Clarified the exemption for gas and electricity used in producing and transporting a material extracted from the earth by changing “exploring for or producing and transporting” to “exploring for, producing or transporting.” Exempted electricity used in jet engine repair work for licensed carriers. Amended Section 151.318, on property used in manufacturing: • to limit the exclusion in subsection (e) for taxable items rented or leased to those leased for less than a year; • to correct subsection (m) to make it clear that the reduction in state taxes paid on machinery purchased in 1994 did not affect local taxes; • to extend the exemption in subsection (n) to certain consumable supplies used by persons overhauling jet turbine engines; and • to clarify the existing manufacturing exemptions and add additional exemptions for semiconductor “cleanroom equipment” and supplies. Amended Section 151.319, the exemption for newspapers and property used in newspaper publication, to delete subsection (e)(5), which excluded from the exemption wrapping and packaging supplies used by newspapers. Amended Section 151.342, relating to agribusiness items, to exempt poultry cages used as containers in transporting poultry from a poultry farm to a location where the poultry is processed, packaged or marketed. Texas Comptroller of Public Accounts – January 2019 199 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Amended Section 151.350 to clarify that the exemption for labor performed on real or tangible personal property damaged in a “disaster area” is not limited to repair labor, but includes labor performed in connection with cleaning, restoration, and remodeling. Senate Bill 1658—effective Sept. 1, 1995 Added Section 111.110 to allow the owner of certain real estate transferred to the University of Houston on or before Aug. 31, 1996, to qualify for a tax credit to reduce the owner’s Sales and Use tax liability if the owner is a direct pay permit holder. Senate Bill 345—effective Sept. 1, 1995 Added Section 111.301 to provide certain eligible persons a refund of state Sales and Use taxes for ad valorem taxes paid to a school district on certain property. The property must be located in a reinvestment zone created under Chapter 312, exempt in whole or in part from the payment of ad valorem taxes imposed by a city or county under a tax abatement agreement and not subject to a tax abatement agreement entered into with a school district. Senate Bill 793—effective Sept. 1, 1995 Amended Section 151.0036 to exclude from the definition of debt collection service the collection of court-ordered child-support payments or medical child-support payments. House Bill 462—effective Oct. 1, 1995 Amended Section 151.314, on food and food products, to exclude from the exemption meals, soft drinks and candy sold to inmates of correctional facilities operated under the authority of or under contract with the State of Texas or a political subdivision of the state. Senate Bill 833—effective July 1, 1995 Amended Section 151.328 to exempt purchases by a person with a Sales and Use tax permit of aircraft used in flight instruction approved by the Federal Aviation Administration (FAA) and provided under the supervision of an FAA-certified flight instructor. Exempted parts and labor as well as machinery, tools, supplies, and equipment exclusively used to repair, remodel or maintain flight-training aircraft, engines or component parts of the flight-training aircraft. The exemption includes tangible property that is permanently affixed or attached as a component part of the flight-training aircraft or that is necessary for the normal operation of the aircraft and is pumped, poured or otherwise placed in the aircraft. Exempted supplies used exclusively in the repair, remodeling or maintenance of aircraft, aircraft engines, or component parts for a certificated or licensed carrier. Provided an exemption for materials or substances necessary for the normal operation of aircraft and pumped, poured or otherwise placed in an aircraft used by carriers. House Bill 1611—effective July 1, 1995 Amended Section 151.329 to exempt materials and supplies purchased by a person providing stevedoring services for a ship or vessel that is operating exclusively in foreign or interstate coastal commerce if the supplies are loaded aboard the vessel and remain on the vessel when it departs. House Bill 467—effective Oct. 1, 1995 Amended Section 151.331 to exempt natural gas, electricity and other fuels used or consumed predominately in the repair, maintenance or restoration of rolling stock. House Bill 1583—effective July 1, 1995 Amended Section 151.347 to exempt lawn care or landscaping services provided by a person who is self-employed if the service provider earned no more than a total of $5,000 from his or her lawn care or landscaping business during the previous four calendar quarters. Increased the limit for receipts for lawn care or landscaping services provided by a person younger than 18 to a total of $5,000 or less for landscaping or lawn care during the last four calendar quarters. Texas Comptroller of Public Accounts – January 2019 200 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 2065—effective Sept. 1, 1995 Amended Section 151.429, on tax refunds for enterprise projects, to allow for the refund of tax paid by an enterprise project on labor to remodel or rehabilitate a structure in an enterprise zone. Also allowed a project to claim a refund on electricity and natural gas it purchased and used in the normal course of business in the enterprise zone. Changed the definition of a “new permanent job” from at least 1,040 hours of employment a year to at least 1,820 hours of employment a year. Senate Bill 1629—effective Aug. 26, 1995 Amended Section 151.429(h) to extend the time during which a qualified hotel project can receive a rebate, refund or payment of the Sales and Use tax paid or collected by the hotel or by businesses located in the hotel to 10 years after the hotel opens from seven years. House Bill 596—effective Oct. 1, 1995 Added a new Section 151.321 to allow certain qualifying college and university student organizations to hold a single, one-day, tax free fund-raising sale each month. Senate Bill 982—effective Sept. 1, 1995 Amended Section 151.006, on sales for resale, to authorize a purchaser to give a properly completed resale certificate to a Texas seller if acquiring a taxable item for the purpose of selling, leasing or renting the item in Mexico in the normal course of business. Amended Section 151.152, on resale certificates, to require that a resale certificate issued by a purchaser engaged in business in Mexico show the purchaser’s Mexican federal identification number in addition to other information required. Amended Sections 151.027 and 111.006, on confidentiality of tax information, to allow the Comptroller to share information with a Mexican tax official. Senate Bill 737—effective Oct. 1, 1995 Added Section 151.353 to exempt certain court reporting services whether the service is provided as a paper transcript, audio or video tape or in a computer readable format. Excluded from the exemption are charges for copies of transcripts (paper, diskettes, and video or audio tapes) sold to a person who is not a participant in the suit. Senate Bill 1190—effective Sept. 1, 1995 Amended the provisions of Section 151.310 that require most non-profit hospitals to provide a prescribed level of charity care in order to retain their Sales and Use tax exemptions. The amendments allow hospital systems to elect to satisfy charity care standards on a system-wide basis rather than on an individual-facility basis as previously required. The amendments also provide that a hospital will be in compliance with the charity-care standards if it has been designated as a “Medicaid disproportionate share” hospital in either of its two previous fiscal years or during the current fiscal year. 1997 The 75th Legislature, Regular Session House Bill 92—effective Sept. 1, 1997 Created two new chapters in the Local Government Code authorizing, among other items, voters in cities and/or counties to create community venue districts and to impose a local sales and use tax for the construction, renovation, operation or maintenance of a sports stadium or other approved facility. The maximum sales and use tax rate is 0.5 percent, to be imposed in increments of 1/8th percent. [It is possible that enacting a Sales and Use tax under this new law would require either reducing the rate of one or more other local sales and use taxes (to prevent the total local sales and use tax rate from exceeding 2 percent) or repealing an existing local Sales and Use tax.] Texas Comptroller of Public Accounts – January 2019 201 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Senate Bill 226—effective May 19, 1997 Provided for the creation of Defense Economic Readjustment Zones. Businesses designated as defense readjustment projects are eligible for Sales and Use tax refunds, on certain purchases, of $2,500 for each new permanent job or job retained. A firm would not be able to receive more than $250,000 in refunds annually. House Bill 1855—effective Oct. 1, 1997 Amended Section 151.318 to state that the exemption for tangible personal property used in the manufacturing process is limited to property used directly in the process and that makes or causes a chemical or physical change in the product being manufactured for sale or in an intermediate or preliminary product that becomes a part of the product being manufactured for sale. The bill clarified that intraplant transportation equipment—specifically including piping and conveyor systems—is taxable. House Bill 1445—effective Sept. 1, 1997 Clarified that a totalisator service—a service used by racetracks to process wagering information—is data processing for the purposes of the Sales and Use tax. Senate Bill 862—effective Sept. 1, 1997 and Oct. 1, 1997 Defined telephone prepaid calling cards as tangible personal property, effective Sept. 1, 1997. Amended the exemption for certain tax-free fundraising functions to limit the exemption to items costing $5,000 or less, effective Oct. 1, 1997. This bill also clarified numerous other Sales and Use tax issues, including an exemption from tax on gas and electricity used by companies doing certain defense and security-related contract work on behalf of the U.S. government or foreign governments, effective Sept. 1, 1997. Senate Bill 1—effective July 1, 1997 Included in Chapter 151 a provision to allow manufacturers to claim a Sales and Use tax exemption for water conservation equipment purchased to reduce water use and wastewater flow volumes from the manufacturing operation; to reuse and recycle wastewater streams generated within the manufacturing operation; or to treat wastewater from another industrial or municipal source to replace existing freshwater sources in the manufacturing operation. House Bill 2157—effective Oct. 1, 1997 Allowed a credit to resellers of tickets for amusement services for the Sales and Use tax paid on the original purchase of the ticket. Various bills were enacted relating to local government sales and use taxation, including Senate Bill 1674 (effective Sept. 1, 1997), which authorized the creation of library districts and the imposition of a sales and use tax not to exceed 0.5 percent; and House Bill 758 (effective May 20, 1997), which allowed hospital districts to impose sales taxes in additional increments of 1/8th percent, up to 2 percent. 1999 The 76th Legislature, Regular Session House Bill 652—effective July 1, 1999 Amended Section 151.313 to provide an exemption for the purchase of an adjustable utensil that facilitates independent eating. The specialized utensil must be purchased for use by an individual who does not have full use or control of his or her hands or arms. House Bill 871—effective July 1, 1999 Added Section 151.343 to exempt the sale of an animal by a non-profit animal shelter, including the acceptance of a fee for adoption. Defined “animal shelter” as a facility that keeps or legally impounds stray, homeless, abandoned or unwanted animals. Texas Comptroller of Public Accounts – January 2019 202 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 2146—effective July 1, 1999 Amended Section 151.305 to increase the threshold for exemption for toys designed primarily for children, food (but not beverages), candy and chewing gum—if they are sold through a coin-operated bulk vending machine. Increased threshold to 50 cents or less, from 25 cents or less. House Bill 3623—effective Oct. 1, 1999 Amended Section 151.0048 to exclude surveying as a taxable real property service if purchased by the owner of real property as a part of the improvement of the real property with a new structure to be used as a residence or other improvement immediately adjacent to the new structure and used in the residential occupancy of the structure. To expire on Oct. 1, 2001. Senate Bill 441 Internet Access—effective Oct. 1, 1999 Added Section 151.325 to exempt up to the first $25 of the monthly charge for Internet access from tax, regardless of the billing period used by the service provider or whether the Internet access service is bundled with another service. Information and Data Processing Services—effective Oct. 1, 1999 Added Section 151.351 to exempt 20 percent of the value of information and data processing services from tax. As a result, tax will be owed on 80 percent of taxable data processing and information services. Over-the-Counter Drugs and Medicines—effective April 1, 2000 Amended Section 151.313 to exempt from tax over-the-counter drugs that are labeled with a national drug code issued by the federal Food and Drug Administration. Also exempted from tax blood glucose monitoring test strips. Three-Day Tax-Free Clothing Holiday—effective June 3, 1999 Added Section 151.326 to provide an annual three-day period during which purchases of certain clothing and footwear become exempt from tax. The tax holiday will be held every year on the first Friday, Saturday and Sunday of Aug. In Aug. 1999, the exemption applied to both state and local sales and use taxes. In subsequent years local taxing entities will have the choice of participating in the holiday. During the tax holiday, certain clothing and footwear priced at less than $100 will be exempt from the Sales and Use tax. Customers will receive the exemption on individual items, regardless of the total amount of purchase. Clothing and footwear used primarily for athletic activities or for protective wear will not be eligible for the exemption unless the athletic wear is commonly worn other than while participating in an athletic activity, such as tennis shoes, baseball caps and jogging suits. Senate Bill 977—effective Oct. 1, 2001 Amended several sections of Chapter 151 (including Section 151.316) to exempt a variety of items, including seedlings, certain chemicals and machinery and equipment used in the production of timber. On Oct. 1, 2001, state and local sales and use taxes will be due on the covered items, but the purchaser will be entitled to a credit for or a refund of a portion of the taxes paid. Initially, the amount of the credit or refund will be 33 percent of the amount of tax paid, increasing to 50 percent and then 75 percent. On Jan. 1, 2008, the relevant items will become completely exempt. 2001 The 77th Legislature, Regular Session House Bill 82—effective Oct. 1, 2001 Amended Section 151.321 to provide an exemption for the first $5,000 of otherwise taxable receipts each calendar year from fund raising sales or auctions made by qualified university and student organizations that are tax exempt. This exemption is in addition to the one-day, tax-free sale or auction such organizations may have each calendar month. Texas Comptroller of Public Accounts – January 2019 203 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 1098—effective Sept. 1, 2001 Amended 151.052 to allow a purchaser of printed materials, delivered by the printer to the postal service or mail fulfillment house, to issue an exemption certificate to the printer in lieu of tax. The materials must be distributed by mail to individual recipients, both in state and out of state, other than the purchaser. House Bill 1845—effective June 15, 2001 Created Chapter 142 of the Tax Code to authorize the Comptroller to represent Texas in national efforts to simplify the states’ sales tax structures. The intent of such efforts is to modernize Sales and Use tax administration and substantially reduce the burden on taxpayers. House Bill 2686—effective Sept. 1, 2001 Amended Section 151.429 and 151.4291 for enterprise projects designated after Sept. 1, 2001, to increase the sales tax refund for each new or retained job to $5,000 from $2,000. Expanded the list of qualifying taxable items for refund to include any tangible personal property and any taxable services used by the project in the zone. Senate Bill 2 and Senate Bill 312—effective Sept. 1, 2001 Added Section 151.355 to exempt various types of equipment and services used for rainwater harvesting, water recycling, water use reduction, desalination, precipitation enhancement, regional water and wastewater systems; and by partnerships of public and private entities to construct or operate water supply or wastewater systems. Senate Bill 5—effective Sept. 1, 2001 Added Section 151.0515 to include a surcharge of 1 percent on the purchase, rental or lease of off-road, heavy-duty, diesel-powered construction equipment. Senate Bill 1125—effective Sept. 1, 2001 and Oct. 1, 2001 Made several changes to Chapter 151 to establish more stringent criminal penalties for failure to remit tax collected, selling taxable items without a sales tax permit and failure to file a sales tax report (effective Sept. 1, 2001). Added Section 151.3021 to exempt certain wrapping and packaging supplies when purchased by laundries or dry cleaners and used to package items that have been pressed, dry cleaned or laundered (effective Oct. 1, 2001). Added Section 151.3181 to change the calculation used to determine taxable divergent use for tangible personal property qualifying for manufacturing exemptions (effective Oct. 1, 2001). Clarified numerous other tax issues, including: • charges for the installation of tangible personal property are part of the taxable sales price; • the sale or use of a taxable item in an electronic form instead of on physical media does not alter the item’s tax status; • temporary services may be taxable unless the services are provided by a temporary employment service as defined by Section 93.001 of the Labor Code; • services provided by a staff leasing company may be taxable unless the staff leasing company is licensed under Chapter 91 of the Labor Code or exempt from the licensing requirements of that chapter; • the sale of motion picture, video, and audio masters is not subject to tax; • the exemption for equipment used by a manufacturer in the quality-control process is limited to equipment used to test the product manufactured for sale; and • photographic props are not taxable when sold to professional photographers or printers. Senate Bill 1497—effective Aug. 1, 2002 Added Section 151.061 to base the tax on mobile telecommunications service upon the location where the customer’s use primarily occurs. Texas Comptroller of Public Accounts – January 2019 204 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Various bills were enacted related to local sales and use taxation. These bills included House Bill 445 (effective June 11, 2001), to allow cities to impose a 0.25 percent sales and use tax for street maintenance; and House Bill 1096 (effective June 16, 2001), to allow a city with a population of 25,000 to 550,000 and a city with a population over 1.9 million to create a fire control, prevention and emergency medical services district and impose a local sales and use tax of 0.125 percent to 0.5 percent (in 0.125 percent increments). 2003 The 78th Legislature, Regular Session House Bill 109—effective Jan. 1, 2004 Added Section 151.1575 to allow custom brokers to issue export documentation after examining a passport or other acceptable foreign photo ID; to require the purchaser to produce the property and original receipt; and to require the purchaser to certify in writing the applicable export information, such as place and time of export. Amended Section 151.157 to require brokers to post a $5,000 bond and pay an annual license fee of $300 for each place of business from which they will issue export certifications and file quarterly reports. Amended Section 151.158 to set export certification stamps at $1.60 each. House Bill 2425—effective June 20, 2003 Amended Section 151.318 to exempt materials used to construct or build a pharmaceutical biotechnology cleanroom and equipment used in the cleanroom when installed during the construction of a new facility with a value of at least $150 million, provided the construction began after July 1, 2003 and before Aug. 31, 2004. House Bill 2425—effective June 20, 2003 Amended Section 151.011 to make tangible personal property, such as a raw material, that is purchased and processed out of state subject to use tax when used in Texas after processing or manufacturing. (Not applicable to printed materials.) House Bill 2425—effective July 1, 2004 Added Section 151.103 to require a retailer to collect and remit applicable local use taxes regardless of whether the retailer is engaged in business in a particular local taxing jurisdiction. House Bill 2425—effective Oct. 1, 2003 Amended Section 151.314 to exempt as food products fruit drinks containing more than 50 percent juice and to exempt individual-sized bakery items, such as doughnuts and cookies sold without plates or eating utensils even if sold in quantities of five or less. Amended Section151.314 to require retailers who mix two or more food ingredients for sale by weight or volume (e.g., salad) as a single item to collect sales tax unless the mixture has raw animal foods (eggs, fish, meat or poultry) that require cooking by the consumer per FDA recommendations. (The provision does not include bakery items and food that is only cut, repackaged or pasteurized.) House Bill 2425—effective July 1, 2004 Amended Sections 321.203 and 323.203 to require retailers providing taxable services to collect local (city, county, special purpose district or transit) tax based on the location at which the service is performed or otherwise delivered to the purchaser. House Bill 2519—effective Jan. 1, 2004 Added Section 151.3105 to exempt qualifying bingo equipment when purchased by an organization licensed to conduct bingo under Chapter 2001 of the Occupations Code. The organization must be exempt under IRS Section 501(c)(3), (4), (8), (10), or (19). Texas Comptroller of Public Accounts – January 2019 205 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 2005 The 79th Legislature, Regular Session House Bill 1531—effective Sept. 1, 2005 Amended Section 1707.331 of the Occupations Code to exempt telematics service providers from licensing as investigation companies, thereby making their basic charges no longer subject to taxation as security services. Instead, telematics service providers (e.g., electronic stolen vehicle tracking services) were required to pay an annual fee of $2,500 to the Texas Department of Public Safety and meet certain business practice and procedure guidelines. Because telematics services also include telecommunications and information services, which are subject to sales tax, the taxability of monthly charges will depend upon the specific services provided to the customer. House Bill 3140—effective June 18, 2005 Amended Section 1702.002 of the Occupations Code to state that the term “alarm system” does not include a telephone entry system, an operator for opening or closing a residential or commercial gate or door or an accessory used only to activate a gate or door if not connected to an alarm system. The bill stipulated that if services are exempted from private security regulation, they are not taxable security services within the meaning of Tax Code Sections 151.0075 and 151.0101(a)(14). Senate Bill 568—effective Sept. 1, 2005 Added Section 1702.331 to the Occupations Code to define “personal emergency response systems” as systems installed in a residence and monitored by an alarm system company that will dispatch aid when a person signals a medical or personal emergency, but are not burglar or fire alarms. The bill stipulated that companies selling, installing, servicing, monitoring or responding to personal emergency response system services must be licensed by the Health and Human Services Commission and that such services are not subject to sales and use tax as security services. However, because personal emergency response system services can also include telecommunications services that are subject to sales tax, the taxability of monthly charges will depend upon the specific services provided to the customer. 2007 The 80th Legislature, Regular Session House Bill 4—effective June 15, 2007 Amended Section 151.355, concerning water-related exemptions, to exempt tangible personal property used to process, reuse or recycle wastewater for use in fracturing work at an oil or gas well. House Bill 11—effective Sept. 1, 2007 Added Section 151.433 to allow the Comptroller, when it is considered necessary for the administration of the limited sales, excise and use taxes, to require wholesalers and distributors of beer, wine or malt liquor to electronically file a monthly report of sales made to retailers during the previous month. [Similar provisions were added regarding sales of cigarettes (Section 154.212) and cigars and tobacco products (Section 155.105).] House Bill 12—effective June 15, 2007 Amended Section 151.801 to allocate the proceeds from the collection of taxes imposed by Chapter 151 on the sale, storage or use of sporting goods between the Parks and Wildlife Department and the Texas Historical Commission. House Bill 373—effective July 1, 2007 Amended Section 151.304 to expand the definition of an “occasional sale” to exempt from sales tax the sale of personal property by an individual who first purchased the property for personal or family use, as long as total receipts from such sales do not exceed $3,000 in a calendar year. To qualify for the exemption, the seller cannot hold or otherwise be required to hold, a sales tax permit. The expanded exemption applies to online sales of items through an auction, but not to sales made through the use of an auctioneer, broker or factor. This exemption does not apply to sales of motor vehicles. House Bill 387—effective June 15, 2007 Repealed Section 151.349, which provided sales tax exemptions for taxable items sold to, leased by or used by any corporation established by the Texas National Research Laboratory Commission. Texas Comptroller of Public Accounts – January 2019 206 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 1459—effective Sept. 1, 2007 Amended Section 151.0103 to exclude from the definition of a telecommunications service telephone calls made by payment of coins through pay telephones, thereby exempting such calls from sales tax. The amendment clarified that the exemption only applies to the portion of the pay telephone call that is paid by coin, so that calls made at a pay phone, but paid for by other means, such as a credit card, remain taxable. House Bill 2833—effective Sept. 1, 2007 Amended Occupations Code Section 1702.102 to require locksmith companies and private security consultant companies to be licensed by the Private Security Bureau of the Texas Department of Public Safety as security service contractors, beginning with new and renewal registrations filed on and after Jan. 1, 2008. Services for which a license is required under Occupations Code Section 1702.102 are subject to sales tax as security services under Tax Code Section 151.0075. As such, locksmiths and security service consultants not previously required to be permitted have had to apply for a sales tax permit and start collecting and remitting sales tax on their services beginning Jan. 1, 2008. House Bill 3314 and House Bill 3319—effective June 15, 2007 (Each) amended Section 151.326 to move the sales tax holiday for clothing and footwear from the first weekend in August to the third weekend in August; added Section 151.327 to insert backpacks under $100 for use by a student in a public or private elementary or secondary school in the list of items that may be purchased tax-free during the sales tax holiday provided for under Section 151.326. House Bill 3319—effective Sept. 1, 2007 Amended Section 151.0048 to exclude from the definition of “real property service” a service performed by a landman that is necessary to negotiate or secure land or mineral rights for acquisition or trade. A landman may still provide taxable information services. Amended Section 151.006 to include in the definition of “sale for resale” the transfer of a “wireless voice communication device” (i.e., cell phone) when the phone is an integral part of a taxable service, regardless of whether the provider of the phone is the provider of the taxable service, as long as the payment for the service is a condition for receiving the phone. Amended Section 151.056 to require ready-mix concrete contractors that manufacture ready mix concrete for construction purposes and incorporate it into realty to separately state the price of the concrete and individually invoice the customer for each yard sold. The ready-mix concrete contractor is also required to collect and remit tax on the concrete used or consumed. The tax rate is applied to the greater of the actual invoice price or the fair market value of the concrete on jobs other than public works projects. Repealed Section 151.103 (d), which required a retailer to collect any applicable local use taxes regardless of whether the retailer was engaged in business in a particular local taxing jurisdiction into which a taxable item was shipped or delivered. Repealed Section 151.202 (c), which required a person desiring to be a seller in this state to agree to collect any applicable local use taxes regardless of whether the retailer was engaged in business in a particular local taxing jurisdiction into which a taxable item was shipped or delivered. Amended Section 151.313 to clarify the definition of a drug or medicine and to exempt from sales tax over-thecounter drugs or medicines that are required to be labeled with a “drug facts” panel according to regulations of the federal Food and Drug Administration. Amended Section 151.3162 to exempt seedlings of trees grown for commercial timber from the sales tax. Amended Section 151.318 (b)(3) dealing with pharmaceutical biotechnology cleanrooms. Prior to Sept. 1, 2007, Tax Code Section 151.318 exempted biotechnology cleanrooms and equipment only for new facilities with a value Texas Comptroller of Public Accounts – January 2019 207 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base of at least $150 million on which construction began after July 1, 2003, and before Aug. 31, 2004. This bill deletes the minimum $150 million value requirement and the requirement that construction begin before Aug. 31, 2004. Amended Section 151.328 to clarify that an aircraft is exempt if sold in Texas to a person for use and registration in another state or nation before any use of the aircraft is made in Texas other than flight training in the aircraft or the transportation of the aircraft out of this state. Also amended Section 151.328 to change the term “flight simulator” to “flight simulation training device” and update references to the relevant Federal Aviation Administration regulations. House Bill 3693—effective Sept. 1, 2007 Added Section 151.333 to create a sales tax holiday for certain energy efficient products purchased during Memorial Day weekend. There are no limits on the number of items purchased during this new sales tax holiday. The products qualifying for the exemption are air conditioners (priced under $6,000), clothes washers, ceiling fans, dehumidifiers, dishwashers, incandescent or fluorescent light bulbs, programmable thermostats and refrigerators (priced under $2,000) that are designated as Energy Star products by the federal government. House Bill 3694—effective June 15, 2007 Amended Section 151.429, dealing with the tax refunds for enterprise projects, to increase the number of designated projects allowed in a year from 85 to 105 and to allow for the carryover of any unused designations to following years. The amendment also expands the items subject to refund to include all taxable items purchased for use at a qualified business site related to the project. Other changes streamline the program and modify language to correspond to federal terminology. Senate Bill 12—effective June 8, 2007 Amended Section 151.0515, dealing with the Texas Emissions Reduction Plan Surcharge, to change the expiration date of the section to Aug. 31, 2013. 2009 The 81st Legislature, Regular Session House Bill 469—effective Sept. 1, 2009 Amended Section 151.334 to exempt certain components of tangible personal property used in connection with sequestration of carbon dioxide. Components of tangible personal property used in connection with an advanced clean energy project that are installed to capture, transport, inject or prepare for transportation or injection of carbon dioxide from an anthropogenic emission source are exempted from tax if the carbon dioxide is sequestered in Texas as part of an enhanced oil recovery project under conditions that create a reasonable expectation that at least 99 percent of the carbon dioxide will remain sequestered from the atmosphere for at least 1,000 years. House Bill 693—effective June 19, 2009 Amended Section 1951.003 of the Occupations Code, exempting the following activities from structural pest control services: • use of a raptor to control or relocate other birds; • physical removal of pests or their habitat while cleaning a chimney; • use of a live trap to remove an animal from a residence, agricultural operation or business structure; • mechanical removal of weeds or other vegetation from sewers, drainage systems, water bodies, etc.; or • installation, maintenance or use of a non-pesticidal barrier to remove or prevent infestation by nuisance animals. House Bill 1801—effective July 1, 2009 Amended Section 151.327 to add “school supplies,” as that term is defined in the Streamlined Sales and Use Tax Agreement, to the list of items qualifying for exemption from Texas state and local sales and use taxes during the Texas Comptroller of Public Accounts – January 2019 208 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base annual sales tax holiday in Aug.. Items must be priced at less than $100 and purchased for use by a student in an elementary or secondary school. House Bill 2730—effective Sept. 1, 2009 Amended Section 1702.002 of the Occupations Code to specify electronic access gates do not qualify as alarm systems if they are not connected to a computer or data processor that records or archives the voice, visual image or identifying information of the user. House Bill 3144—effective Sept. 1, 2009 Amended 151.316 to provide an exemption for tangible personal property incorporated into a structure that is used for the disposal of poultry carcasses in accordance with Section 26.303 of the Water Code. The bill codified the existing exemption for aircraft used exclusively for crop dusting and expanded the exemption to cover not only the aircraft and parts, but also other equipment and machinery used exclusively in an agricultural aircraft operation, as defined by 14 C.F.R. Section 137.3. The bill also codified the exemptions for tires and automobile repair parts used on motor vehicles and equipment used exclusively on a farm or ranch. Senate Bill 636—effective Sept. 1, 2009 Added Section 151.0565 to provide that qualifying destination management companies will be considered consumers and not sellers of items provided to customers under certain qualifying “Destination Management Service” contracts. A qualifying destination management company is a corporation or LLC that receives at least 80 percent of its annual revenue from destination management services; is not a caterer or wedding planner; does not own entertainment venues; spends at least 1 percent of its gross receipts on marketing Texas destinations and recruits at least 80 percent of its clientele from outside of the state. A qualifying contract must contain at least three of the following services: • transportation management; • booking and managing entertainers; • coordination of tours or recreational activities; • meeting, conference or event registration; • meeting, conference or event staffing; • event management; or • meal coordination. Senate Bill 958—effective Sept. 1, 2009 Amended Section 151.328 relating to aircraft exemptions by adding Section (a)(5) to exempt from the sales tax the purchase of an aircraft exclusively for an agricultural use, as defined by Section 23.51 of the Property Tax Code and used for: • predator control; • wildlife or livestock capture; • wildlife or livestock surveys; • census counts of wildlife or livestock; • animal or plant health inspection services; or • crop dusting, pollination or seeding. Texas Comptroller of Public Accounts – January 2019 209 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Senate Bill 1199—effective Sept. 1, 2009 Amended Section 151.310 to specify that for purposes of obtaining a refund or claiming a credit for sales tax, a religious, educational or public service organization is not considered exempt from sales tax before the earlier of the date the organization applied for the exemption with the Comptroller or the date of assessment of the organization’s tax liability by the Comptroller as a result of an audit. The amendment also entitles a seller to a credit or reimbursement of sales tax equal to the amount of sales tax refunded to a purchaser when the purchaser receives a full or partial refund of the sales price of a returned taxable item. Senate Bill 1929—effective Sept. 1, 2009 Added new Chapter 485A to the Government Code and new Section 151.3415 to the Tax Code to provide for the creation of “media production development zones” and “qualified media production locations” in Texas, as well as sales tax exemptions for “qualified persons” who construct, maintain, expand, improve or renovate a “media production facility” at a qualified media production location. “Qualified persons” will be able to claim an exemption on the sale, lease or rental of a taxable item used for the construction, maintenance, expansion, improvement or renovation of a media production facility at a qualified media production location; to equip a media production facility at a qualified media production location; or for the renovation of a building or facility at a qualified media production location that is to be used exclusively as a media production facility. 2011 The 82nd Legislature, Regular Session House Bill 268—effective Sept. 1, 2011 Added Section 151.1551 to require a person claiming an exemption from sales tax on the purchase of certain items used in the production of agricultural and timber products to obtain a registration number issued by the Comptroller. Beginning Jan. 1, 2012, the registration number must be provided on an agricultural or timber production exemption certificate issued to a seller. The bill also amended Section 151.316 to create a new exemption from sales and use tax for tangible personal property incorporated into or attached to a free-stall dairy barn or a dairy structure used solely for maternity purposes that is located on a commercial dairy farm and is used or employed exclusively for the production of milk. House Bill 2810 also enacted this exemption. House Bill 1841—effective June 17, 2011 Added Section 151.108 to create a definition for internet hosting and to specify that a person whose only activity in this state is as a user of internet hosting is not engaged in business in Texas. House Bill 2810—effective Sept. 1, 2011 Amended Section 151.316 to create a new exemption from Sales and Use tax for tangible personal property incorporated into or attached to a free-stall dairy barn or a dairy structure used solely for maternity purposes that is located on a commercial dairy farm and is used or employed exclusively for the production of milk. House Bill 268 also enacted this exemption. House Bill 3182—effective Sept. 1, 2011 Amended Section 151.308 to provide that oilfield portable units, as defined in Tax Code Chapter 152.001(20), are subject to Sales and Use tax rather than motor vehicle or hotel occupancy taxes. An “oil field portable unit” is a bunkhouse, manufactured home, trailer or semi-trailer (other than a travel trailer) designed to be used for temporary lodging or as temporary office space that is used exclusively at any oil, gas, water disposal or injection well site to provide to well site employees, contractors or other workers sleeping accommodations or temporary work space, including office space, which does not require attachment to a foundation or to real property to be functional. Texas Comptroller of Public Accounts – January 2019 210 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Senate Bill 776—effective Sept. 1, 2011 Amended Sections 151.157, 151.1575 and 151.158 to make numerous revisions to the requirements a Texas Licensed Customs Broker must follow when issuing proof of export documentation a purchaser can use to obtain a refund of Texas sales and use tax. Senate Bill 1927—effective June 17, 2011 Amended Section 151.310 to authorize a volunteer firefighter organization that qualifies for a Sales and Use tax exemption under Tax Code Section 151.310(a)(4) to hold 10 tax-free sales or auctions during a calendar year, with each tax-free sale or auction limited to a duration of not more than 72 hours. The new subsection expires Sept. 1, 2014. 2011 The 82nd Legislature, First Called Session Senate Bill 1, Article 3—effective Oct. 1, 2011 Repealed Subchapter F of Tax Code Chapter 111. Texas property owners will no longer be eligible to receive refunds of state sales and use taxes and franchise taxes for paying local school property taxes on property located in reinvestment zones established under Tax Code Chapter 312. The repeal does not affect an eligible person’s right to request a refund of taxes paid prior to Oct. 1, 2011, subject to the statute of limitations, for any calendar year in which the person paid ad valorem taxes to a school district. Senate Bill 1, Article 12—effective Oct. 1, 2011 Amended Section 151.006 to clarify that the sale for resale exemption can be claimed on the purchase of taxable items (i.e., tangible personal property, taxable services) that will be resold as or with a taxable item. The amendment also outlines the requirements that must be met in order to claim the resale exemption on items purchased to be used in the performance of contracts with the federal government and clarifies that a sale for resale does not include a sale of tangible personal property or a taxable service to a purchaser who acquires it for the purpose of performing a non-taxable service, regardless of whether title transfers to the purchaser’s customer. Senate Bill 1, Article 13—effective Sept. 28, 2011 Added the requirement that beginning Aug. 2013, all taxpayers who file monthly sales tax reports and who pay the sales taxes due that month (for the July 2013 reporting period) to the Comptroller by electronic funds transfer (EFT) will be required to submit a one-time prepayment of tax. The amount of the prepayment due will be equal to 25 percent of the amount of sales tax the taxpayer owes for the July reporting period, as reported on the report due Aug. 20, 2013. The taxpayer is required to remit the additional prepayment at the same time as the regular payment for the July sales tax report: on or before Aug. 20, 2013. Taxpayers who submit the prepayment will receive credits for the prepaid taxes when they file the Aug. report in Sept. 2013. Taxpayers who normally prepay, as provided by Tax Code Section 151.424, are not affected by this provision. Notice: Senate Bill 559, 83rd Regular Legislative Session, 2013 repealed this requirement. Senate Bill 1, Article 30—effective Jan. 1, 2012 Amended Section 151.008(b) to provide that the terms “seller” and “retailer” include a person who, by agreement with an owner of tangible personal property, has been entrusted with possession of and authority to sell, lease or rent the property without additional action on the part of the owner. The article also amends Section 151.107 to provide that a “retailer engaged in business in this state” includes a retailer who does the following: • holds a substantial ownership in or is owned in whole or substantial part by, a person who maintains a business location in this state if the retailer sells substantially the same product line and does so under Texas Comptroller of Public Accounts – January 2019 211 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base substantially the same business name as the related retailer or if the facilities or employees of the related person in this state are used to advertise, promote or facilitate sales by the retailer or are used to maintain a marketplace in this state for the retailer, exchanging returned merchandise; or • holds a substantial ownership in or is owned in whole or substantial part by, a person who maintains a distribution center, warehouse or similar location in this state that delivers property sold by the retailer. The new Section 151.107(d) provides that “ownership” includes direct ownership, common ownership and indirect ownership through a parent entity, subsidiary or affiliate; and defines “substantial” to mean a 50 percent ownership interest with the type of ownership (i.e., beneficial, combined voting power, etc.) determined by the type of entity. Senate Bill 1, Article 33—effective Sept. 28, 2012 Amended Section 151.326(a)(2), which specifies the time period for the annual sales tax holiday for clothing, footwear, school supplies and backpacks. 2013 The 83rd Legislature, Regular Session House Bill 78—effective Oct. 1, 2013 Amended Section 151.336 to provide an exemption for the sale of gold, silver or numismatic coins or of platinum, gold or silver bullion. Previously, a sale was exempt if the total sales price of all items sold equaled $1,000 or more. House Bill 697—effective Sept. 1, 2013 Amended Section 151.314(d) to make booster clubs and other school support organizations eligible for the sales tax exemption for food products, meals, soft drinks and candy, if served by their group during a regular school day pursuant to an agreement with the proper school authorities. The bill also exempted food products, meals, soft drinks and candy sold during a school-sponsored or sanctioned event at a concession stand operated by a booster club or other school support organization, if the proceeds benefit the school or school district. House Bill 800—effective Jan. 1, 2014 Added Section 151.3182 to allow a sales and use tax exemption for the purchase, lease or rental of depreciable tangible personal property purchased by a person for direct use in qualified research, as defined in Internal Revenue Code (IRC) Section 41. The depreciable property must have a useful life exceeding one year and must be subject to depreciation either under generally accepted accounting principles (GAAP) or under IRC Section 167 or Section 168. Persons engaged in qualified research may claim a credit for franchise tax instead of the sales tax exemption. House Bill 1133—effective Sept. 1, 2013 Added Section 151.3186 to allow providers of cable television service, internet access service or telecommunications services (and their subsidiaries) to claim a refund for state sales and use taxes paid on the purchase, lease or rental of tangible personal property directly used or consumed in or during the distribution of cable television service; the provision of internet access service; or the transmission, conveyance, routing or reception of telecommunications services. A refund may not be claimed for property used or consumed in providing data processing or information services. This refund does not apply to sales and use taxes imposed by local jurisdictions. Providers, who claim this sales and use tax refund, are excluded from claiming special property tax benefits for economic development on that same tangible personal property under Chapter 313 of the Tax Code. The legislation sets an annual cap of $50 million as the total amount available for refund to all qualified claimants. Each eligible provider will receive a pro rata share of the annual $50 million if the total of all qualifying refunds exceeds the cap. House Bill 1223—effective Sept. 1, 2013 Added Section 151.359 to exempt certain items necessary and essential to the operation of a qualified data center from state sales and use tax. An owner, operator and/or occupant of a data center being specifically constructed or Texas Comptroller of Public Accounts – January 2019 212 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base refurbished in Texas to be used by a single occupant to house servers and related equipment for processing, storage and distribution of data may apply to the Comptroller for certification as a qualifying data center. Owners, occupants and operators of certified data centers will be eligible to claim an exemption on qualified purchases made for 10-15 years following the date of certification, depending on the amount of capital investment made in the center by the owner, operator or occupant, whether individually or jointly. The exemption does not apply to sales and use taxes imposed by local jurisdictions. Data centers with agreements to limit the appraised value of property for property tax under Tax Code Chapter 313 do not qualify for this exemption. House Bill 1712—effective June 14, 2013 Added Section 151.356 to provide a Sales and Use tax exemption for tangible personal property that is exclusively intended to be used or used in an offshore spill response containment system. The bill also exempts services performed on qualifying property from Sales and Use tax. The spill response containment system must be owned or leased by an entity formed primarily for the purpose of designing, developing, modifying, enhancing, assembling, operating, deploying and maintaining an offshore spill response containment system. House Bill 3169—effective Sept. 1, 2013 Amended Section 151.0565 to redefine “destination management services” to mean certain services regardless of whether such services are provided under a qualified destination management services contract. The bill amended Section 151.313 to define “intravenous system” and “hospital bed” and to specify the systems, beds and components of each that qualify for exemption. The bill amended the definition of “newspaper” under Section 151.319 to increase the average daily sales price of a newspaper that qualifies for exemption from $1.50 to $3.00. Senate Bill 485—effective June 14, 2013 Amended Sections 151.326 and 151.327 to adopt a new method for determining the dates of the annual Sales Tax Holiday for clothing, footwear, backpacks and school supplies. The date is now set by determining the first day a Texas school district may begin classes; counting back 15 days from the first day of school; and identifying the Friday before the 15 days preceding the first day of school. Senate Bill 1151—effective Sept. 1, 2013 Amended Section 151.314 to exempt snack items from sales tax, unless they are sold through a vending machine or in individual-sized portions. Snack items sold through a vending machine or in individual-sized portions are taxable. Snack items are defined to include the following: • breakfast bars, granola bars, nutrition bars, protein bars, sports bars or yogurt bars, unless they are labeled • and marketed as candy; • snack mix and trail mix; • nuts, unless candy-coated; • popcorn; and • chips, crackers or hard pretzels. An individual-sized portion is defined as being labeled as having not more than one serving or, if the package does not specify servings, contains less than 2.5 ounces. Senate Bill 1286—effective Sept. 1, 2013 Changes references from “staff leasing services” to “professional employment services” in Chapters 151 and 171 of the Tax Code. Texas Comptroller of Public Accounts – January 2019 213 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base 2015 The 84th Legislature, Regular Session House Bill 7—effective Sept. 1, 2015 Amended Section 151.0515 to reduce the Texas Emissions Reduction Plan Surcharge imposed on the sale, lease or rental of off-road, heavy-duty diesel equipment from 2 percent to 1.5 percent. House Bill 157—effective Sept. 1, 2015 Amended provisions of Local Government Code Chapters 334, 363, 504 and 505, and provisions of Tax Code Chapters 321 and 327 to allow municipalities to set their sales and use tax rate at any rate that is an increment of one-eighth of 1 percent as long as the rate would not exceed the maximum 2 percent combined local tax rate provided by Tax Code Section 321.101(f). The adoption and changes in rates of municipal sales and use taxes must be approved by voters. The amendments apply to the municipal sales and use tax and to city sales and use taxes imposed for street maintenance, venue projects, property tax relief, economic development and crime control and prevention. House Bill 1841—effective Oct. 1, 2015 Amended Section 151.0039 to exclude services performed on behalf of an insured by a person licensed under Insurance Code Chapter 4102 (public insurance adjusters) from the definition of insurance services. As a result, insurance services provided by a public insurance adjuster are not subject to sales and use tax. House Bill 1905—effective Sept. 1, 2015 Amended the definition of “snack items” in Section 151.314 to mean the following: • breakfast bars, granola bars, nutrition bars, sports bars, protein bars or yogurt bars, unless labeled and marketed as candy; • snack mix or trail mix; • nuts, but not including pine nuts or candy-coated nuts; • popcorn; • chips, crackers, hard pretzels, pork rinds or corn nuts; • sunflower seeds or pumpkin seeds; • ice cream, sherbet or frozen yogurt; and • ice pops, juice pops, sorbet or other frozen fruit items containing not more than 50 percent fruit juice by volume. Snack items sold in portions labeled as having not more than one serving or containing less than 2.5 ounces are taxable. Food products served, prepared or sold for immediate consumption by a restaurant, lunch counter, cafeteria, deli or similar types of businesses are taxable. The bill provides that a grocery store or convenience store containing one of these types of locations will be considered such a place of business only in regard to sales made from that location within the store. House Bill 2313—effective Sept. 1, 2015 Added Section 151.3051 exempting the sale of tangible personal property through a vending machine if the following conditions are met: • the sale is made by a nonprofit organization under Section 501(c)(3) Internal Revenue Code of 1986; • the machine is owned by the nonprofit organization; and • the machine is stocked and maintained by individuals with special needs as part of an independent life skills and education program operated by the nonprofit organization. Texas Comptroller of Public Accounts – January 2019 214 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 2358—effective June 16, 2015 Added Tax Code Section 151.0241 and Business & Commerce Code Chapter 112 exempting an out-of-state business entity that enters Texas at the request of an in-state business entity under a mutual assistance agreement or that is an affiliate of an in-state business entity, from Texas licensing and registration requirements when its business in Texas is limited to performing disaster- or emergency-related work during a disaster response period. The out-ofstate entity will not be required to collect and remit Texas sales and use tax on its sales of taxable items in Texas nor on its purchases of taxable items that are sold or transferred to its customers during a disaster response period. An out-of-state entity will not be considered engaged in business in Texas if the entity’s physical presence in Texas is solely for performing disaster- or emergency-related work during a disaster response period. The out-of-state business entity is not required to register with the Secretary of State or to file a tax report with or pay taxes or fees to Texas or a political subdivision of Texas when its business in Texas is limited to performing disaster- or emergency-related work during a disaster response period. The out-of-state entity will not owe use tax on equipment brought into Texas used only by the entity to perform disaster- or emergency-related work during the disaster response period and removed from Texas by the entity following the disaster response period. The out-of-state entity will owe sales tax on its purchases of taxable items for its own use. The bill does not provide an exemption for taxable items sold by the out-of-state business described by the bill. Purchasers are still responsible for use tax on any taxable items purchased from such an out-of-state business entity. House Bill 2507—effective Sept. 1, 2015 Amended Section 151.3185 to exempt tangible personal property sold to licensed digital audio broadcasting stations, if the property is necessary to provide digital audio broadcast service. House Bill 2712—effective June 10, 2015 Amended Section 151.317 and added Section 151.3595 to exempt certain items necessary for operating a qualifying large data center project from state and local sales and use tax. An owner, operator or occupant of a data center comprising at least 250,000 square feet in one or more buildings, located on a single or contiguous parcels of land, that is being specifically constructed or refurbished in Texas to be used by a single occupant to house servers and related equipment for processing, storing and distributing data can apply to the Comptroller for certification as a qualifying large data center project. For certification, a qualifying owner, operator or occupant (independently or jointly) must agree to: • make a capital investment of $500 million or more over a five-year period from the date of certification; • create at least 40 permanent, full-time qualifying jobs in the county where the data center is located that are unrelated to moving jobs from another Texas county; and • contract for at least 20 megawatts of transmission capacity for operating the large data center project. A “qualifying job” must pay at least 120 percent of the county average weekly wage in the county where the job is based. Owners, occupants and operators of certified data centers can claim an exemption on qualified purchases made for 20 years following the date of certification. A large data center’s certification can be revoked if the owner, operator or occupant (individually or jointly) fails to make the amount of capital investment or create the number of jobs required within the initial five-year time frame. If the certification is revoked, tax will be due on tax-free purchases made before the revocation. Data centers with agreements to limit the appraised value of property for property tax under Tax Code Chapter 313 do not qualify for this exemption. Texas Comptroller of Public Accounts – January 2019 215 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Senate Bill 31—effective May 28, 2015 Added Section 151.310(c-1) to allow volunteer firefighter departments and volunteer firefighter departments providing emergency services that qualify for a sales tax exemption under Tax Code Section 151.310(a)(4) to hold 10 tax-free sales or auctions during a calendar year. If two or more exempt organizations jointly hold an auction or sale, it will count toward the 10 tax-free sales or auctions allowed for each organization. Each tax-free sale or auction cannot last more than 72 hours. Senate Bill 100—effective Sept. 1, 2015 Amended Section 151.429 to remove the cap placed on capital investments for qualified enterprise projects. An enterprise project can qualify for a tax refund based on its capital investment. The bill removes the cap of $149,999,999 placed on capital investment that results in a refund of $2,500 per job. Enterprise projects that have capital investments of $150 million or more will receive refunds for new permanent jobs. The refund per job has been changed to capture only new permanent jobs. The bill added the definition of a half enterprise project and provides that the maximum sales tax refund a half enterprise project may receive is $125,000. Senate Bill 140—effective Sept. 1, 2015 Amended Sections 151.1551 and 151.316 to provide a sales and use tax exemption for telecommunications services exclusively provided or used for navigating machinery and equipment exclusively used on a farm or ranch for the following purposes: • building or maintaining roads; • building or maintaining water facilities; or • producing agricultural products to be sold in the regular course of business. Purchasers must provide sellers a Texas Agricultural Sales and Use Tax Exemption Certificate, including an Agricultural and Timber Registration Number and expiration date, to claim the exemption. Senate Bill 755—effective June 10, 2015 Added Section 151.006(d) to expand the definition of “sale for resale” to include a sale of a computer program to a provider of internet hosting services who sells a license to use the program to an unrelated user of Internet hosting services, provided that the reseller does not retain a right to use the program under that license. A sale for resale is exempt from sales and use tax. Senate Bill 853—effective June 1, 2015 Added Section 151.202(c) to provide an electronically filed sales tax permit application complies with the signature requirement under Tax Code Section 151.202(b). Senate Bill 904—effective Sept. 1, 2015 Added Section 151.3565 to provide a temporary sales and use tax exemption for certain emergency preparation items sold during a three-day period beginning on the Saturday before the last Monday in April and ending on the last Monday in April. Items that qualify for the exemption include certain portable generators, hurricane shutters, ladders, portable self-powered light sources, fuel containers, radios, batteries, smoke detectors, fire extinguishers and first aid kits. Senate Bill 1356—effective Oct. 1, 2015 Added Section 151.3335 to provide a temporary sales and use tax exemption for certain water-conserving products and for products with a “WaterSense” label from the U.S. Environmental Protection Agency. The items are exempt when sold during a three-day period beginning on the Saturday before the last Monday in May (Memorial Day) and ending on Memorial Day. Texas Comptroller of Public Accounts – January 2019 216 Sources of Revenue APPENDIX C (continued) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base Senate Bill 1396—effective Sept. 1, 2015 Added Tax Code Chapter 163, Sales and Use Taxation of Aircraft. It defines “certificated or licensed carriers” as carriers authorized under Parts 121, 125, 133 and 135 of the Federal Aviation Regulations. The bill provides that the exemption for aircraft under Tax Code Section 151.328(a)(1) applies regardless of whether the aircraft is acquired by purchase, lease or rental. The bill also provides a unique “sale for resale” definition for purchases of aircraft. A sale for resale includes a sale to a purchaser for the purpose of leasing, renting or reselling the aircraft to another person. The sale for resale does not have to be for the sole purpose of leasing or renting, provided that more than 50 percent of the departures are under the operational control of a lessee. Operational control is defined by Federal Aviation Regulations. The consideration for a lease or rental does not have to be in the form of cash payments and can be fixed, variable or periodic. Liability for tax on divergent use does not apply to aircraft purchased under the sale for resale exemption. Use tax does not apply to aircraft brought into Texas for the sole purpose of being completed, repaired, remodeled or restored. There is also no presumption of taxable use when an aircraft is brought into Texas, if the aircraft was not purchased directly from a seller. The bill provides that tax is not due on certain aircraft after out-of-state use. Specifically, the bill exempts from use tax any aircraft purchased outside of the state that is predominantly used outside of Texas for more than a year before being brought into Texas. An aircraft is predominantly used outside of Texas if more than half of its departures are from locations outside of Texas. For transactions involving aircraft, transactions between related persons are taxable or not taxable to the same extent as transactions between unrelated persons. When a person pays tax on the purchase of an aircraft, use by a related entity is not also subject to tax. Use by a related entity of a purchaser is not taxable, if tax was paid by the purchaser or, if subject to certain exceptions, the purchase was exempt. The use of an aircraft by a fractional owner of the aircraft is not a taxable transaction. 2017 The 85th Legislature, Regular Session House Bill 3101—effective Sept. 1, 2017 Amended Alcoholic Beverage Code Sections 11.38 and 101.46 and added Alcoholic Beverage Code Chapter 48A. The bill allows the sale of alcoholic beverages on certain passenger buses and provides that the preparation and sales of such beverages by the holder of a passenger bus beverage permit are exempt from the following: • taxes imposed under the Alcoholic Beverage Code; and • sales and use taxes imposed under Tax Code Chapter 151. A wholesaler’s permit holder can sell liquor to a qualifying passenger bus company tax free as a sale for resale and is not required to obtain a resale certificate. House Bill 4038—effective Sept. 1, 2017 Amended Tax Code Section 151.359. The bill expands the definition of “qualifying job” for purposes of certification as a qualifying data center to include a new employment position staffed by a third-party employer if there is a written contract between the third-party employer and a qualifying owner, qualifying operator, or qualifying occupant stating the employment position is permanently assigned to an associated qualifying data center. The amended definition applies to a data center certified as a qualifying data center regardless of whether the certification occurred before June 1, 2017. Texas Comptroller of Public Accounts – January 2019 217 Sources of Revenue APPENDIX C (concluded) Summary of Legislative Changes to the Texas Sales and Use Tax Rate and Base House Bill 4042—effective Sept. 1, 2017 Amended Alcoholic Beverage Code Chapter 53 and Tax Code Section 151.461. The bill removes the term “charitable” in reference to temporary auction permits issued by the Texas Alcoholic Beverage Commission (TABC) and provides that the TABC may not impose a surcharge for a temporary auction permit. The bill’s provisions allow holders of a temporary auction permit to have more than one auction each calendar year; a person or group of persons who are subject to recordkeeping requirements under Election Code Chapter 254 may be issued a temporary auction permit. House Bill 4054—effective Sept. 1, 2017 Amended Tax Code Section 151.314. The bill defines “bakery” as a retail location that primarily sells bakery items from a display case or counter, predominantly for eating off the premises. It exempts all bakery items sold by a bakery, even if the bakery heats the items for the customer or serves the items with plates or other eating utensils. It also exempts bakery items sold by a retailer (other than a bakery) when the retailer does not provide plates or other eating utensils with the bakery items and does not heat the bakery items. Senate Bill 745—effective Sept. 1, 2017 Transferred Tax Code Section 151.057 (Services by Employees) within the Sales Tax Chapter; re-designated as 151.3503 and amended. The bill redefines the exclusion from tax for services performed by employees as an exemption and specifies when services performed by an employee of a temporary employment service for a host employer are exempt from sales and use tax. To qualify for the exemption, the host employer: • must provide all the equipment and supplies, except for certain personal protection equipment, necessary to perform the service; • cannot rent, lease, purchase, acquire or use the equipment and supplies from the temporary employment service or a related entity that is a member of the service provider’s affiliated group, as that term is defined for franchise tax; and • must have the sole right to supervise, direct and control the work performed by the temporary employee as necessary to conduct the host employee’s business. Senate Bill 1083—effective Jan. 1, 2018 Amended Tax Code Section 151.0039. The bill excludes from taxable insurance services: services performed by a certified public accountancy (CPA) firm, if less than one percent of the firm’s total revenue in the previous calendar year is from insurance services provided in Texas; and, further, services performed on behalf of a CPA firm by an owner of the firm or a member of the firm’s affiliated group, if less than one percent of the owner’s or member’s total revenue in the previous calendar year is from insurance services provided in Texas. Texas Comptroller of Public Accounts – January 2019 218 Sources of Revenue APPENDIX D-1 State Tax Comparisons for 2017 Ranked by Per Capita Tax Collections Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 State Vermont Hawaii Minnesota North Dakota Connecticut New York Massachusetts California Delaware New Jersey Maryland Washington Maine Arkansas Wisconsin Iowa Rhode Island Illinois Pennsylvania Nevada Oregon Michigan Wyoming Kansas West Virginia New Mexico Indiana Kentucky Nebraska Idaho Virginia North Carolina Mississippi Ohio Montana Utah Louisiana Colorado Oklahoma Georgia Alabama South Dakota Tennessee Missouri Arizona South Carolina Florida Texas New Hampshire Alaska State Tax Collections (in millions) $ 3,128 7,029 25,595 3,465 16,346 79,678 27,518 155,632 3,589 32,326 21,600 23,998 4,233 9,516 18,133 9,755 3,267 37,979 37,853 8,625 11,915 28,629 1,650 8,174 5,092 5,776 18,052 11,908 5,103 4,511 22,213 26,855 7,783 30,306 2,654 7,833 11,105 13,198 8,569 22,419 10,418 1,829 13,894 12,496 13,889 9,829 40,218 53,613 2,497 1,190 Per Capita State Tax Collections $ 5,015 4,924 4,590 4,587 4,555 4,014 4,012 3,936 3,731 3,590 3,569 3,240 3,168 3,168 3,129 3,101 3,083 2,967 2,956 2,877 2,876 2,874 2,847 2,806 2,804 2,766 2,708 2,673 2,658 2,627 2,623 2,614 2,608 2,599 2,527 2,525 2,371 2,354 2,180 2,150 2,137 2,103 2,069 2,044 1,979 1,956 1,917 1,894 1,859 1,608 All State, Total $ 942,880 n.a. All State, Mean $ 18,858 $ 2,919 All State, Median $ 11,506 $ 2,785 Note: The per capita measure uses 2017 population estimated from the Census. Source: Federation of Tax Administrators; Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 219 Sources of Revenue APPENDIX D-2 State Tax Rate Comparisons – Calendar Year 2018 Sales and Use Rate Sales and Use Rank Motor Vehicle Sales/Excise Rate Alabama 4.00 40 2.00 45 0.675 40 3.0¢-40.5¢/10 cigars; 2¢-8¢/ounce tobacco/snuff Alaska 0.00 46 0.00 46 2.00 15 75% wholesale price Arizona 5.60 27 5.60 25 2.00 15 22.01¢-$2.18/10 cigars; 22.3¢/ounce tobacco/snuff Arkansas 6.50 9 6.50 9 1.15 34 68% manufacturer’s price California 7.25 1 7.25 1 2.87 9 Colorado 2.90 45 2.90 44 0.84 38 Connecticut 6.35 12 6.35 12 4.35 1 50% wholesale price Delaware 0.00 46 0.00 46 2.10 13 30% wholesale price Florida 6.00 16 6.00 16 1.339 30 85% wholesale price tobacco/snuff Georgia 4.00 40 7.00 2 0.37 48 2.5¢/10 little cigars; 23% wholesale price other cigars 10% wholesale price tobacco Hawaii 4.00 40 4.00 38 3.20 5 Idaho 6.00 16 6.00 16 0.57 44 40% wholesale price Illinois 6.25 13 6.25 13 1.98 20 36% wholesale price Indiana 7.00 2 7.00 2 0.995 37 24% wholsale price Iowa 6.00 16 5.00 28 1.36 29 50% wholesale price Kansas 6.50 9 6.50 9 1.29 32 10% wholesale price Kentucky 6.00 16 6.00 16 1.10 35 15% wholesale price Louisiana 4.45 38 4.45 35 1.08 36 8%-20% manufacturer’s price cigars 20%-33% manufacturer’s price snuff/smoking tobacco Maine 5.50 28 5.50 26 2.00 15 $2.02/ounce chewing tobacco/snuff 20% wholesale price smoking tobacco/cigars Maryland 6.00 16 6.00 16 2.00 15 30% wholesale price tobacco/snuff 70% wholesale price cigars Massachusetts 6.25 13 6.25 13 3.51 4 40% wholesale price Michigan 6.00 16 6.00 16 2.00 15 32% wholesale price Minnesota 6.875 6 6.50 9 3.04 7 95% wholesale price Mississippi 7.00 2 5.00 28 0.68 39 15% manufacturer’s price Missouri 4.225 39 4.225 36 0.17 50 10% manufacturer’s price Montana 0.00 46 0.00 46 1.70 23 50% wholesale price Nebraska 5.50 28 5.50 26 0.64 41 20% wholesale price Nevada 6.85 7 6.85 6 1.80 21 30% wholesale price New Hampshire 0.00 46 0.00 46 1.78 22 65.08% wholesale price New Jersey 6.625 8 6.625 8 2.70 10 30% wholesale price New Mexico 5.125 31 3.00 42 1.66 25 25% product value New York 4.00 40 4.00 38 4.35 1 North Carolina 4.75 34 3.00 42 0.45 46 12.8% wholesale price North Dakota 5.00 32 5.00 28 0.44 47 28% wholesale price cigars/tobacco 16¢-60¢/ounce chew tobacco/snuff Ohio 5.75 26 5.75 24 1.60 26 17% wholesale price State Motor Vehicle Sales/Excise Rank Cigarette Cigarette ($ per pack of 20) ($ per pack of 20) Rate Rank Other Tobacco Products Rate / Base 65.08% wholesale price 40% manufacturer’s price 50% wholesale price large cigars 70% wholesale price tobacco/snuff 75% wholesale price Texas Comptroller of Public Accounts – January 2019 220 Sources of Revenue APPENDIX D-2 (continued) State Tax Rate Comparisons – Calendar Year 2018 Gasoline Gasoline Diesel Fuel Diesel Fuel Beer Excise Tax Beer Excise Tax Wine Excise Tax Wine Excise Tax Spirits Excise Tax Spirits Excise Tax (cents per gallon) (cents per gallon) (cents per gallon) (cents per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) Rate Rank Rate Rank Rate Rank Rate Rank Rate Rank Alabama 19.00 43 20.75 43 0.533 6 1.70 5 ** - Alaska 8.95 50 8.95 50 1.07 2 2.50 1 12.80 2 Arizona 19.00 43 27.00 30 0.16 32 0.84 21 3.00 23 Arkansas 21.80 38 22.80 38 0.234 23 0.75 23 2.50 26 California 49.855 2 69.155 2 0.20 26 0.20 47 3.30 20 Colorado 23.25 35 21.75 40 0.08 46 0.277 44 2.281 30 Connecticut 25.00 31 43.90 7 0.24 22 0.72 24 5.40 10 Delaware 23.00 37 22.00 39 0.263 19 1.63 6 4.50 13 Florida 33.496 13 34.371 12 0.48 7 2.25 2 6.50 4 Georgia 27.30 26 30.50 21 0.323 14 1.514 7 3.785 17 Hawaii 18.50 46 18.50 47 0.93 3 1.38 11 5.98 7 Idaho 33.00 15 33.00 15 0.15 35 0.45 35 ** - Illinois 35.10 10 37.60 8 0.231 24 1.39 10 8.55 3 Indiana 46.70 4 49.00 4 0.115 40 0.47 34 2.68 25 Iowa 30.70 20 32.50 17 0.19 28 1.75 3 ** - Kansas 25.03 30 27.03 29 0.18 29 0.30 40 2.50 26 Kentucky 26.00 29 23.00 36 0.081 45 0.50 32 1.92 32 Louisiana 20.925 39 20.925 41 0.403 11 0.757 22 3.028 22 Maine 31.405 18 31.87 19 0.35 13 0.60 28 ** - Maryland 35.49 8 36.24 9 0.09 43 0.40 37 1.50 33 Massachusetts 26.743 27 26.743 31 0.106 41 0.55 29 4.05 15 Michigan 42.70 5 44.10 6 0.203 25 0.511 31 ** - Minnesota 28.60 24 28.60 25 0.148 36 0.30 40 5.035 12 Mississippi 18.40 47 18.40 48 0.427 8 0.35 38 ** - Missouri 17.32 48 17.32 49 0.06 49 0.42 36 2.00 31 Montana 32.25 17 30.00 23 0.139 38 1.022 13 ** - Nebraska 28.90 23 28.30 26 0.31 15 0.95 16 3.75 18 Nevada 23.805 34 27.75 28 0.16 32 0.70 26 3.60 19 New Hampshire 23.825 33 23.825 34 0.30 16 0.30 40 ** - New Jersey 37.15 6 44.25 5 0.12 39 0.875 19 5.50 9 New Mexico 18.875 45 22.875 37 0.41 10 1.703 4 6.057 6 New York 33.277 14 31.477 20 0.14 37 0.30 40 6.435 5 State North Carolina 35.35 9 35.35 11 0.617 5 0.997 15 ** - North Dakota 23.025 36 23.025 35 0.16 32 0.50 32 2.50 26 Ohio 28.00 25 28.00 27 0.18 29 0.32 39 ** - Texas Comptroller of Public Accounts – January 2019 221 Sources of Revenue APPENDIX D-2 (continued) State Tax Rate Comparisons – Calendar Year 2018 Sales and Use Rate Sales and Use Rank Motor Vehicle Sales/Excise Rate Cigarette Cigarette ($ per pack of 20) ($ per pack of 20) Rate Rank Oklahoma 4.50 36 4.50 34 2.03 14 $1.20/10 cigars 60-80% factory list price snuff/tobacco Oregon 0.00 46 Pennsylvania 6.00 16 0.00 46 1.33 31 65% wholesale price 6.00 16 2.60 11 $0.55/ounce tobacco (little cigars taxed as cig.) Rhode Island 7.00 2 7.00 2 4.25 3 South Carolina 6.00 16 5.00 28 0.57 44 5% manufacturer’s price South Dakota 4.50 36 4.00 38 1.53 27 35% wholesale price Tennessee 7.00 2 7.00 2 0.62 42 6.6% wholesale price TEXAS 6.25 13 6.25 13 1.41 28 1.0¢-15.0¢/10 cigars; $1.22/ounce tobacco/snuff Utah 4.70 35 4.70 33 1.70 23 86% manufacturer’s price Vermont 6.00 16 6.00 16 3.08 6 Virginia 5.30 30 4.15 37 0.30 49 Washington 6.50 9 6.80 7 3.025 8 95% wholesale price West Virginia 6.00 16 6.00 16 1.20 33 12% wholesale price Wisconsin 5.00 32 5.00 28 2.52 12 71% manufacturer’s price Wyoming 4.00 40 4.00 38 0.60 43 20% wholesale price National Average 5.060 State 4.888 Motor Vehicle Sales/Excise Rank 1.731 Other Tobacco Products Rate / Base 80% wholesale price 92% wholesale price or $20-$40/10 cigars, based on price $2.57/ounce tobacco/snuff 10% manufacturer’s price n/a Texas Comptroller of Public Accounts – January 2019 222 Sources of Revenue APPENDIX D-2 (concluded) State Tax Rate Comparisons – Calendar Year 2018 Gasoline Gasoline Diesel Fuel Diesel Fuel Beer Excise Tax Beer Excise Tax Wine Excise Tax Wine Excise Tax Spirits Excise Tax Spirits Excise Tax (cents per gallon) (cents per gallon) (cents per gallon) (cents per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) (dollars per gallon) Rate Rank Rate Rank Rate Rank Rate Rank Rate Rank Oklahoma 20.00 41 20.00 45 0.403 11 0.719 25 5.565 8 Oregon 34.00 12 34.00 14 0.084 44 0.67 27 ** - Pennsylvania 58.70 1 75.20 1 0.08 46 ** - ** - Rhode Island 34.12 11 34.12 13 0.106 41 1.40 9 5.40 10 South Carolina 20.75 40 20.75 43 0.768 4 0.90 18 2.72 24 South Dakota 30.00 22 30.00 23 0.274 17 0.93 17 3.93 16 Tennessee 26.40 28 25.40 32 1.287 1 1.21 12 4.40 14 TEXAS 20.00 41 20.00 45 0.194 27 0.204 46 2.40 29 Utah 30.05 21 30.05 22 0.413 9 ** - ** - Vermont 31.22 19 32.00 18 0.265 18 0.55 29 ** - Virginia 16.80 49 20.80 42 0.256 21 1.514 7 ** - Washington 49.519 3 49.519 3 0.261 20 0.868 20 14.274 1 West Virginia 35.70 7 35.70 10 0.177 31 1.000 14 ** - Wisconsin 32.90 16 32.90 16 0.065 48 0.25 45 3.25 21 Wyoming 24.00 32 24.00 33 0.019 50 ** - ** - State National Average 28.718 30.506 0.289 0.859 **Control states, where the government controls all sales. Products can be subject to ad valorem mark up and excise taxes. Sources: Texas Comptroller of Public Accounts Sales and Use Tax: Federation of Tax Administrators (FTA), Tax Foundation, assorted state government websites. Rates as of mid-year 2018. Motor Vehicle Sales and Use/Excise Tax: Florida Department of Revenue, FTA, Tax Foundation, assorted state government websites. Rates as of mid-year 2018. Cigarette Tax: Centers for Disease Control, U.S. Dept. of Health and Human Services; assorted state government websites. Rates as of Sept. 30, 2018. Other Tobacco Product Taxes: FTA. Rates as of January 1, 2018. Gasoline & Diesel Tax: Energy Information Agency, U.S. Department of Energy; FTA; assorted state government websites. Rates as of July 1, 2018. Beer, Wine, & Distilled Spirits Taxes: FTA. Rates as of January 1, 2018. Texas Comptroller of Public Accounts – January 2019 223 4.578 Sources of Revenue APPENDIX D-3 State Corporate Business Tax Comparisons as of January 2018 State Rate Alabama 6.500% Alaska $0-$24,999: 0% $25,000-$48,999: 2% $49,000-$73,999: $480 plus 3% $74,000-$98,999: $1,230 plus 4% $99,000-$123,999: $2,230 plus 5% $124,000-$147,999: $3,480 plus 6% $148,000-$172,999: $4,920 plus 7% $173,000-$197,999: $6,670 plus 8% $198,000-$221,999: $8,670 plus 9% $222,000 or more: $10,830 plus 9.4%.  Arizona 4.9% Arkansas $0–3,000: 1% $3,001–6,000: 2% $6,001–11,000: 3% $11,001–25,000: 5% $25,001–100,000: 6% over $100,000: 6.5% California 8.84% Colorado 4.63% Connecticut Greater of: Comment Mandatory Combined Reporting No Three-factor formula with double-weighted sales factor.  4.5% on capital gains. 12.6% personal holding company tax on apportioned income. Yes Evenly weighted three-factor formula.  $100 minimum tax. Yes Three-factor formula with double-weighted sales factor or enhanced sales factor formula 90-5-5 (sales, property, payroll).  No Three-factor formula with double-weighted sales factor.  Yes One-factor sales formula.  Yes One-factor sales formula.  Financial service companies pay a tax equal to greater of: 7.5% of net income or $250.00. Yes One-factor gross receipts formula.  Banks and trust companies pay bank franchise tax. $0-$20,000,000: 8.7% ; $20,000,001$25,000,000: 6.7% ; $25,000,001-$30,000,000: 4.7% ; $30,000,001-$650,000,000: 2.7% ; $650,000,001 or more: 1.7%. Banks and trust companies may elect to pay an alternative franchise tax. No Three-factor formula with enhanced sales factor formula 60-20-20 (sales, property, payroll). One-factor sales formula being phased-in. $800 minimum tax. 10.84% rate on banks and financial corporations. 7.5% of net income; 3.1 mills per dollar of capital holding; $250 minimum tax. 10% surcharge imposed through tax year 2018. Apportionment Delaware 8.7% Florida 5.5% Alternative minimum tax rate is 3.3%. No Three-factor formula with double-weighted sales factor.  Georgia 6.0% No One-factor sales formula.  Hawaii $0–25,000: 4.4% $25,001–100,000: 5.4% less $250 $100,001 or more: 6.4% less $1,250; or Tax on capital gains is imposed at rate of 4%.  7.92% franchise tax, in lieu of corporate income tax, on financial institutions. Yes Evenly weighted three-factor formula.  Idaho 7.4% $20 minimum tax Yes Three-factor formula with double-weighted sales factor.  Illinois 9.5%. Rate composed of 7.0% corporate income tax plus 2.5% personal property replacement tax. Yes One-factor sales formula.  Texas Comptroller of Public Accounts – January 2019 224 Sources of Revenue APPENDIX D-3 (continued) State Corporate Business Tax Comparisons as of January 2018 State Rate Comment Mandatory Combined Reporting Apportionment Indiana 6.0% 5.75% after June 30, 2018 and before July 1, 2019. 5.5% after June 30, 2019 and before July 1, 2020. 5.25% after June 30, 2020 and before July 1, 2021. 4.9% after June 30, 2021. No One-factor sales formula.  Iowa $0–25,000: 6% $25,000–100,000: 8% minus $500 $100,000–250,000: 10% minus $2,500 $250,001 or more: 12% minus $7,500 5% franchise tax on financial institutions. No One-factor sales formula.  Kansas 4% plus 3% surtax on taxable income over $50,000 2.25% privilege tax on net income of financial institutions, plus a surtax (2.125% for banks and 2.25% for trust companies and savings and loan associations) for net income in excess of $25,000. Yes Evenly weighted three-factor formula.  Kentucky $0–50,000: 4% $50,001–100,000: 5% $100,001 or more:  6%  Financial institutions subject to a bank franchise tax at a rate of 1.1% on net capital. No Three-factor formula with double-weighted sales factor.  Louisiana $0–25,000: 4% $25,001–50,000: 5% $50,001–100,000: 6% $100,001–200,000: 7% $200,001 or more: 8% No One-factor sales formula.  Maine $0–25,000: 3.5% $25,001–75,000: $875 + 7.93% $75,001–250,000: $4,840 + 8.33% $250,001 or more: $19,418 + 8.93% Yes One-factor sales formula.  Financial institutions franchise tax: 1% of net income, plus 8¢ per $1,000 of assets attributable to state sources; or 39¢ per $1,000 of assets attributable to state sources. Maryland 8.25% No Three-factor formula with double-weighted sales factor.  Massachusetts Greater of: $2.60 per $1,000 on taxable tangible property or net worth plus 8% on income attributable to state sources; or $456 fixed dollar minimum tax Yes Three-factor formula with double-weighted sales factor.  Michigan 6% Yes One-factor sales formula.  Minnesota 9.8%, plus minimum tax ranging from $0 to $9,770 based on property, payroll, and sales or receipts attributable to state sources Yes One-factor sales formula.  Mississippi $0–5,000: 3% $5,001–10,000: 4% $10,001 or more: 5% No Formula varies by industry. If none specified, then one-factor sales formula.  Missouri  6.25% No Evenly weighted three-factor formula.  Montana  6.75% or taxpayers with $100,000 or less of gross sales within the state may pay 0.5% on such sales Yes Evenly weighted three-factor formula.  Nebraska $0–100,000: 5.58% Over $100,000: $5,580 plus 7.81% Yes One-factor sales formula.  SB 2858, passed in 2016, provides that, beginning in 2018, the 3% rate will be phasedout over 5 years. Additionally, the same bill phases-out the corporate franchise tax over 9 years. $50 minimum tax. Texas Comptroller of Public Accounts – January 2019 225 Sources of Revenue APPENDIX D-3 (continued) State Corporate Business Tax Comparisons as of January 2018 State Rate Comment Mandatory Combined Reporting Apportionment Nevada Commerce Tax. Similar to the Washington B&O tax, this gross receipts tax has 27 possible tax rates varying according to NAICS code. Rates range from a low of 0.00051 to the highest rate of 0.00331. A standard deduction of $4 million from gross receipts, prior to any calculations, is applicable. Taxation is on each single entity which is subject to the tax. Some items are excluded from gross receipts, such as revenue received from certain affiliated entities (there is no consolidation in reporting). Some other excluded revenue are: proceeds from a variety of financial transactions, bad debts, and proceeds associated with certain governmental healthcare programs. No No explicit formula; tax is on Nevada receipts. Statute provides situsing guidelines, specific to different types of receipts. Alternative method of situsing by taxpayer may be allowed. New Hampshire 7.9% of taxable business profits for gross income over $50,000 For taxable periods ending on or after Dec. 31, 2018. For taxable periods ending on or after Dec. 31, 2016 and before Dec. 31, 2018, business profits tax rate is 8.2% and business enterprise tax rate is 0.72%. Yes Three-factor formula with double-weighted sales factor.  $2,000 minimum tax for members of affiliated or controlled group with total payroll of $5 million or more. No One-factor sales formula.  For taxable years beginning on or after January 1, 2018. No One-factor sales formula.  Yes One-factor receipts formula.  No One-factor sales formula.  0.675% of business enterprise value base for gross income over $208,000 or enterprise value base over $104,000.  New Jersey Greater of: $0–$50,000: 6.5%  $50,001–$100,000: 7.5% $100,001 or more: 9%; or alternative minimum assessment, if applicable;  or fixed dollar minimum tax based on gross receipts Fixed dollar minimum tax: $0-$99,999 gross receipts: $500 $100,000-$249,999 gross receipts: $750 $250,000-$499,999 gross receipts: $1,000 $500,000-$999,999 gross receipts: $1,500 $1,000,000 gross receipts or more: $2,000. Fixed dollar minimum tax (NJ S corporations): $0-$99,999 gross receipts: $375 $100,000-$249,999 gross receipts: $562.50 $250,000-$499,999 gross receipts: $750 $500,000-$999,999 gross receipts: $1,125 $1,000,000 gross receipts or more: $1,500.  New Mexico $0-$500,000: 4.8% Over $500,000: $24,000 plus 5.9% of excess over $500,000 New York Greater of: business income base of 6.5% (0% for qualified in-state manufacturers, 4.875% for qualified emerging technology companies (QETCs)); capital tax base of 0.1% (0.085% for qualified in-state manufacturers and QETCs) per dollar of allocated capital (up to $350,000 for qualified in-state manufacturers and QETCs or $5 million for other taxpayers); or fixed dollar minimum tax based on receipts attributable to state sources. Fixed dollar minimum tax: ranges from $25 (if state receipts are not more than $100,000) to $200,000 (if state receipts are over $1 billion). Small business taxpayers: 6.5%.  North Carolina 3.0% Texas Comptroller of Public Accounts – January 2019 226 Sources of Revenue APPENDIX D-3 (continued) State Corporate Business Tax Comparisons as of January 2018 State Rate North Dakota $0–$25,000: 1.41% $25,001–50,000: 3.51% Over $50,000: 4.31% 3.5% additional surtax for water’s edge combined reporting groups Ohio Commercial Activity Tax (CAT). 0.26% on gross receipts over $1 million. Annual minimum tax, on the first $1 million of gross receipts, also applies and is assessed according to firm size: $150,000-$1 million: $150 over $1 million-$2 million: $800 over $2 million-$4 million: $2,100 over $4 million: $2,600.  Comment Mandatory Combined Reporting Financial Institutions Tax (FIT). Greater of: 8 mills (.008) on the first $200 million in apportioned total equity capital, 4 mills (.004) on apportioned total equity capital greater than $200 million and less than  $1.3 billion, and 2.5 mills (.0025) on apportioned total equity capital equal to or greater than $1.3 billion; or $1,000. Apportionment Yes Three-factor formula with enhanced sales factor formula 75-12.5-12.5 (sales, property, payroll). Optional one-factor sales formula phasing-in for tax year 2019 and beyond. Yes No general apportionment formula; tax is on Ohio gross receipts. Oklahoma 6% No Evenly weighted three-factor formula.  Oregon Greater of: 6.6% on first $1 million or fraction thereof, 7.6% on taxable income over $1 million; or fixed dollar minimum tax based on Oregon sales. Yes One-factor sales formula.  Fixed dollar minimum tax: $0-$499,999: $150 $500,000-$999,999: $500 $1,000,000-$1,999,999: $1,000 $2,000,000-$2,999,999: $1,500 $3,000,000-$4,999,999: $2,000 $5,000,000-$6,999,999: $4,000 $7,000,000-$9,999,999: $7,500 $10,000,000-$24,999,999: $15,000 $25,000,000-$49,999,999: $30,000 $50,000,000-$74,999,999: $50,000 $75,000,000-$99,999,999: $75,000 $100,000,000 or over: $100,000.  Pennsylvania 9.99% No One-factor sales formula.  Rhode Island  Greater of: net income tax of 7%; or minimum tax of $400 Yes One-factor sales formula.  South Carolina 5% 4.5% rate on banks. No One-factor sales formula.  South Dakota Does not impose a corporate business tax — — — Tennessee 6.5% No Three-factor formula with tripleweighted sales factor. Texas Franchise Tax. 0.75% for most entities; 0.375% for qualifying entities in retail or wholesale trade. 0.331% for entities with $20 million or less in total (unapportioned) revenue and electing to use the E-Z computation. Taxable entities pay on a firm’s Texasapportioned margin. The term “margin” is defined as total revenue less the greater of: cost of goods sold, total compensation, 30% of total revenue, or $1 million. Yes One-factor gross receipts formula.  Utah 5% $100 minimum tax Yes One-factor sales formula.  Vermont $0–$10,000: 6% Minimum tax equal to the following: $75 for small farm corporations; $300 for corporations with $2 million or less in gross receipts; $400 for corporations with gross receipts over $2 million; $750 for corporations with gross receipts over $5 million. Yes Three-factor formula with double-weighted sales factor.  $10,001–25,000: $600 + 7% Over $25,001: $1,650 + 8.5% Texas Comptroller of Public Accounts – January 2019 227 Sources of Revenue APPENDIX D-3 (concluded) State Corporate Business Tax Comparisons as of January 2018 State Rate Comment Mandatory Combined Reporting Apportionment Virginia 6% Telecommunications companies: Greater of tax using corporate rate or 0.5% minimum tax on gross receipts. Electric suppliers: Greater of tax using corporate rate or 1.45% minimum tax on gross receipts. No Three-factor formula with double-weighted sales factor.  Washington Business and Occupation Tax. A gross receipts tax with multiple rates; rates vary by the reporting firm’s industry. Rates range from a low of 0.00138 to the highest rate of 0.00484. Seventeen tax classifications and associated tax rates span the range of taxable business activities. Taxation is on each single entity which is subject to the tax. Generally, there are no deductions from the B&O for labor,  materials, or other costs of doing business; some exemptions and small deductions (e.g., bad debts and trade discounts) are allowed. Several tax credits are available; some major credits: high technology credit, small business  credits, and credit for hiring unemployed veterans. No No explicit formula; tax is on Washington  receipts. West Virginia 6.5% Yes Three-factor formula with double-weighted sales factor.  Wisconsin 7.9% $25 up to $9,800 economic development surcharge if gross receipts are $4 million or more. Yes One-factor sales formula.  Wyoming Does not impose a corporate business tax — — — Note: Six states—Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming—do not have a corporate income tax. Of those, four—Nevada, Ohio, Texas, and Washington—have alternative corporate business taxes. South Dakota and Wyoming have no state corporate business tax. Sources: CCH, Inc.; Federation of Tax Administrators; Tax Foundation; Tax Policy Center, Brookings Institution/Urban Institute; assorted state government websites; Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 228 Sources of Revenue APPENDIX E State Professional Fees Detail as of Fiscal 2018 Occupation Accountants Description The board may charge fees to a person who practices public accountancy. Certified Public Accountant certificate is $250, including a reciprocal certificate. An initial license and the biennial renewal fee is $250. For late renewals under 90 days, the fee is 1/12 times the normal renewal fee. For 91 days to one year it is twice the fee. Over one year, but less than two, is 3 times the fee. An additional $10 fee is paid with the license fee for the 5th Year Accounting Students Scholarship Program. Origin Date Legal Cites Collecting Agencies Deposit Funds 1915 by the 34th Leg. R.S. TEX. OCC. CODE ANN. ch. 901 457 - Texas State Board of Public Accountancy An account in the Texas Treasury Safekeeping Trust Company License for a firm is set by the board, not to exceed $25 per employee. The board may charge examination fees only to cover the administrative costs of the exams. It may charge up to $100 for filing an application for examination. The board may charge up to $50 for transferring exam credits to another jurisdiction and up to $100 for receiving credits from another jurisdiction. The board may charge a firm up to $200 per peer review performed. Acupuncture Person may not practice acupuncture in this state unless they hold a license issued by medical board. Board shall set and collect fees to cover administration and enforcement. Person may renew unexpired license by paying required renewal fee. If expired for 90 days or less, must pay 1 1/2 times renewal fee, over 90 days but less than 1 year must pay 2 times renewal fee. Expired over one year must re-apply for license. Person may not practice as an acudetox specialist (acupuncture limited to treating alcoholism, substance abuse, chemical dependency) unless certified by board. Temporary license (certification and renewal) fees are also set by the board. 1993 by SB 1062, 73rd Leg. R.S. TEX. OCC. CODE ANN. sec. 205.204, sec. 205.253, sec. 205.103 503 - Texas Medical Board 0001 - General Revenue Fund Air Conditioning and Refrigeration Contractors and Technicians Fees charged for licensing, certification and registration of air conditioning and refrigeration contractors and technicians (persons who design, install, construct, maintain, service, repair, alter or modify any heating, ventilating or air conditioning product, system or equipment). Set by the commission in amounts necessary to defray costs of administration. Fees include original and renewal licenses, examination fees. 1983 by SB 642, 68th Leg. R.S. TEX. OCC. CODE ANN. ch. 1302, sec. 51.4011, sec. 51.407, sec. 51.408 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1937 by the 45th Leg. TEX. OCC. CODE ANN. sec. 1051.704, sec. 1051.705, sec. 1051.305, sec. 1051.351, sec. 1051.651, sec. 1051.353, sec. 1051.355, sec. 1051.357, sec. 1051.452 459 - Texas Board of Architectural Examiners An account with the Texas Safekeeping Trust Company. Application, registration, temporary registration, renewal and certified technician designation fees are charged to persons acting as air conditioning and refrigeration technicians working under contractor’s supervision. New license status of inactive, temporary and emergency, fees set by the department. Architects Fees for each architect before practicing: • Exam application and initial registration fee - as set by board. (1051.704, 1051.705) • Fees for an applicant who holds a license or certificate of registration issued by another jurisdiction - as set by board. (1051.305) • Renewal fees for residents of this state - as set by board plus an additional amount for the examination fee scholarship program. (1051.351, 1051.651) • Renewal fees for non-residents - as set by board. (1051.351, 1051.651) • Renewal fee for certificate of registration that has been expired for 90 days or less - 1-1/2 times required renewal fee. (1051.353) • Renewal fee for certificate of registration that has been expired for over 90 days but less than 2 years - 2 times required renewal fee. (1051.353) • Renewal fee for a person who was registered in this state, moved to another state and is currently licensed or registered and has been in practice in the other state for the two years preceding the date of the application - 2 times required renewal fee. (1051.353) • Inactive status renewal and administrative fee - as set by the board plus an additional amount for the examination fee scholarship program. (1051.355) • Architect Emeritus administrative and renewal fee - as set by the board. (1051.357) The board may assess an administrative penalty up to $5,000 for each violation (1051.452). This penalty is collected under Revenue Object 3770. Texas Comptroller of Public Accounts – January 2019 229 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Asbestos Removal Description Origin Date Legal Cites Collecting Agencies Deposit Funds A person may not engage in removing asbestos, encapsulating asbestos, enclosing asbestos or loading or unloading asbestos from a public building unless licensed. Fees are set by the executive commissioner sufficient to generate amounts necessary to administer and enforce the chapter. 1987 by HB 36, 70th Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 12.032 537 Department of State Health Services 0001 - General Revenue Fund TEX. OCC. CODE ANN. sec. 1954.056, sec. 1954.352, sec. 1954.401 Civil penalties levied for violations cannot exceed $10,000 a day for each violation (collected under Revenue Object 3717). Administrative penalties may not exceed $10,000 a day for each violation (collected under Revenue Object 3770). 5017 - GR Account Asbestos Removal Licensure Assessors For each applicant before engaging in business as professional assessor of ad valorem taxes. Each application must be accompanied by a nonrefundable processing and application fee set by commission and must be renewed annually. An applicant for reinstatement must pay a $250 fee. 1977 by SB 67, 65th Leg. TEX. OCC. CODE ANN. ch. 1151 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Athlete Agent Registration An athlete agent must register before the agent may contact an athlete, either directly or indirectly, while the athlete is located in this state. Fees are set by the secretary in amounts reasonable and necessary to cover the costs of administration. 1987 by SB 20, 70th Leg. 2nd C.S. TEX. OCC. CODE ANN. sec. 2051.108 307 - Secretary of State 0001 - General Revenue Fund Athletic Trainers To record fees for regulating athletic trainers. The commission shall set fees in amounts to cover costs of administration for applications, licenses, renewals, examinations and other programs or activities for which a fee is authorized. 1971 by the 62nd Leg. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 451.152, sec. 451.156 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund A candidate for a license to practice law in Texas shall pay the following fees set by the Supreme Court: • Examination fee, not to exceed $150. • Fee for investigation of moral character and fitness, not to exceed $150. • Application fee for foreign attorneys, not to exceed $700. • Fees for additional services, but the fee for any single additional service is not to exceed $150. • Issuance of an attorney’s license, $10. 1919 by the 36th Leg. TEX. GOV’T CODE ANN. sec. 82.033, sec. 101.021 201 - Supreme Court Retained locally. Registration, exam and renewal fees for auctioneers and associate auctioneers. Examination fees, renewal fees, penalties and fines are set by department rule. • If at Dec. 31 of any year, the balance in the trust fund is less than $350,000, each licensee shall pay a fee in addition to renewal fees, the greater of $50 or a pro rata share of the amount necessary to bring the fund to $350,000. • The department may charge an auction school a reasonable fee for approving the required curriculum. • New license status of inactive, temporary and emergency fees set by the department. 1975 by HB 1925, 64th Leg. TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408, sec. 1802.054, sec. 1802.153 452 - Texas Department of Licensing and Regulation Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Attorneys Auctioneers Texas Comptroller of Public Accounts – January 2019 230 203 - Board of Law Examiners 0001 - General Revenue Fund (1) and (2) 0898 Auctioneer Education and Recovery Trust Fund Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Barbers Description Each person, school or shop, before practicing barbering must be licensed at rates set by department for: • Examination Fee • Examination Fee for 5-year reinstatement • Renewal Fee, barbers, barber technicians, teacher, wig instructor, wig specialist, manicurist, other licensed specialist • Renewal while in the Armed Forces • Barber School Instructor License Fee • Instructor License, original and renewal • Barber Technician Administration Fee • Barber Technician License Fee • Barber School Permit Fee • Barber School Permit Renewal Fee • Temporary Barber Shop Permit Fee • Renewal of Barber Shop Permit • Barber Shop, Specialty Shop, Barber School expired permit more than 30 days - delinquency fee • Duplicate Registrant Certificate • Manicurist Administration Fee • Specialty Shop Permit or Renewal Fee • Wig Specialty Shop Renewal Fee • Manicurist Specialty License • Wig Specialist License • Wig Specialist Administration Fee • Wig Instructor Administration Fee • Wig Salon License • Wig School Permit • Reciprocal certificate, at fee prescribed • Certificate of Registration • Nonrefundable enrollment application fee • Hair Weaving Specialty Certificate • Dual barber and beauty shop license • Mobile shop fees • Inactive, temporary and emergency license fees • Application fee for license or certificate issued to an applicant who holds a license issued by another jurisdiction for barber, barber technician and hair weaving specialist • Mini-barbershop license fees Origin Date 1929 by the 41st Leg. Legal Cites Collecting Agencies Deposit Funds TEX. OCC. CODE ANN. ch. 1602, ch. 1603, ch. 1601, sec. 51.407, sec. 51.408, sec. 51.401, sec. 51.352 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 5081 - GR Account Barber School Tuition Protection Includes civil penalties from $25 to $5,000 per day (collected under Revenue Object 3717). If on Jan. 1 of any year, the amount in the barber school tuition protection account is less than $25,000, the board shall collect a fee from each school by applying a percentage to the school’s renewal fee at a rate to bring the account balance to $25,000. Behavior Analysts Behavior analysts must be licensed by the department. Application, license and renewal fees are set by commission rule to cover costs of administration. SB 589, 85th Leg. R.S. Sept. 1, 2017 TEX. OCC. CODE ANN. sec. 506.154, sec. 506.255, sec. 506.256 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Cemeteries/ Crematories A person may not conduct a cemetery or crematory business in this state unless the owner or operator registers with the commission and pays the fee. The commission by rule shall establish the fee, which must include the cost of regulating registrants, including discipline and complaint investigation. Renewal fees paid annually. If registration expired over 30 days, must re-register. 2001 by HB 3067, 77th Leg. R.S. TEX. OCC. CODE ANN. ch. 651 513 - Texas Funeral Service Commission 0001 - General Revenue Fund To renew a crematory establishment license, a report must be filed with the renewal fee. A $100 per day late fee shall be imposed if the report is not filed. Texas Comptroller of Public Accounts – January 2019 231 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Cemetery Brokers Description (1) Effective Jan. 1, 2014, the Texas Department of Banking may charge a cemetery broker an administration fee not to exceed $100 per year to cover the costs of administration, filing and maintaining the registration (711.046). (2) The Department of Banking shall impose a fee for each examination of a cemetery broker. The amount of the fee must be sufficient to cover costs of the examination (711.084). Origin Date Legal Cites Collecting Agencies Deposit Funds 2013 by HB 52, 83rd Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 711.046, sec. 711.084 451 - Texas Department of Banking Local account with the Texas Safekeeping Trust Company 1991 by SB 837, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 504.053, sec. 504.203, sec. 504.302, sec. 504.058, sec. 504.351 537 Department of State Health Services 0001 - General Revenue Fund 1949 by the 51st Leg. TEX. OCC. CODE ANN. sec. 101.307, sec. 201.303, sec. 201.354, sec. 201.552, sec. 201.603, sec. 201.353 508 - Texas Board of Chiropractic Examiners 0001 - General Revenue Fund These fees are set by the Finance Commission of Texas. Chemical Dependency Counselor To record fees for regulation of chemical dependency counselors and counselor interns. Application, examination, license renewal and other fees are set by the executive commissioner by rule in amounts to recover administration and enforcement. The executive commissioner shall add a surcharge of up to $10 to a license or renewal fee to fund peer assistance programs for chemical dependency counselors, including administrative costs related to programs. Renewal fees for licenses expired 90 days or less are fee plus 1-1/2 times the required renewal fee; over 90 days but less than 1 year are 2 times the required renewal fee. Licenses expired for 1 year or more may not be renewed, and the person must reapply. If previously licensed in Texas and currently licensed in another state and practicing for 2 years, may renew without a reexamination by paying twice the renewal fee. Related Administrative and Civil Penalties • Administrative penalties may be assessed up to $1,000 per violation. Each day is separate violation (collected under Revenue Object 3770). • Civil penalties maybe be assessed between $50 and $500 per day for violation (collected under Revenue Object 3717). Chiropractic Fees charged each person practicing chiropractic set by the board in amounts reasonable and necessary to cover administration costs for: • Annual Registration • Reciprocal license • Examination Fee • Re-examination Fee • Verification of satisfaction of completion of the courses, up to $50 • Verification of licensing requirements • Administration fee for removal of inactive status • Out-of-state applicant • Temporary faculty license and renewal fees set by the board. Initial licenses or registration fee was increased by $5 and renewal by $1, effective Sept. 1, 2003 to fund the Office of Patient Protection within the Health Professions Council (364). Late fees: • 90 days or less, renewal fee equal to 1-1/2 annual renewal fee and required increase; • 91 days - 1 year, renewal fee equal to 2 times annual renewal fee and required increase; • 1 year - 3 years, renewal fee for each year expired plus additional fee equal to renewal fee multiplied by number of years expired (prorated for fractional years) and two times the renewal fee plus the required increase. Board may impose administrative penalties up to $1,000 per day for violation of this Act (collected under Revenue Object 3770). Civil penalties are $1,000 per day (collected under Revenue Object 3717). Texas Comptroller of Public Accounts – January 2019 232 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Origin Date Legal Cites Collecting Agencies Deposit Funds Code Enforcement Officers Occupation A code enforcement officer must pay fees set by the executive commissioner in amounts reasonable and necessary to cover costs of administration and enforcement of the chapter. Description Sept. 1, 1991, by HB 1257, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 1952.052 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Cosmetologists and Hairdressers Each person, school or shop before practicing cosmetology must be licensed at rates reasonable and necessary to administer, as set by the department for: 1935 by the 44th Leg. TEX. OCC. CODE ANN. ch. 1602, ch. 1603, sec. 51.4011, sec. 51.407, sec. 51.408, sec. 51.302 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund TEX. GOV’T CODE ANN. ch. 57, ch. 157, sec. 152.2015 212 - Office of Court Administration 0001 - General Revenue Fund License Fees: • Operator • Manicurist/Esthetician Specialty License • Instructor • Beauty Shop • Specialty Shop • Private Beauty School • Temporary Work Permit for Student • Facialist Specialty License • Temporary (60 day) • Reciprocal • Eyelash Extension • Specialty Certificate • Student Permits • Duplicate License or Certificate • Transcript • Specialty Instructors • Inactive, Temporary and Emergency License • Application fee for license issued to an applicant who holds a license issued by another state. • Mini-salons 0108 - GR Account Private Beauty Culture School Tuition Protection Renewal Fees: All licenses and certificates renewable biennially for a fee set by department, except private beauty school license renewable annually. Renewal of license expired less than five years - pay renewal fee for each year of expiration and delinquent fee set by department. Renewal of license expired more than five years - payment of reinstatement fee set by the department and reapplication for license. Beginning Jan. 1, 1992, additional fee based on a percentage of each school’s renewal fee due with the annual renewal fee. Additional fee collected for three years and deposited to GR Account - Private Beauty School Tuition Protection (No. 0108). On Jan. 1, 1995 or any subsequent year, fee may be collected dependent on the balance in the account, in order to maintain a $200,000 balance in account. The department may impose an administrative penalty against a person licensed or regulated in an amount up to $5,000 per violation (collected under Revenue Object 3770). Court Interpreters A court shall appoint a certified court interpreter or licensed court interpreter if a motion is filed by a party or requested by a witness in a civil or criminal proceeding. The Judicial Branch Certification Commission (attached to OCA) sets license and exam fees to certify interpreters for individuals who can hear but have no or limited English proficiency. 2001 by HB 2735, 77th Leg. R.S. Note: Health and Human Services Commission (529) certifies court interpreters to interpret proceedings for a hearing impaired individual. See Revenue Object 3562 - Health Related Professional Fees: Interpreters for Persons who are Deaf or Hard of Hearing. Texas Comptroller of Public Accounts – January 2019 233 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Origin Date Legal Cites Collecting Agencies Deposit Funds Court Reporters Occupation Each certification as a court reporter/shorthand reporter requires initial certification or registration fee set by Judicial Branch Certification Commission (attached to OCA). A court reporting firm shall register and comply with the same rules applicable to a court reporter. The Commission may enforce by assessing a reasonable fee against a courtreporting firm. The Commission may assess administrative penalties up to $500 per day per violation (collected under Revenue Object 3770). Description 1977 by SB 586, 65th Leg. TEX. GOV’T CODE ANN. sec. 152.2015, sec. 153.052, sec. 154.101, sec. 154.102, sec. 154.107, sec. 154.108 212 - Office of Court Administration 0001 - General Revenue Fund Customs Brokers A customs broker must pay an annual license fee of $300 for each place of business from which the customs broker intends to issue a certificate of export. 1993 by HB 2413, 73rd Leg. R.S. TEX. TAX CODE ANN. sec. 151.157(c) 902 Comptroller - State Fiscal 0001 - General Revenue Fund Dental Applicant fees for exam for license to practice dentistry or dental hygiene and for registration of dental laboratories. Fees are set by board to produce sufficient revenue to cover cost of administration. • Examination Fee • Reciprocal Registration Fee • Annual Renewal Fee • Duplicate License • Duplicate Registration Certificate • Peer Assistance Fee • Provisional License • Dental Assistant X-Ray Certificate • Faculty Member License - Dental or Dental Hygiene Schools • Anesthesia Permit and Fee • Temporary Dental License • Military Limited Volunteer License 1919 by the 36th Leg. TEX. OCC. CODE ANN. sec. 101.307, sec. 256.1015, sec. 257.001, sec. 257.002, sec. 258.155, sec. 264.002, sec. 264.0115, sec. 266.153, sec. 266.154, sec. 266.155 504 - State Board of Dental Examiners 0001 - General Revenue Fund Renewal fees: 90 days or less - 1 1/2 times the normal renewal fee. More than 90 days but less than 1 year - 2 times the normal renewal fee. One year or more - may not renew and must reapply. Administrative penalties up to $5,000 for each violation. Administrative penalties not involving direct patient care up to $1,000 per violation, up to $3,000 in a calendar year (collected under Revenue Object 3770). Initial licenses or registration fee was increased by $5 and renewal by $1, effective Sept. 1, 2003 to fund the Office of Patient Protection within the Health Professions Council (364) The board collects a $55 surcharge on license issuance and renewal. Dental Support Organizations Fees for the registration and corrected registration of dental support organizations. Set by the Secretary of State to recover administration costs of the program. SB 519, 84th Leg. R.S. TEX. BUS. & COMM. CODE ANN. sec. 73.004 307 - Secretary of State 0001 - General Revenue Fund Dietitians To record fees for regulation of dietitians. The commission shall set fees in amounts to cover costs of administration for applications, licenses, renewals, examinations and other programs or activities for which a fee is authorized. 1983 by SB 671, 68th Leg. R.S. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 701.154, sec. 701.252, sec. 701.259, sec. 701.260 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 2007 by HB 3064, 80th Leg. R.S. TEX. INS. CODE ANN. sec. 562.160, sec. 562.161, sec. 7001.006 454 - Texas Department of Insurance 0001 - General Revenue Fund A fee that existed on Sept. 1, 1993 may not be set in an amount less than the amount of that fee on that date. Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Discount Health Care Programs A program operator may not offer a discount health care program unless registered with the department. A program shall pay an initial registration fee of $1,000 and an annual renewal fee up to $500. Administrative penalties (collected under Revenue Object 3770) up to $1,000 per violation or $5,000 for all violations may also be assessed, as well as civil penalties (collected under Revenue Object 3717.) License status of inactive, temporary and emergency, fees set by the department. Texas Comptroller of Public Accounts – January 2019 234 0036 - GR Account - Texas Department of Insurance Operating Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Collecting Agencies Deposit Funds Dog and Cat Breeders Occupation A person who is a dog or cat breeder must hold a license for each facility owned or operated. Application, initial and renewal license and pre-license inspection fees are set by commission to cover costs of administration and enforcement. Description 2011 by HB 1451, 82nd Leg. R.S. Origin Date TEX. OCC. CODE ANN. sec. 802.052, sec. 802.101 Legal Cites 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Dry Cleaning Facilities Fees for operating dry cleaning facility: • $250 for a facility with gross annual receipts of $150,000 or less or designated as nonparticipating under Health and Safety Code 374.104. • $2,500 for a facility with gross annual receipts of more than $150,000. • If dependent entirely on revenue from drop stations, the fee is determined by the commission based on gross receipts. 2003 by HB 136, 78th Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 374.102 582 - Texas Commission on Environmental Quality 5093 - GR Account - Dry Cleaning Facility Release Sept. 1, 2009, by HB 461, 81st Leg. R.S. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 403.103, sec. 403.107 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 2003 by HB. 1487, 78th Leg. R.S. TEX. OCC. CODE ANN. ch. 1305, sec. 51.4011, sec. 51.407, sec. 51.408 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Fees for operating drop stations: • For a drop station with gross annual receipts of more than $150,000, a fee of $750. • Gross annual receipts of $150,000 or less, a fee of $250. • Designated as non-participating under Health and Safety Code 374.104, a fee of $125. A person who owns property or a preceding owner on which a facility or drop station is or was located may participate in GR Account 5093 - Dry Cleaning Facility Release benefits under certain conditions and by paying an annual registration fee of $1,500 and a late fee of $100 if applicable. If a fee is not paid or an application not filed on or before the 30th day after the due date, a penalty up to $50 per day may be assessed. Dyslexia Practitioners and Therapists To record fees for regulating dyslexia practitioners and therapists. The commission shall set fees in amounts to cover costs of administration for applications, licenses, renewals, examinations and other programs or activities for which a fee is authorized. Fees to renew expired licenses are between 1-1/2 to 2 times the normally required renewal fee. Electricians A person may not perform electrical work unless he or she holds an appropriate license. Licenses are required for: • master electrician • master sign electrician • journeyman electrician • journeyman sign electrician • journeyman lineman • journeyman industrial electrician • residential wireman • maintenance electrician • electrical contractor • electrical sign contractor • electrical apprentice • electrical sign apprentice • temporary apprentice • nonresident licenses • emergency electrician Renewals required annually. Fees may also be adopted for administration of continuing education programs. Fees shall be reasonable and necessary to recover costs of administration. New license status of inactive, temporary and emergency fees set by the department. Texas Comptroller of Public Accounts – January 2019 235 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Elevator Inspection Description Executive director may charge a reasonable fee for: registering or renewing an inspector or contractor, applying for a certificate of compliance, filing an inspection report, applying for a waiver or delay, attending a continuing education program and applying to remove equipment from service. Origin Date 1993 by HB 154, 73rd Leg. R.S. License status of inactive, temporary and emergency, fees set by the department. Fire Alarm and Fire Detection Devices Fees for each person or organization before engaging in planning, certifying, leasing, selling, servicing, installing or maintaining fire alarm or fire detection devices or systems. Not to exceed: • Initial and annual renewal registration fee, $500. • Renewal of registration single station devices only, $250. • Branch office registration and renewal, $150. • Fire alarm tech/plan superintendent initial license, $120. • Fire alarm tech/plan superintendent renewal license, $100. • Duplicate certificates, $20. • Initial examination, $30. • Each re-examination, $20. • Training school/testing service approval, $500. • Training school instructor, $50. • Fire alarm technician initial license and each renewal fee, $50. Legal Cites TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408 Collecting Agencies Deposit Funds 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund TEX. HEALTH & SAFETY CODE ANN. sec. 754.014(c), sec. 754.015, sec. 754.017(c), sec. 754.019 1975 by SB 925, 64th Leg. TEX. INS. CODE ANN. sec. 6002.054 454 - Texas Department of Insurance 0036 - GR Account - Texas Department of Insurance Operating 1971 by the 62nd Leg. TEX. INS. CODE ANN. sec. 6001.055, sec. 6001.056 454 - Texas Department of Insurance 0036 - GR Account - Texas Department of Insurance Operating Late fees: • Less than 90 days is renewal fee and up to 1/2 original fee. • Over 90 days but less than two years is renewal fee and up to 100% of original fee. Fire Extinguishers Fees for each firm installing or servicing portable fire extinguishers or planning, certifying, installing or servicing fixed fire extinguisher systems. • Certificate of registration, $450. • Renewal of certificate, $300. • Branch office registration certificate and renewal, $100. • Initial license fee, $70. • License fee renewal, $50. • Initial examination, $30. • Re-examination fee, $20. • Duplicate or changed certificate, license or permit, $20. • Change in ownership certificate, $450. • Change in ownership branch, $100. • Apprentice permit, $30. • Initial hydrostatic testing license, $250. • Hydrostatic testing license renewal, $150. Texas Comptroller of Public Accounts – January 2019 236 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Description Origin Date Legal Cites Fire Protection Personnel A fee for each intermediate, advanced and master certificate issued to each fire protection person, except the commission may collect only one fee for renewal if a person holds more than one certificate. Fees set by commission rule in amounts to recover costs, including fees to obtain criminal history information. Commission shall set a fee for a manual stating rules, regulations and minimum standards for fire protection personnel (see Revenue Code 3752). Commission shall set and collect a fee for examinations given to fire protection personnel for certification. Includes certification and renewal fees from training facilities. Unexpired certificates renewed for required fee over 30 days must pay renewal fee plus 1/2 certification fee. 1983 by SB 288, 68th Leg. R.S. effective Sept. 1, 1983 TEX. GOV’T CODE ANN. sec. 419.026, sec. 419.028, sec. 419.033, sec. 419.034, sec. 419.0341 Fees charged each person or organization that plans, sells, installs, maintains or services fire protection sprinkler systems. 1983 by SB 234, 68th Leg. R.S. Fire Protection Sprinkler Systems Certificate of registration fees for a fire protection sprinkler system contractor (not to exceed): • Application fee, $100. • Issuance or renewal, $1,200. • Duplicate or change, $70. Collecting Agencies 411 - Texas Commission on Fire Protection Deposit Funds 0001 - General Revenue Fund 5156 - GR Account - Fire Protection Fees Prior to Aug. 31, 1995, 50% of the fees credited to a special account in General Revenue dedicated to the commission and 50% to General Revenue Fund (0001). Special account abolished Aug. 31, 1995, per sec. 403.094, Government Code. TEX. OCC. CODE ANN. sec. 1301.3565 TEX. INS. CODE ANN. sec. 6003.055 Managing employee fees are $100 examination fee and $200 license issuance an renewal fee. Late fees are the renewal fee plus 1/2 of the original fee if under 90 days. Between 90 days and two years the late fee is renewal fee plus the full original fee. A person may not install a multipurpose system using a single piping system without being licensed as a master or journeyman plumber with an endorsement as a multipurpose fire protection sprinkler specialist issued by the State Board of Plumbing Examiners. Texas Comptroller of Public Accounts – January 2019 237 454 - Texas Department of Insurance 0036 - GR Account - Texas Department of Insurance Operating Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Fireworks Description Licenses required before the manufacturing, selling or distributing of fireworks. Fee amounts are not-to-exceed amounts: • Each manufacturer, possessor and seller of fireworks - $1,000 • Each distributor of fireworks - $500 • Each fireworks jobber - $1,000 • Each fireworks retailer permit - $20 • Public fireworks display permit - $50 • Multiple fireworks displays - $400 • Pyrotechnic operators and pyrotechnic special effects operator license is $100, exam fee is $50 and re-exam is $20. • Flame effects operator license is $100, exam is $30 and re-exam is $20. Origin Date 1957 by the 55th Leg. Legal Cites Collecting Agencies Deposit Funds TEX. OCC. CODE ANN. ch. 2154 454 - Texas Department of Insurance 0001 - General Revenue Fund 0036 - GR Account - Texas Department of Insurance Operating Duplicate license fee is $20. Renewal fees vary depending if the license is active or expired. Expired under 90 days - annual fee plus 1/2 original license fee; over 90 days but less than two years - annual fee plus original license fee. Additional $10 fee for firework safety and education program assessed on retail permit holders. A fee of $250 assessed on manufacturers, distributors or jobbers licenses. Food Managers To record fees for regulating certified food managers at fixed and mobile retail establishments where food is prepared on-site for sale. The executive commissioner may adopt by rule the following fees: • Issuance and renewal of a food manager certificate not to exceed $35. • Examination fee not to exceed $10. 2001 by HB 251, 77th Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 438.106 537 Department of State Health Services 0001 - General Revenue Fund Forensic Analyst The Texas Forensic Science Commission (administratively attached to the Office of Court Administration) may set and collect license and renewal fees for forensic analyst licenses (art. 38.01, sec. 4-a). A person who technically reviews or performs a forensic analysis or draws conclusions from or interprets a forensic analysis for a court or crime laboratory must hold a forensic analyst license. SB 1287, 84th Leg. R.S. TEX. CRIM. PROC. CODE ANN. art. 38.01 212 - Office of Court Administration for the Texas Forensic Science Commission 5173 - GR Account Texas Forensic Science Commission Funeral Directors, Embalmers and Funeral Establishments Before practicing embalming or funeral directing or operating a funeral establishment, certain fees are due. The Board sets all application, license, examination, renewal and provisional fees in amounts reasonable and necessary to cover administrative costs. 1903 by the 28th Leg. R.S. (p.123) TEX. OCC. CODE ANN. sec. 101.307, sec. 651.2595, sec. 651.154, sec. 651.165, sec. 651.552 513 - Texas Funeral Service Commission 0001 - General Revenue Fund 2001 by SB 405, 77th Leg. R.S. TEX. OCC. CODE ANN. sec. 1002.452, sec. 1002.152 481 - Texas Board of Professional Geoscientists 0001 - General Revenue Fund Penalties for late renewal are as follows: • 90 days or less - renewal fee equal to 150% of the amount of renewal fee • more than 90 days but less than one year - renewal fee equal to 200% of amount of renewal fee • one year or more - pass exam, pay fees, including renewal fee = 2x normal renewal fee and complete continuing education requirements • Reinstatement of suspended license, renewal fee = 2x normal renewal fee plus penalties • Reissue of revoked license, pass exam, pay fee = 2x normal renewal fee and complete continuing education requirements An administrative penalty may be assessed for violations (collected under Revenue Object 3770). In determining the amount of penalty, the commission shall consider the seriousness of the violation. For funeral service establishments between $100 and $5,000 per violation. Initial license or registration fee increased by $5 and renewal by $1, effective Sept. 1, 2003. Geoscientists A person may not practice professional geosciences unless licensed. The board may set reasonable and necessary fees for applicants and license holders for application, examination, licensure and license renewal. May charge an administrative penalty not to exceed $100 for each violation (collected under Revenue Object 3770). Texas Comptroller of Public Accounts – January 2019 238 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Collecting Agencies Deposit Funds Guardianship Occupation An application fee submitted by an individual applying for certification to provide guardianship services for wards of the court. The Judicial Branch Certification Commission, administratively attached to the Office of Court Administration, may set the fee. The commission may charge a fee for criminal history records as approved by the Supreme Court. Description 2005 by SB 6, 79th Leg. R.S. Origin Date TEX. GOV’T CODE ANN. sec. 155.102 212 - Office of Court Administration 0001 - General Revenue Fund Handgun Instructor The department shall charge fees for certification of qualified handgun instructors: • $100 fee for handgun instructor training (411.190) • $100 renewal fee plus a retraining course every two years (411.190) • A fee established by the department sufficient to cover costs for an additional certification in school safety (411.1901) Sept. 1, 1995, by SB 60, 74th Leg. R.S. TEX. GOV’T CODE ANN. sec. 411.190, sec. 411.1901 405 Department of Public Safety 0001 - General Revenue Fund Health Service Providers Registry Fees The department is authorized to establish a registry or system of registries for providers of health-related services not otherwise licensed, registered or certified by a state agency, board or commission. The Board of Health may adopt registration fees to cover costs of establishing and maintaining a registry and may adopt rules as necessary for administration. Sept. 1989, by HB 2473, 71st Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 12.014 537 Department of State Health Services 0001 - General Revenue Fund Hearing Instrument Fitters and Dispensers To record fees for regulating hearing instrument fitters and dispensers. The commission shall set fees in amounts to cover costs of administration for applications, licenses, permits, renewals, examinations and other programs or activities for which a fee is authorized. Jan. 1, 1970, by the 61st Leg. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 402.203, sec. 402.207, sec. 402.251, sec. 402.301 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Sept. 1, 1993 General Appropriations Act State Colleges and Universities The appropriate institutional fund State Colleges and Universities The appropriate institutional fund. Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Higher Education – Non-Pledged To record non-pledged professional fees collected by higher education. See Revenue Code 3835 for pledged professional fees. Legal Cites TEX. EDUC. CODE ANN. sec. 51.008 Higher Education – Unrestricted Current Funds To record professional fees collected in local funds by higher education for USAS reporting. Sept. 1, 1993. General Appropriations Act TEX. EDUC. CODE ANN. sec. 51.008 Identity Recovery Service Contract Providers/ Administrators An identity recovery service provider must report quarterly the number of service contracts that were sold or issued to consumers in the state and must submit a $1 fee for each contract. 2009 by SB 778, 81st Leg. R.S. TEX. OCC. CODE ANN. sec. 1304.1035 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Industrial Homework (1) Each person who does any manufacturing in a home of materials or articles for an employer must obtain a homeworker’s certificate; the fee may not exceed $0.50. (2) Each employer for whom industrial homework is performed must obtain an employer’s permit; the fee is $50 before delivering materials for homework. 1937 by 45th Leg. TEX. HEALTH & SAFETY CODE ANN. sec. 143.003, sec. 143.006 537 Department of State Health Services 0001 - General Revenue Fund Texas Comptroller of Public Accounts – January 2019 239 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Interior Design Description Origin Date Legal Cites Sept. 1, 1991, by SB 429, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 1053.052, sec. 1053.251 459 - Texas Board of Architectural Examiners An account with the Texas Safekeeping Trust Company 1979 by HB 1521, 66th Leg. TEX. HUM. RES. CODE ANN. sec. 81.006, sec. 81.007, sec. 81.0071, sec. 81.0074 529 - Health and Human Services Commission 0001 - General Revenue Fund In order to be licensed as an irrigator or installer, a person must be licensed under Water Code Chapter 37. License fees and requirements set by the commission. Renewal fee is 1.5 times the regular fee if the license was expired 30 days or less. Over 30 days and a new license application is required. 1973 by 63rd Leg. R.S. TEX. WATER CODE ANN. sec. 37.009, sec. 37.006 582 - Texas Commission on Environmental Quality 0468 - GR Account - Texas Commission On Environmental Quality Occupational Licensing Fees for each person before acting as a land surveyor at a rate set by the board in amounts necessary to cover administration for: application, examination, annual renewal, duplicate certificate, certificate to applicant (out of state licensed), re-exam (inactive status) and professional land surveyor. 1955 by the 54th Leg. TEX. OCC. CODE ANN. sec. 1071.158, sec. 1071.262, sec. 1071.301, sec. 1071.303, sec. 1071.452, sec. 1071.503 464 - Texas Board of Professional Land Surveying 0001 - General Revenue Fund Sept. 1, 1969, by HB 111, 61st Leg. TEX. OCC. CODE ANN. ch. 1052, sec. 1051.452 459 - Texas Board of Architectural Examiners An account with the Texas Safekeeping Trust Company The board shall set the following fees in amounts reasonable and necessary to cover the costs of administration to register a person in interior design: • Registration application fee • Annual registration renewal fee • Reciprocal registration fee • Examination fee • Duplicate registration certificate • Roster of interior designers • Restoration of revoked or suspended certificate • Renewal of expired certificate • Restore license on inactive status • Interior Designer Emeritus administration and renewal fee Collecting Agencies Deposit Funds Board may assess an administrative penalty based on the seriousness of the violation (collected under Revenue Object 3770). Interpreters for Persons who are Deaf or Hard of Hearing To record fees for examinations, certificate renewal and recertification for interpreters who facilitate communication between persons who are deaf or hard of hearing and persons who are not. Fees are set by the executive commissioner by rule to cover the costs of the certification program. Fees to renew expired certificates are between 1-1/4 and 1-1/2 times the normally required renewal fee. Irrigators and Installers Land Surveyors TEX. OCC. CODE ANN. sec. 1903.251 License expired 90 days or less – pay renewal fee plus 1/2 amount of exam fee; more than 90 days – renewal fees plus amount of exam fee; over 1 year – must reapply. Includes civil penalties up to $1,500 (collected under Revenue Object 3717). Administrative penalties up to $1,500 per violation (collected under Revenue Object 3770). Landscape Architects The board sets registration fees (including reciprocal registration) for landscape architects paid before engaging in business. Annual renewal fees are set by the board and are 1-1/2 times normal if the license is expired for 90 days or less. Twice the normal fee for 90 days to 1 year. Board may set fee for any action involving an administrative expense in amounts reasonable and necessary unless otherwise set by GAA. May assess up to $10 for administering the examination fee scholarship program. May charge a fee for landscape architect emeritus status on certificate of registration. Board may assess administrative penalty (collected under Revenue Object 3770) up to $5,000. Texas Comptroller of Public Accounts – January 2019 240 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Description Origin Date Legal Cites (1) Commission shall establish reasonable and necessary fees for the licensing of peace officers, county jailers and guards, reserve law enforcement officers, armed security officers and peace officers who utilize investigative hypnosis. Fees are for licenses, agency commission licenses, professional or proficiency certificates, examinations, approval of training programs, license reactivation, etc. (1701.154). (2) May assess administrative penalties up to $1,000 per day per violation (1701.507). Collected under Revenue Object 3770. (3) Commission shall charge each school marshal trainee a reasonable fee to cover the cost of conducting the program. The commission shall charge a reasonable fee to cover the cost of renewing the person’s license (1701.260). 1983 by SB 155, 68th Leg. R.S. TEX. OCC. CODE ANN. sec. 1701.154, sec. 1701.507, sec. 1701.260 407 - Texas Commission on Law Enforcement 0001 - General Revenue Fund (3) Lawyer Referral Services An entity must be certified by the state bar to operate a lawyer referral service. May charge reasonable and necessary fees to cover costs. 1993 by HB 1926, 73rd Leg. R.S. TEX. OCC. CODE ANN. sec. 952.052 202 - State Bar of Texas Retained locally Legal Service Contract Sales A person may not operate as a company or sales representative of legal service contracts sold in this state for process unless registered with this department. A tiered fee schedule shall be developed of annual registration fees based on the number of legal service contracts sold during the preceding 12-month period set in amounts to cover administration. In addition, each company shall pay an annual fee equal to the difference between 1.7 percent of the amount a company collects for contracts sold in the current year and the amount the company paid in state franchise taxes during the same year. 2003 by SB 597, 78th Leg. R.S. TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408, sec. 953.053 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Law Enforcement Collecting Agencies Deposit Funds 0116 - GR Account - Texas Commission on Law Enforcement (1) (2) New license status of inactive, temporary and emergency fees set by the department. Life Settlement Contracts An individual corporation, trust, partnership, association or other legal entity engaging in the business of life settlement contracts shall pay a registration fee set by the Department of Insurance. Sept. 1, 1995, by HB 2256, 74th Leg. R.S. TEX. INS. CODE ANN. sec. 1111A.003 454 - Texas Department of Insurance 0001 - General Revenue Fund Lobbyist Registration A fee is charged for original registration and renewal of registration required of all lobbyists. Registration expires at midnight, Dec. 31, of each year. Fees are charged as follows: • $75 for any person required to register solely because the person is required to register under sec. 305.0041, • $150 for a registrant employed by an organization exempt from federal income tax under Sections 501 (c)(3,4) IRS Code of 1986 or • $750 for any other registrant. 1987 by SB 1081, 70th Leg. R.S. TEX. GOV’T CODE ANN. sec. 305.005 356 - Texas Ethics Commission 0001 - General Revenue Fund 1991 by SB 181, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 502.153, sec. 502.301, sec. 502.402, sec. 502.252, sec. 502.254, sec. 502.256, sec. 502.257, sec. 502.260, sec. 502.302, sec. 502.453 537 Department of State Health Services for the Texas State Board of Examiners of Marriage and Family Therapists 0001 - General Revenue Fund A registration fee for calendar years 2004 and 2005 is increased by an amount needed to generate revenue necessary to develop and implement an electronic filing system. Marriage and Family Therapists To record fees for licenses, renewals, examinations and removal from inactive status of marriage and family therapists and marriage and family therapist associates. Fees are set by the board in amounts to recover costs of administration and enforcement. The board may not set a fee for an amount less than the amount of that fee on Sept. 1, 1993. Fees to renew expired licenses are between 1-1/4 and 1-1/2 times the normally required renewal fee. Related Administrative and Civil Penalties • Administrative penalties may be assessed not to exceed $5,000 per day per violation (collected under Revenue Object 3770). • Civil penalties may be assessed not to exceed $1,000 per day (collected under Revenue Object 3717). Texas Comptroller of Public Accounts – January 2019 241 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Massage Therapy Description To record fees for regulation of massage therapists, massage schools, massage therapy instructors and massage establishments. Fees are set by the executive commissioner by rule. Fees charged for applications, licenses and renewals. Legal Cites Collecting Agencies Deposit Funds 1985 by HB 2012, 69th Leg. R.S. Origin Date TEX. OCC. CODE ANN. sec. 455.153, sec. 455.160, sec. 455.351, sec. 455.1572 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1991 by SB 521, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 602.203, sec. 602.210, sec. 602.151, sec. 602.211, sec. 602.213, sec. 602.351, sec. 602.3015 503 - Texas Medical Board 0001 - General Revenue Fund Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Related Civil Penalties • Civil penalties may be assessed not less than $1,000 or more than $10,000 per violation per day (collected under Revenue Object 3717). Medical Physicists To record fees for regulation of medical physicists. Fees are set by the medical board in amounts to recover costs of administration for license applications and renewals. Penalty fees charged in addition to renewal fee for expired licenses are equal to 1/2 to 1 times the normally required renewal fee. Related Administrative and Civil Penalties • Administrative penalties may be assessed not to exceed $500 per violation per day up to $2,500 (collected under Revenue Object 3770). • Civil penalties may be assessed not to exceed $5,000 per day (collected under Revenue Object 3717). Membership Camping Contracts No person shall offer or dispose of a membership interest or membership right under a membership camping contract in this state unless the operator is registered. If an operator also sells membership camping contracts, that operator must also comply with the registration requirements for brokers. Each application for registration as a seller or broker must be accompanied by a fee set by the Secretary of State in amounts reasonable and necessary to cover the costs of administration. 1987 by HB 49, 70th Leg. R.S. TEX. PROP CODE ANN. sec. 222.004 307 - Secretary of State 0001 - General Revenue Fund Metal Recycling Entity A person may not act as a metal recycling entity unless registered. Annual fee for issuance of certificate of registration, up to $250. Renewal fees: if expired 90 days or less, 1-1/2 times renewal fee; if expired more than 90 days but less than 1 year, 2 times renewal fee; if expired more than 1 year, must reapply. Administrative penalty of up to $1,000 is collected under Revenue Object 3770. 2007 by SB 1154, 80th Leg. R.S. TEX. OCC. CODE ANN. ch. 1956 405 Department of Public Safety 0001 - General Revenue Fund Mold Assessors/ Remediators The commission shall establish fees in amounts sufficient to recover costs of administering and enforcing the program. Includes administrative penalties (collected under Revenue Object 3770) and civil penalties (collected under Revenue Object 3717). 2003 by HB 329, 78th Leg. R.S. TEX. OCC. CODE ANN. ch. 1958, sec. 51.202, sec. 51.103 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Texas Comptroller of Public Accounts – January 2019 242 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Mortgage Banker/ Mortgage Broker/Loan Officer Description Origin Date Legal Cites Collecting Agencies Deposit Funds Residential mortgage loan company license fee and renewal fee, no more than $375 each. Recovery fund fee of $20. Sept. 1, 1999, by SB 1074, 76th Leg. R.S. TEX. FIN. CODE ANN. sec. 156.211, sec. 156.502, sec. 156.212, sec. 156.2012, sec. 156.302, sec. 156.406, sec. 157.015, sec. 157.013, sec. 157.006, sec. 157.0061, sec. 157.0062, sec. 157.019, sec. 157.023, sec. 157.031, sec. 158.053, sec. 158.058, sec. 158.105 450 Department of Savings and Mortgage Lending Deposited to account in Texas Safekeeping Trust Company Residential mortgage loan originator license fee and renewal fee, no more than $500 each. Recovery fund fee of $20. Mortgage banker registration fee and administration fee and renewal fee, no more than $500 per year each. Additional fees include: • Residential mortgage loan company change of address fee of $25. • Mortgage loan company sponsor of loan originator, a fee of $25. • For multiple places of business, $50 for each additional license certificate. • Reinstatement fee of $25. • Hearing deposit $500. • Probationary and provisional licenses set by commission. Registered financial services company annual registration fee and renewal, no more than $500 each. Residential mortgage loan servicers for residential mortgage loan must pay a registration and renewal fee, each up to $500. Administrative penalties collected under Revenue Object 3770. Motor Vehicle Repair Facilities A repair facility (engaging in repairing or replacing a damaged motor vehicle) shall register with the commission annually. Fees required are: registration or renewal of registration – $50 and replacement of lost or destroyed certificate – $25. 1993 by HB 2564 73rd Leg. R.S. effective Jan. 1, 1994 TEX. OCC. CODE ANN. sec. 2304.053, sec. 2304.055 582 - Texas Commission on Environmental Quality 0001 - General Revenue Fund Notary Public A fee of $10 charged for each notary public commission. The Secretary of State may charge an additional fee for online application submission. 1881 by the 17th Leg. R.S. (ch. 82, p.186) TEX. GOV’T CODE ANN. sec. 406.007, sec. 406.105 307 - Secretary of State 0001 - General Revenue Fund Sept. 1, 1983, by SB 1213, 68th Leg. R.S. TEX. OCC. CODE ANN. sec. 101.307, sec. 454.104, sec. 454.252, sec. 454.353 533 Executive Council of Physical and Occupational Therapy Examiners for Texas Board of Occupational Therapy Examiners, Agency 534 0001 - General Revenue Fund Fee of $1 for exclusive purpose of hiring an investigator and for preparing and distributing material. A fee of $10 for approving and filing the bond of the notary public. Occupational Therapy Fees for the regulation of occupational therapists and occupational therapist assistants are prescribed by the Executive Council of Physical Therapy and Occupational Therapy Examiners, Agency 533 and include license applications, renewal, late endorsement and temporary fees. Fees that existed Sept. 1, 1993, may not be set in an amount less than the amount of the fee on that date. $1 per license may be collected for the peer assistance program. Late fee, under 90 days, is renewal fee plus no more than 1/2 the renewal fee. For over 90 days to 1 year, it is all unpaid renewal fees plus a late fee no more than the renewal fee. May receive administrative penalties assessed against facilities or license holders for violations of the Texas Occupational Therapy Act, up to $200 (collected under Revenue Object 3770). Civil penalties are $200 for each day violation continues (collected under Revenue Object 3717). Each day is a separate violation. Initial license or registration fee increased by $5 and renewal by $1, effective Sept. 1, 2003. Texas Comptroller of Public Accounts – January 2019 243 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Optometry Description Fees charged a person practicing optometry established by board, including exam, re-exam, issue, renewal, duplicate license and other acts or services provided by board. Origin Date Legal Cites 1921 by the 37th Leg. TEX. OCC. CODE ANN. sec. 101.307, sec. 351.152, sec. 351.154, sec. 351.304 514 - Texas Optometry Board 0001 - General Revenue Fund Sept. 1, 1997 by SB 291, 75th Leg. R.S. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 605.252, sec. 605.255, sec. 605.259 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Late fee: 90 days or less – renewal fee plus 1/2 license exam fee plus additional fee required; 91 days - 1 year – renewal fee plus license exam fee plus additional fee required. Over 1 year, may not renew, must reapply. Collecting Agencies Initial license or registration fee increased by $5 and renewal by $1, effective Sept. 1, 2003. Deposit Funds 5% of renewal fees forwarded to the University of Houston Development Fund, which is held locally A license holder on retired status must pay a fee equal to the renewal fee for a license on the inactive status and may apply for reinstatement by paying the renewal fee. Orthotists and Prosthetists To record fees for the regulation of orthotists and prosthetists including assistants and technicians. The commission shall set fees in amounts to cover costs of administration for applications, licenses, renewals, examinations and other programs or activities for which a fee is authorized. Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Pesticide Applicator for Health-Related Pest Control Fees charged a person desiring to be a pesticide applicator for control of health-related pests (except structural pest control). Commercial and non-commercial applicator fees, private applicator fees, testing fees for commercial/non-commercial applicators set by agency head. 1976 by the 64th Leg. TEX. AGRIC. CODE ANN. sec. 76.106, sec. 76.108, sec. 76.109 551 Department of Agriculture 0001 - General Revenue Fund Pharmacy Fees charged for regulation of pharmacists, pharmacy technicians, pharmacy technician trainees and pharmacies. Set by the board in amounts reasonable and necessary to cover costs of administration for: • Application and exam. • Application and issue of pharmacist license or renewal. • Application and issue of pharmacy license or renewal Class A, B, C, D. • Duplicate license fee. • License for a pharmacist licensed by the board for at least 50 years and who does not actively practice pharmacy. • Provisional license. 1929 by the 41st Leg. first brought into Treasury Sept. 1, 1985. TEX. OCC. CODE ANN. sec. 101.307, sec. 554.006, sec. 559.003, sec. 561.003, sec. 566.002, sec. 566.101, sec. 568.004, sec. 568.005 515 - Texas State Board of Pharmacy 0001 - General Revenue Fund A late fee equal to 1-1/2 times normal renewal fee is assessed if the license is expired 90 days or less. For 91 days to one year, fee is two times the normal fee. Over one year, must reapply. The board may assess a $1,000 civil penalty (collected under Revenue Object 3717) on those unlawfully engaging in the practice of pharmacy and an administrative penalty (collected under Revenue Object 3770) up to $5,000 for each violation of pharmacy-related statute or rules. The board may add a surcharge of not more than $1 to a license or license renewal fee to fund programs to aid impaired pharmacists or pharmacy students. Initial license or registration fee increased by $5 and renewal by $1, effective Sept. 1, 2003. Texas Comptroller of Public Accounts – January 2019 244 License fees deposited locally. Amounts to cover expenses transferred to the General Revenue Fund (No. 0001). Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Physical Therapy Description The Board of Physical Therapy Examiners, Agency 522, may recommend to the Executive Council on Physical Therapy and Occupational Therapy Examiners, Agency 533, reasonable and necessary fees for licenses issued or services performed so that aggregate fees produce sufficient revenue to cover administration. The board may not recommend a fee for an amount less than the amount of that fee on Sept. 1, 1993. Origin Date Legal Cites 1971 by the 62nd Leg. TEX. OCC. CODE ANN. sec. 101.307, sec. 453.104, sec. 453.252, sec. 453.207, sec. 453.253, sec. 453.401 533 Executive Council of Physical and Occupational Therapy Examiners for Board of Physical Therapy Examiners, Agency 522 0001 - General Revenue Fund 1947, brought into Treasury Sept. 1, 1981, by SB 851, 67th Leg. R.S. TEX. OCC. CODE ANN. ch. 1301 456 - Texas State Board of Plumbing Examiners 0001 - General Revenue Fund 1923, first brought into Treasury Sept. 1, 1981, by SB 866, 67th Leg. R.S. TEX. OCC. CODE ANN. sec. 101.307, sec. 202.153, sec. 202.301, sec. 202.552 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1965 by SB 97, 59th Leg. TEX. OCC. CODE ANN. sec. 51.202, sec. 1703.202, sec. 1703.208, sec. 1703.252 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund The executive council shall set fees. Late fee, under 90 days, is renewal fee plus no more than 1/2 the renewal fee. For over 90 days to 1 year, it is all unpaid renewal fees plus a late fee no more than the renewal fee. May assess administrative penalties assessed against facilities or license holders for violation of the Texas Physical Therapy Practice Act (collected under Revenue Object 3770). Collecting Agencies Deposit Funds Initial license or registration fee increased by $5 and renewal by $1, effective Sept. 1, 2003. Plumbers (1) Board shall establish fees for licensing, endorsing or registering master plumbers, journeymen plumbers, plumbing inspectors and provisional licenses in amounts sufficient to pay costs of administering certification program. (2) The board may issue to a master or journeyman plumber an endorsement as a water supply protection specialist. Fees shall be established by the board. (3) The board may issue an endorsement to a master or journeyman plumber as a multipurpose residential fire protection sprinkler specialist upon payment of a fee set by the board. See Revenue Code 3175 (Fire Protection Sprinkler Systems). Renewal fees: 90 days or less - 1 1/2 times the normal renewal fee; 90 days but less than 2 years - 2 times the normal renewal fee; over 2 years may not renew; must reapply. Podiatry The commission shall establish by rule reasonable and necessary fees for the regulation of podiatrists in amounts to produce sufficient revenue to cover administration for: • Examination • Re-examination • License renewal • Duplicate license Late fees: • 90 days or less – 1-1/2 times renewal exam fee; • 91 days - 1 year – 2 times renewal fee. Related Civil Penalties • Civil penalties of not less than $50 or more than $500 per day (collected under Revenue Object 3717). Polygraph Examiners Fees for polygraph examiner license, internship license, license renewals and examinations set by the Texas Department of Licensing and Regulation. Texas Comptroller of Public Accounts – January 2019 245 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Private Investigators and Security Description To record fees for licenses, registrations, endorsements and commissions under TEX. OCC. CODE ANN. Chapter 1702 including investigation companies, security services contractors, certain security officers and individuals employed in a field connected to private investigation or private security. Legal Cites Collecting Agencies Deposit Funds 1969 by the 61st Leg. Origin Date TEX. OCC. CODE ANN. sec. 1702.062, sec. 1702.302, sec. 1702.303, sec. 1702.381, sec. 1702.402 405 Department of Public Safety 0001 - General Revenue Fund The Texas Private Security Board by rule shall establish fees to produce sufficient revenue for administration without producing unnecessary fund balances. Renewal fees for expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Related Civil and Administrative Penalties • Administrative penalties may be assessed not to exceed $5,000 per violation (collected under Revenue Object 3770). • Civil penalties may be assessed not to exceed $10,000 per violation (collected under Revenue Object 3717). Probation Officer Fees for certification examination of juvenile probation officers. 1987 by the 70th Leg. R.S. TEX. HUM. RES. CODE ANN. sec. 203.0082, sec. 222.001 644 - Texas Juvenile Justice Department 0001 - General Revenue Fund Process Server The Judicial Branch Certification Commission (attached to OCA) may recommend fees for process server certification, which must be approved by the Supreme Court. Fees may be appropriated to the Office of Court Administration for support of regulatory programs for process servers, guardians and court reporters and the certification division. The commission may assess administrative penalties up to $500 per day per violation (collected under Revenue Object 3770). 2011 by HB 1614, 82nd Leg. R.S. TEX. GOV’T CODE ANN. sec. 152.2015, sec. 153.052, sec. 153.053, sec. 156.052 212 - Office of Court Administration 0001 - General Revenue Fund Professional Counselors To record fees required of professional counselors. Board shall establish reasonable fees to produce sufficient revenue to cover administration and enforcement without accumulating unnecessary surpluses. The board may not set a fee for an amount less than the amount of that fee on Sept. 1, 1993. Sept. 1, 1981, by SB 606, 67th Leg. R.S. TEX. OCC. CODE ANN. sec. 503.202, sec. 503.351, sec. 503.354, sec. 503.502 537 Department of State Health Services for the Texas State Board of Examiners of Professional Counselors 0001 - General Revenue Fund 1993 by HB 456, 73rd Leg. R.S. TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Fees to renew expired licenses are between 1-1/4 and 1-1/2 times the normally required renewal fee. Related Administrative Penalty • Administrative penalties may be assessed between $50 and $5,000 per violation per day (collected under Revenue Object 3770). Each day of continuance is a separate violation. Professional Employer Organizations A person may not engage in or offer professional employment services without holding a license. Each applicant for original or annual renewal license shall pay a fee set by department rule. Reasonable fees may be charged for administration and enforcement responsibilities. A license holder may amend its license for a fee set by the department. Limited license valid for one year. New license status of inactive, temporary and emergency, fees set by the department. TEX. LAB. CODE ANN. sec. 91.015, sec. 91.016, sec. 91.017, sec. 91.018, sec. 91.019, sec. 91.021 Texas Comptroller of Public Accounts – January 2019 246 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Professional Engineers Description Fees charged each professional engineer at a rate set by the board in amounts reasonable and necessary to cover the costs of administration. Renewal of expired license 90 days or less – required renewal fee and applicable fees. More than 90 days but less than 2 years – required renewal fee, a late fee and any fee increases. Over 2 years – may not renew; must reapply. Origin Date Legal Cites Collecting Agencies Deposit Funds 1937 by the 45th Leg. TEX. OCC. CODE ANN. sec. 1001.204, sec. 1001.502 460 - Texas Board of Professional Engineers With the Texas Safekeeping Trust Company Sept. 1, 1991, by SB 773, 72nd Leg. R.S. TEX. OCC. CODE ANN. ch. 1152, sec. 51.4011, sec. 51.407, sec. 51.408 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1969 by the 61st Leg. TEX. OCC. CODE ANN. sec. 101.307, sec. 501.152, sec. 501.452, sec. 501.502 520 - Texas State Board of Examiners of Psychologists 0001 - General Revenue Fund 1939 by the 47th Leg. TEX. OCC. CODE ANN. sec. 1101.152, sec. 1101.154, sec. 1101.451, sec. 1101.457, sec. 1101.603, sec. 1101.702, sec. 1101.3015, sec. 1102.251, sec. 1102.352, sec. 1103.156, sec. 1103.2111, sec. 1103.209, sec. 1103.212, sec. 1103.552, sec. 1104.052 329 - Texas Real Estate Commission 0028 - GR Account Appraiser Registry (Item #31) Board may adopt reduced license and annual renewal fees for engineers at least 65 years old or who are disabled and not actively engaged in the practice of engineering. Board may impose administrative penalty against a person in violation up to $5,000 (collected under Revenue Object 3770). Each day a violation continues is a separate penalty. Property Tax Consultants Applicants shall pay nonrefundable application examination registration fees to register as a property tax consultant, or senior property tax consultant in amounts set by the commission. New license status of inactive, temporary and emergency, fees set by the department. Psychologists Fees established by board rule in amounts reasonable and necessary to cover administrative costs. Board may adjust fees, but may not set a fee for an amount less than the amount of that fee on Sept 1, 1993. Late renewal before 90 days is renewal fee plus 1/2 exam fee. 90 days - 1 year is renewal fees plus exam fee. Administrative penalty up to $1,000 per violation (collected under Revenue Object 3770). Civil penalty is $1,000 for each day of violation (collected under Revenue Object 3717). Initial license fee was increased by $5 and renewal by $1, effective Sept. 1, 2003 to fund the Office of Patient Protection within the Health Professions Council (364). Real Estate TEX. OCC. CODE ANN. 1101.152: (1) Original, renewal application or annual certification for individual real estate broker license. (2) Original, renewal application or annual certification of a real estate sales agent. (3) Examination fee. (4) License for each branch office. (5) Request for change of place of business, name or sponsoring broker or return to active status. (6) Duplicate license. (7) Application for approval of a real estate education program and operation of a real estate school. (8) Transcript evaluation. (9) A fee for preparing a license or registration history. (10) Fee for filing an application for a moral character determination and conducting a criminal history check. (11) Application for approval of course of study, provider or instructor of real estate continuing education courses. 1101.457: (12) Fee for deferral of continuing education. 1101.154: (13) Additional $20 fee to be sent to the Texas Real Estate Research Center, Texas A&M University on every sales agent license or certificate registration. Fee for brokers is $70. 1101.603: (14) Additional $10 fee for each broker, sales agent and registrant license for deposit to the Real Estate Recovery Fund 0971 (outside the state treasury). If the commission determines the fund balance is less than $1 million, it may levy an additional fee. Texas Comptroller of Public Accounts – January 2019 247 An account with the Texas Safekeeping Trust Company Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Real Estate (concluded) Description Origin Date Legal Cites Collecting Agencies Deposit Funds Sept. 1, 1995, by HB 2599, 74th Leg. R.S. TEX. OCC. CODE ANN. ch. 2302 608 - Texas Department of Motor Vehicles 0001 - General Revenue Fund Inspector fees TEX. OCC. CODE ANN. 1102.251: (15) Application and renewal for apprentice inspector license. (16) Application and renewal for real estate inspector. (17) Application and renewal for professional inspector license. (18) Inspector change of place of business information. (19) Inspector replacement license. (20) Request for name change, return to actual status or change in sponsoring professional inspector. (21) Inspector license examination fee. 1102.352: (22) Additional inspector license fee of $200 for deposit to Real Estate Inspection Recovery Fund 0988 (outside the state treasury). The commission may charge each inspector an additional $75 if the fund balance falls below $300,000. Appraiser fees TEX. OCC. CODE ANN. 1103.156: (23) Appraiser application for license/certification and annual renewal fee. (24) Appraiser examination fee. (25) Appraiser trainee application and renewal fee. (26) Non-resident appraiser registration fee. (27) Appraiser registry fee up to the amount required by the appraisal subcommittee. (28) Appraiser return to active status. 1103.209: (29) Fee and form for reciprocity submitted by appraiser from another state must be comparable that required by certifying state. 1103.212: (30) Appraiser extension to complete continuing education. 1104.052: (31) National registry fee collected from each federally regulated appraisal management company. Other fees 1101.451 and 1103.2111: (32) The renewal fee for a license expired 90 days or less is 1.5 times the regular renewal fee. For a license , the licensee must pay a fee equal to 1-1/2 times required renewal fee; if expired more than 90 days but less than 1 year, 2 times the renewal fee. 1101.702 and 1103.552: (33) Commission may charge administrative penalties up to $5,000 per violation (collected under Revenue Object 3770). Salvage Dealers/ Agents A person may not act as an automobile recycler or salvage vehicle dealer without a license. Application must be accompanied by an application fee. License may be renewed annually by payment of the required renewal fees. Fees set by commission to cover cost of administration. No more than five individuals may operate as licensed salvage vehicle agents under a dealer’s license on payment of required fee. If license has expired, the person may renew by paying the following fees: 90 days or less – 150% of renewal fee, 91 days to one year – 200% of the renewal fee, one year or longer – may not renew, must obtain original license. Texas Comptroller of Public Accounts – January 2019 248 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Description Origin Date Legal Cites Collecting Agencies Deposit Funds Sanitarians Occupation To record fees charged for regulating sanitarians. Fees are set by the executive commissioner for registrations, renewals and examinations for professional sanitarians and sanitarians in training in amounts to cover costs of administration and enforcement. 1965 by SB 333, 59th Leg. TEX. OCC. CODE ANN. sec. 1953.104, sec. 1953.105, sec. 1953.151, sec. 1953.106 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Securities Act A fee up to $100 for filing the following: • An original application for dealer or investment adviser registration or filing for a federal covered investment adviser. • A renewal application for dealer or investment adviser registration or renewal for a federal covered investment adviser. • An original application for each agent, officer, or investment adviser representative or filing for each representative of a federal covered investment adviser. • A renewal application for each agent, officer, or investment adviser representative or renewal for each representative of a federal covered investment adviser. 1935 by the 44th Leg. TEX. REV. CIV. STAT. ANN. art. 581-35, art. 581-42 312 - State Securities Board 0001 - General Revenue Fund Sept. 1, 1999, by SB 1775, 76th Leg. R.S. TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408, sec. 51.302, sec. 1304.103, sec. 1304.201, sec. 1304.202 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund $25 fee to amend the registration certificate of a dealer, or agent, investment adviser or investment adviser representative, issue duplicates certificates; or register a branch office. $35 fee for filing a request to take the Texas Securities Law Examination. Service Contract Providers and Administrators A person may not operate as a service contract provider or administrator unless registered. Each applicant shall pay a registration and renewal fee based on the number of contracts sold during the preceding 12 months to cover costs of administration. Administrative penalties not to exceed $5,000 per day (collected under Revenue Object 3770). Civil penalties not to exceed $2,500 per violation or $50,000 aggregate (collected under Revenue Object 3717). New license status of inactive, temporary and emergency, fees set by the department. Sexually Oriented Businesses A fee is imposed on a sexually oriented business in an amount equal to $5 for each entry by each customer admitted to the business. 2007 by HB 1751, 80th Leg. R.S. TEX. BUS. & COMM. CODE ANN. sec. 102.052, sec. 102.054 902 Comptroller - State Fiscal 5010 - GR Account Sexual Assault Program Solicitation – Public Safety A public safety organization, independent promoter or public safety publication may not solicit unless a registration statement has been filed and a registration or renewal fee of $250 has been paid. Volunteer firefighters who solicit only in the area of the firefighters jurisdiction are excluded. 1993 by HB 712, 73rd Leg. R.S. TEX. OCC. CODE ANN. sec. 1803.054, sec. 1803.055, sec. 1803.154 307 - Secretary of State 0001 - General Revenue Fund 1993 by HB 1899, 73rd Leg. R.S. TEX. OCC. CODE ANN. sec. 1804.053, sec. 1804.055, sec. 1804.204 307 - Secretary of State 0001 - General Revenue Fund A public safety organization, independent promoter or public safety publication may not use a solicitor unless the solicitor has filed a registration statement and paid a $500 registration or renewal fee and filed the required bond. Registration statement effective date is the date of Secretary of State certificate issuance. Civil penalties are up to $2,500 for a single violation or $10,000 for all violations (collected under Revenue Object 3717). Solicitation – Veterans Before beginning solicitations: • a veteran’s organization must file a registration statement with a $150 fee • a solicitor for a veteran’s organization must file a registration statement with a $500 fee • if required, reports of solicitation must be accompanied by a $50 filing fee The effective date of the registration statement is the date on which the Secretary of State issues the certificate. Civil penalty for violation of Chapter 1804 up to $10,000 for each violation, for violation of an injunction up to $100,000 (collected under Revenue Object 3717). Texas Comptroller of Public Accounts – January 2019 249 Sources of Revenue APPENDIX E (continued) State Professional Fees Detail as of Fiscal 2018 Occupation Solid Waste Technicians Description A person who constructs, installs, alters, extends, services, maintains or repairs an on-site sewage disposal system or any part of an on-site sewage disposal system for compensation must hold a license or registration issued by the commission under Chapter 37, Water Code. A person who conducts preconstruction site evaluations, including visiting a site and performing a soil analysis, a site survey, or other activities necessary to determine the suitability of a site for an on-site sewage disposal system, must also hold a license. Origin Date 1981 by HB 1407, 67th Leg. TEX. HEALTH & SAFETY CODE ANN. sec. 361.027, sec. 366.071 Fees are to cover the cost of administering and enforcing Chapter 37 and licenses and registrations issued under Chapter 37. SpeechLanguage Pathologists and Audiologists To record fees for regulation of speech-language pathologists and audiologists. The commission shall set fees in amounts to cover costs of administration for applications, licenses, renewals, examinations and other programs or activities for which a fee is authorized. The board may set and charge structural pest control businesses or certified applicators fees to cover administrative costs for the following: • Structural pest control businesses license • Each certified applicator license • A temporary business or applicator’s license • Technician license • Testing fee • Consideration for approval of training courses • Purchase or borrowing of materials • Pretreatment inspection Collecting Agencies Deposit Funds 582 - Texas Commission on Environmental Quality 0468 - GR Account - Texas Commission On Environmental Quality Occupational Licensing 1983 by SB 813, 68th Leg. R.S. TEX. OCC. CODE ANN. sec. 51.401, sec. 51.202, sec. 401.303, sec. 401.305, sec. 401.310 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1971 by SB 910, 62nd Leg. TEX. OCC. CODE ANN. ch. 1951 551 Department of Agriculture 0001 - General Revenue Fund Fees to renew expired licenses are between 1-1/2 and 2 times the normally required renewal fee. Structural Pest Control Legal Cites TEX. WATER CODE ANN. sec. 37.009 The board may assess civil penalties between $50 and $2,000 for each violation (collected under Revenue Object 3717). Surgical Assistants A person may not practice as a surgical assistant unless licensed. The medical board shall set fees in amounts reasonable and necessary for license, renewal and transfer. If license has expired 90 days or less, pays a fee 1 1/2 times the renewal fee; 90 days - one year, pays a fee two times the renewal fee; and over 1 year must reapply. 2001 by HB 1183, 77th Leg. R.S. TEX. OCC. CODE ANN. sec. 206.208 503 - Texas Medical Board 0001 - General Revenue Fund Talent Agencies The department may charge each talent agency reasonable fees to cover cost of program administration. Fees are for filing and renewals of registration and certificates. Fees are set by the Texas Department of Licensing and Regulation Commission, with filing and updates to registration statements having a maximum fee of $100. Jan. 1, 1990, by SB 759, 71st Leg. R.S. TEX. OCC. CODE ANN. sec. 51.4011, sec. 51.407, sec. 51.408 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund Telephone Sellers A seller may not engage in telephone solicitation without certificate of registration, obtained by filing a registration statement and filing fee of $200. Separate certificate required for each business location from which solicitation is made. Registration statement effective for one year and may be renewed by filing renewal registration statement and paying a filing fee. 1993 by HB 364, 73rd Leg. R.S. TEX. BUS. & COMM. CODE ANN. sec. 302.106, sec. 302.104 307 - Secretary of State 0001 - General Revenue Fund Therapeutic Optometry A person may not engage in the practice of therapeutic optometry without holding a license and paying the following fees as set by the Board: examination fee, re-examination fee, license fee, license renewal fee, lost license fee. Late fees before 90 days are renewal fee plus 1/2 exam fee. 90 days - 1 year is renewal fee plus exam fee. A license holder on retired status must pay a renewal fee equal to the renewal fee on an inactive status and renewal plus administrative fees for reinstatement. 1991 by SB 774, 72nd Leg. R.S. TEX. OCC. CODE ANN. sec. 351.152, sec. 351.258 514 - Texas Optometry Board 0001 - General Revenue Fund Training, Registration of HIV Counselors Department shall develop and offer a training course providing HIV counseling, including information on special needs of persons with HIV, the importance of early intervention/treatment and recognition of psychosocial needs. Department shall maintain a registry of persons who successfully complete the training course. Department may charge a fee for training persons other than employees of entities receiving state or federal funds for HIV counseling and testing programs. The Board of Health shall set a fee in an amount reasonable and necessary to cover the costs of training. Sept. 1989 by SB 959, 71st Leg. R.S. TEX. HEALTH & SAFETY CODE ANN. sec. 85.087 537 Department of State Health Services 0001 - General Revenue Fund Texas Comptroller of Public Accounts – January 2019 250 Sources of Revenue APPENDIX E (concluded) State Professional Fees Detail as of Fiscal 2018 Occupation Underground Storage Tank Installers Description The Commission shall charge necessary fees to defray costs of administration including: • Examination fee • Initial license application • Annual license renewal fee • Late renewal fee • Duplicate license fee • Certification of registration application fee • Certification of registration issuance fee • Certification of registration annual renewal fee • Duplicate certification of registration or license • Application to change certificate of registration • Approval of continuing education programs Collecting Agencies Deposit Funds 1989 by HB 183, 71st Leg. R.S. Origin Date TEX. WATER CODE ANN. sec. 37.008, sec. 37.009 Legal Cites 582 - Texas Commission on Environmental Quality 0468 - GR Account - Texas Commission On Environmental Quality Occupational Licensing 2009 by HB 3097, 81st Leg. R.S. TEX. OCC. CODE ANN. sec. 51.401, sec. 2309.104, sec. 2309.105, sec. 2309.106, sec. 2309.151, sec. 2309.152, sec. 2309.153, sec. 2309.154, sec. 2309.251 452 - Texas Department of Licensing and Regulation 0001 - General Revenue Fund 1911 by 32nd Leg. R.S. (ch 76, p. 132) TEX. OCC. CODE ANN. sec. 101.307, sec. 801.303, sec. 801.452, sec. 801.265, sec. 801.503 578 - State Board of Veterinary Medical Examiners 0001 - General Revenue Fund 1981 TEX. OCC. CODE ANN. sec. 1904.051 582 - Texas Commission on Environmental Quality 0001 - General Revenue Fund If a person remits an examination fee and initial license application fee, the examination fee shall be applied to the license application fee so that an applicant does not pay more than $200 for an initial application and examination. Used Automotive Parts Recyclers A person must hold a license to own or operate a used automobile parts recycling business or to sell used auto parts. A separate license is required for each facility. If license has expired, the person may renew by paying the following fees: 90 days or less - 150% of renewal fee; 91 days to 18 months - 200% of the renewal fee; 18 months but less than 3 years - 200% of fee. Includes license status of inactive, temporary and emergency, fees set by the department. Administrative penalties set by the department and collected under Revenue Object 3770. Veterinary Fees for each person before practicing as a veterinarian, veterinary technician or equine dental provider in amounts set by the board, sufficient to cover administration. The board may not set a fee for an amount less than the amount of that fee on Sept. 1, 1993. Late renewal before 90 days is renewal fee equal to 1-1/2 times renewal fee set by the board. 90 days - 1 year is renewal fee two times renewal fee set by the board. If expired one year or more, must reapply. Administrative penalty up to $5,000 for each violation per day (collected under Revenue Object 3770). Civil penalty is $1,000 for each day of violation (collected under Revenue Object 3717). Initial license or registration fee increased by $5 and renewal by $1 effective Sept. 1, 2003. Water Treatment Specialists A person may not engage in water treatment to install, exchange, service and repair residential, commercial or industrial water treatment equipment and appliances without a certificate. Commission shall charge reasonable fees sufficient to pay for administration costs, not to exceed $150 a year. Note: The fees described in Appendix E, unless otherwise indicated, are deposited to either Object Code 3175 – Professional Fees or Object Code 3562 – Health Related Professional Fees. Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 251 Sources of Revenue APPENDIX F Summary of Changes, Major Texas Insurance Premium Tax Rates 1907 to 2018 When multiple rates are presented, they apply in inverse proportion to the share of investments in Texas Legislature 30th Year 1907 a Property and Casualty Domestic (%) 2.0 Property and Casualty Foreign (%) 2.0 Life, Accident and Health Domestic (%) 0.5/1.0/3.0 Life, Accident and Health Foreign (%) 0.5/1.0/3.0 31st 1909 2.0 2.0 0 1.5/2.0/2.5/3.0 32nd 1911 0.5/1.0/2.6 0.5/1.0/2.6 0 1.5/2.0/2.5/3.0 44th 1936 0.625/1.25/3.25 0.625/1.25/3.25 0.5 2.5/2.9/3.25/3.75 45th 1937 0.625/1.25/3.25 0.5/2.0/3.25 0.5 2.5/2.9/3.25/3.75 46th 1939 b 0.625/1.25/3.25 0.5/2.0/3.25 0.5 2.5/2.9/3.25/3.75 47th 1941 0.75/1.5/4.05 0.5/3.0/4.05 0.625 3.1/3.6/4.0/4.65 49th 1945 c 1.0/1.5/2.0/2.75/3.5 1.0/1.5/2.0/2.75/3.5 0.95/1.75/2.5/2.75/3.0/3.75 0.95/1.75/2.5/2.75/3.0/3.75 51st 1949 1.0/1.5/2.0/2.75/3.5 1.0/1.5/2.0/2.75/3.5 1.0 1.75/2.0/2.5/2.75/3.0 52nd 1951 1.1/1.65/2.2/2.75/3.025/3.85 1.1/1.65/2.2/2.75/3.025/3.85 1.1 1.75/2.0/2.5/2.75/3.0 67th 1981 1.2/2.4/3.5 1.2/2.4/3.5 1.1 1.75/2.0/2.5/2.75/3.0 1.925/2.2/2.75/3.025/3.3 Title (%) 68th 1983 1.2/2.4/3.5 1.2/2.4/3.5 1.1 68th 1984 1.2/2.4/3.5 1.2/2.4/3.5 1.1/1.8/2.5 1.1/1.8/2.5 69th 1985 1.2/2.4/3.5 1.2/2.4/3.5 1.1/1.8/2.5 1.1/1.8/2.5 70th 1987 d,e 1.2/2.4/3.5 1.2/2.4/3.5 1.1/1.8/2.5 1.1/1.8/2.5 1.3/2.0 71st 1989 1.6/2.4/3.5 1.6/2.4/3.5 1.1/1.8/2.5 1.1/1.8/2.5 1.3/2.0 Licensed Captives (%) Rate changes enacted in the 71st Legislature that took effect in subsequent years 1990 1.6/2.4/3.5 1.6/2.4/3.5 1.3/1.85/2.4 1.3/1.85/2.4 1.3/2.0 1991 1.6/2.4/3.5 1.6/2.4/3.5 1.4/1.85/2.3 1.4/1.85/2.3 1.3/2.0 1992 1.6/2.4/3.5 1.6/2.4/3.5 1.5/1.85/2.2 1.5/1.85/2.2 1.3/2.0 1993 1.6/2.4/3.5 1.6/2.4/3.5 1.6/1.85/2.1 1.6/1.85/2.1 1.3/2.0 1994 1.6/2.4/3.5 1.6/2.4/3.5 1.7/1.85/2.0 1.7/1.85/2.0 1.3/2.0 1995 1.6/2.4/3.5 1.6/2.4/3.5 1.75 1.75 1.3/2.0 76th 1999 f 1.6 1.6 1.75 1.75 1.35 83rd 2013 g 0.5 Notes: a. Pre-1907: Insurance companies were assessed a flat $50 annual tax. b. Change in Texas investment thresholds necessary for reduced tax rates. c. First $450,000 in gross life premiums qualify for reduced tax rates. d. 20 percent surtax enacted by the 70th Legislature applicable to premiums written in calendar 1987 and 1988 only. e. Title separated from P&C by the 70th Legislature for premiums written in calendar 1988 and beyond. f. For premiums written in calendar 2000 and beyond. g. The minimum premium tax is $7,500 and the maximum premium tax is $200,000. Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 252 Sources of Revenue APPENDIX G State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Sales Taxes 15% Average Annual Percentage Change 12 9 6 3 0 -3 -6 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Sales Taxes Source: Texas Comptroller of Public Accounts Motor Vehicle Sales and Rental Taxes 15% Average Annual Percentage Change 12 9 6 3 0 -3 -6 -9 -12 1972–1983 1983–1992 1992–2001 Personal Income 2001–2003 2003–2008 2008–2010 Motor Vehicle Sales and Rental Taxes Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 253 Sources of Revenue APPENDIX G (continued) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Oil Production Tax 30% Average Annual Percentage Change 25 20 15 10 5 0 -5 -10 -15 -20 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Oil Production Tax Source: Texas Comptroller of Public Accounts Natural Gas Production Tax 30% Average Annual Percentage Change 20 10 0 -10 -20 -30 -40 -50 1972–1983 1983–1992 1992–2001 Personal Income 2001–2003 2003–2008 2008–2010 Natural Gas Production Tax Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 254 Sources of Revenue APPENDIX G (continued) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Motor Fuels Taxes Average Annual Percentage Change 20% 15 10 5 0 -5 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Motor Fuels Taxes Source: Texas Comptroller of Public Accounts Franchise Tax 25% Average Annual Percentage Change 20 15 10 5 0 -5 -10 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 Franchise Tax Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 255 Sources of Revenue APPENDIX G (continued) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Cigarette and Tobacco Taxes Average Annual Percentage Change 20% 15 10 5 0 -5 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Cigarette and Tobacco Taxes Source: Texas Comptroller of Public Accounts Alcoholic Beverage Taxes Average Annual Percentage Change 15% 12 9 6 3 0 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 Alcoholic Beverage Taxes Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 256 Sources of Revenue APPENDIX G (continued) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Insurance Taxes Average Annual Percentage Change 20% 15 10 5 0 -5 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Insurance Taxes Source: Texas Comptroller of Public Accounts Utility Taxes 25% Average Annual Percentage Change 20 15 10 5 0 -5 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 Utility Taxes Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 257 Sources of Revenue APPENDIX G (continued) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Hotel Occupancy Tax 20% Average Annual Percentage Change 15 10 5 0 -5 -10 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 2010–2018 1972–2018 2010–2018 1972–2018 Hotel Occupancy Tax Source: Texas Comptroller of Public Accounts Other Taxes 35% Average Annual Percentage Change 30 25 20 15 10 5 0 -5 -10 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 Other Taxes Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 258 Sources of Revenue APPENDIX G (concluded) State Tax Collections and Personal Income, Fiscal 1972-2018 Average Annual Growth Rates by Period Total Tax Collections 15% Average Annual Percentage Change 12 9 6 3 0 -3 -6 -9 1972–1983 1983–1992 1992–2001 2001–2003 Personal Income 2003–2008 2008–2010 Total Tax Collections Source: Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts – January 2019 259 2010–2018 1972–2018 Texas Comptroller of Public Accounts Publication #96-571. Revised January 2019. For additional copies of this report, write: Texas Comptroller of Public Accounts Fiscal Management Division 111 E. 17th Street Austin, Texas 78774-0100 cpa.fiscal.management@cpa.texas.gov An electronic version of this report may be found online at comptroller.texas.gov/transparency/revenue/sources.php