Sources of Revenue: A History of State Taxes and Fees in Texas, 1972-2013 Page: 42
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SOURCES OF REVENUE
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
organizations, 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 allowing all businesses to qualify for refunds
or reduced Sales and Use taxes for eligible purchases in
1992-93, HB 11 authorized Franchise taxpayers to claim
a credit for a portion of 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, psy-
chologists, chiropractors, 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, consolidated
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 taxallocation with a portion of Motor Vehicle Registration
fees, effective January 1992.
HB 54, with voter approval on November 5, 1991,
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 million-$307 million above expecta-
tions-during the 1992-93 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 Reve-
nue 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 20th. This would have become
effective September 1994 and expired January 1996.
However, the Comptroller subsequently waived this pro-
vision; 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, effec-
tive October 1994.42 " June 2014, Texas Comptroller of Public Accounts
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Texas. Comptroller's Office. Sources of Revenue: A History of State Taxes and Fees in Texas, 1972-2013, article, June 2014; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth639576/m1/50/: accessed April 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.