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F I S C A L I M P A C T R E P O R T
SPONSOR Trujillo
ORIGINAL DATE
LAST UPDATED
1/29/08
HB 258
SHORT TITLE Child Daycare Gross Receipts Tax Credit
SB
ANALYST Schardin
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
FY10
(876.9)
(945.8) Recurring General Fund
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Children, Youth and Families Department (CYFD)
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
House Bill 258 creates a new gross receipts tax credit for the state share of gross receipts tax due
on all taxable gross receipts of child daycare providers licensed by CYFD. The state gross
receipts tax rate is 5 percent in unincorporated areas and 3.775 percent in municipalities.
The provisions of the bill will be effective on July 1, 2008.
FISCAL IMPLICATIONS
TRD estimates that taxable gross receipts totaling $22.6 million will be eligible for the proposed
credit in FY09. About 91 percent of that tax base will be in municipalities and the remaining 9
percent will be in unincorporated areas. Taxed at 3.775 percent in municipalities and 5 percent in
counties, the proposed credit is expected to reduce general fund gross receipts tax revenue by
$876.9 thousand in FY09. Claims for the credit are expected to grow by 7.9 percent per year,
based on growth in that tax base from FY06 to FY07.