LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 148 HLS 21RS 671
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 9, 2021 10:31 AM Author: ECHOLS
Dept./Agy.: Revenue
Subject: Exclusion: Purchases by Osteopathy Schools Analyst: Benjamin Vincent
TAX/SALES-USE, STATE EN -$200,000 GF RV See Note Page 1 of 1
Exempts certain educational institutions from state sales and use tax on the lease or rental of tangible personal property
Current law subjects certain services and purchases, leases, rentals of tangible personal property to a combined state sales
and use tax rate of 4.45% through June 30, 2025, at which time these purchases will be subject to a combined rate of 4%.
Current law fully excludes certain purchases by certain accredited independent institutions of higher education from the
taxable base of purchases.
Proposed law excludes purchases by institutions accredited by the American Osteopathic Association Commission on
Osteopathic College Accreditation from the base of purchases that are taxable by the state.
Effective August 1, 2021.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. ($100,000) ($150,000) ($200,000) ($200,000) ($180,000) ($830,000)
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total ($100,000) ($150,000) ($200,000) ($200,000) ($180,000) ($830,000)
EXPENDITURE EXPLANATION
There is no anticipated direct material effect on governmental expenditures as a result of this measure.
REVENUE EXPLANATION
Proposed law would exclude transactions by certain institutions that provide osteopathic training from the state sales and
use tax base. The revenue impact of proposed law would reduce general fund revenue collections.
According to the accrediting agency named in the bill, one eligible institution exists within the state. The institution is part of
a multi-state system that currently supports 600-700 students at campuses in various states, and reports that it anticipates
approximately 600 active students once it has fully ramped up. Campuses in this system average approximately $38,000 in
expenditures per student.
Without specific sales taxable expenditure information, the revenue loss of the bill is recognized by assuming 20% of
institutional expenditures are subject to sales tax, and the number of eligible schools in the state remains at one. A rough
projection of a full year’s impact of the campus operating at its intended capacity implies a revenue impact of approximately
$200,000 at the current state sales and use tax rate of 4.45%. The tables above assume that the campus ramps up from
half-capacity in FY22, to 3/4 capacity in FY23, and to its intended capacity in all years following. The tables above also
reflect the sales tax rate being reduced to 4% for FY26, as provided in current law.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Gregory V. Albrecht
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Chief Economist
or a Net Fee Decrease {S}


Statutes affected:
HB148 Original: 47:301(8)
HB148 Engrossed: 47:301(8)
HB148 Enrolled: 47:301(8)