LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 32 HLS 23RS 91
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 6, 2023 2:14 PM Author: SCHLEGEL
Dept./Agy.: Revenue
Subject: Personal Income Tax: Education Exemptions Analyst: Benjamin Vincent
TAX/INCOME TAX EN -$2,200,000 GF RV See Note Page 1 of 1
Increases the amount of the individual income tax deductions for elementary and secondary school tuition, educational
expenses for home-schooled children, and educational expenses for a quality public education
Current law allows deductions from taxable income for certain expenses for home-schooled children, and for a portion of
fees and other required expenditures for certain students in public and non-public schools. Current law allows a maximum of
$5,000 of such expenditures to be exempted per student for Personal Income tax purposes.
Proposed law increases the maximum exemption to $6,000 per student, applicable to amounts paid on January 1, 2024 or
later. Effective upon governor’s signature.
EXPENDITURES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW $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
REVENUES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. ($2,200,000) ($2,200,000) ($2,200,000) ($2,200,000) ($2,200,000) ($11,000,000)
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 ($2,200,000) ($2,200,000) ($2,200,000) ($2,200,000) ($2,200,000) ($11,000,000)
EXPENDITURE EXPLANATION
The Dept. of Revenue is anticipated to incur minor costs in additional staff time to modify and test tax systems to
accommodate these modified deductions.
REVENUE EXPLANATION
Proposed law increases the maximum income tax deduction available for three educational expense-related programs, from
$5,000 to $6,000 per student. The affected deductions include educational expenses for elementary and secondary school
tuition, educational expenses for home-schooled children, and educational expenses for a quality public education.
Per the March 2023 Tax Exemption Budget, anticipated revenue losses in FY23 due to these deductions in current law
amount to a combined $22.0 million.
The largest component of the anticipated revenue loss due to existing law is the deduction for nonpublic elementary &
secondary school tuition expenses ($18.7 million for FY23). Income tax filings data imply that a significant portion of these
deductions claimed are at or near the current maximum per student. For the purposes of this analysis, LFO assumes that
60% of claimants’ deductions will increase to $6,000 per student due to proposed law. Under this assumption, proposed
law is anticipated to result in an additional revenue loss of $2.2 million dollars annually via this deduction,
relative to current law.
The remaining deductions affected by proposed law- expenses for home-schooled students and expenses for a quality public
education- each average less than $100 of claimed expenses per claim, implying that very few claims are at or near the
current $5,000 maximum. Proposed law is thus expected to have a negligible revenue impact via these lower-
impact deductions.
The total revenue impact anticipated due to proposed law is an annual general fund reduction of approximately $2.2 million.
(For informational purposes: under alternative assumptions where the maximum potential exposure to state revenue was
realized, the annual revenue loss would be approximately $3.7 million.)
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}
Deborah Vivien
x 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:
HB32 Original: 47:10(A), 47:11(A), 47:12(B)(1)
HB32 Engrossed: 47:10(A), 47:11(A), 47:12(B)(1)
HB32 Enrolled: 47:10(A), 47:11(A), 47:12(B)(1)
HB32 Act 423: 47:10(A), 47:11(A), 47:12(B)(1)