Saturday, August 2, 2008

Texas Conservative Coalition Makes Business Tax Recommendations

Legislators to Recommend Changes to Business Tax

With thousands of Texas businesses filing the new business tax for the first time, members of the Texas Conservative Coalition, the conservative caucus of the Texas Legislature, announced the formation of a Business Tax Study Group to examine possible alternatives to the tax and necessary reforms to the new business tax.

Some options to be considered by the Study Group include:

  • Scrapping the tax altogether and replacing it with an alternative plan
  • Cut the rates at which the tax is levied in half.
  • Ensure that only profitable businesses pay a business tax.
  • Raise the small business exemption to at least $1 million in total revenue.
  • Prohibit small business tax liability increases of more than 100 percent.
  • Ensure that any business tax is equitable to all businesses, including small and capital-intensive businesses

State Representative Wayne Christian (R-Center), President of the Texas Conservative Coalition, noted: “With their backs against a wall two years ago, legislators met the Court’s school finance challenge by passing the largest property tax rate cut in this state’s history.” Christian added: “However, the Gross Margins Tax, which was one tool to pay for property tax rate relief, poses new challenges that we must now address.”

The Gross Margins Tax was passed in 2006 in order to raise the revenue necessary to fund reductions of school district property tax rates, as mandated by the State Supreme Court in its Neeley v. West Orange-Cove CISD decision. As a result of the Supreme Court’s 2005 decision, the Legislature had to reform the public education finance system by June 1, 2006 so that public schools could open in the Fall, 2006. Legislators approved the plan drafted by former Comptroller John Sharp.


1 comment:

Anonymous said...

Adopt the Fairtax Plan