FOR IMMEDIATE RELEASE Contact: Bill Hammond
Jan. 16, 2013 Phone: (512) 637-7701
TAB Proposes Tax Relief Plan
AUSTIN, TX— The Texas Association of Business (TAB) today announced a plan to utilize a portion of the state’s surplus dollars for broad-based tax relief.
The Comptroller announced last week that there will be $8.8 billion left unspent in the current budget and that the Rainy Day Fund will grow to $11.8 billion. TAB President and CEO Bill Hammond is joining with legislative leaders and Governor Rick Perry in supporting tax relief for the businesses and consumers of Texas.
“We will have over four billion dollars that can’t be spent by lawmakers because of constitutional spending limits,” said TAB President and CEO Bill Hammond. “That money should be given back to the taxpayers and businesses of this state that paid the money in the first place.”
The majority of taxes paid in Texas come from business. That money not only comes from the franchise tax, but also from property taxes and the sales taxes that businesses pay. In 2011, according to a Center on State Taxation (COST) report, Texas businesses were responsible for $56.8 billion of all taxes paid in Texas for that year alone.
TAB’s Tax Reduction Plan calls for:
- Making permanent the one million dollar franchise tax exemption for businesses.
- Allowing all businesses to exempt the first million dollars of gross receipts for business taxation.
- Decreasing the franchise tax rate by a quarter percent.
- Creating a research and development tax credit.
- Passing targeted sales tax exemptions for consumers, including college text books and computers.
“We support making the one million dollar franchise tax exemption permanent,” said Hammond, “and we support expanding that exemption to allow for a one million dollar deduction for all businesses, not just those with one million dollars or less in gross revenue.”
For example, if a business has gross receipts of $1.2 million, that business would only pay taxes on $200,000. That would save Texas businesses around $1.8 billion a biennium.
TAB also proposes a quarter percentage cut in the business franchise tax rate. That would lower the tax impact on businesses in Texas by $2.4 billion over the biennium. The savings could be used to create jobs and invest in new equipment and facilities to improve productivity and grow the Texas economy.
“We also support a tax credit that would kick-start research and development in Texas. That would save businesses around $300 million over the biennium, and would create more jobs,” said Hammond.
TAB is also calling on lawmakers to consider targeted sales tax breaks for consumers. TAB supports ending sales taxes on college text books and exempting new computer sales from the sales tax.
“Not only would that benefit our students and people wanting to upgrade to the newest technology, it would also help Texas computer and chip makers increase sales,” said Hammond.
“We realize that this is a starting point for discussions, but we don’t think that this is an opportunity that can be passed up by lawmakers and the leadership,” said Hammond. “We believe that this is an opportunity for lawmakers to give Texas businesses more opportunities to grow and flourish.”
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Founded in 1922, the Texas Association of Business is a broad-based, bipartisan organization representing more than 3,000 small and large Texas employers and 200 local chambers of commerce.