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For Texas small business owners – who represent 99.8% of all Texas businesses – every penny counts when it comes to increasing their bottom line and potential for growth.

This November, Texans will have an opportunity to deliver historic and meaningful tax relief for small businesses, saving them more than just a few pennies, but thousands of dollars in taxes on property they already own.

Proposition 9 would add an amendment to the Texas Constitution creating a $125,000 personal property tax exemption for small businesses that keep inventory – including for their products, storage, equipment, vehicles, and other property used for business operations. Under the current policy, also known as an ‘inventory tax,’ if a small business has inventory valued at $2,500 or more at the end of the year, the owner would owe taxes on all of it.

If passed, Proposition 9 would help Texas small businesses see major savings on taxes each year, allowing them to reinvest and scale their operations to reach more customers and create new jobs.

This groundbreaking reform, enabled by the passage of House Bill 9 and House Joint Resolution 1 by Rep. Morgan Meyer (R-Dallas) during the 89th Legislative Session, was a direct result of key policy recommendations from Governor Greg Abbott’s Small Business Freedom Council formed at the beginning of this year, on which I was honored to serve as co-Chair alongside National Federation of Independent Business (NFIB) Texas state director Jeff Burdett. Together, the Council worked to identify persistent challenges that small businesses in Texas face in navigating unnecessary government red tape, bureaucratic obstacles, and redundancies in regulations that impede business growth.

Most Texans familiar with our small-government, light-regulatory, pro-business environment would be surprised to learn that Texas is one of only 11 states with an ‘inventory tax,’ adding an additional cost burden for small business owners who are currently forced to pay taxes on the value of their inventory of products for sale, their personal property, and other assets used to generate income for their operations.

Through our work with the Small Business Freedom Council, we received valuable feedback from nearly 700 small businesses across the state, all of whom overwhelmingly identified business personal property taxes as the biggest burden on their operations.

NFIB also made clear that property taxes are far and away the “number one issue” they hear about from small business owners across the Lone Star State: “Year after year, they get taxed on these things they already own.”

Take it from Ashlyn Fajerson, a small business owner in Denison, who says the savings that enterprises like hers would see if Proposition 9 is passed could not come at a better time:

“Any money that is being either saved or given back as far as taxes goes… it really does kind of make or break you.”

Coupled with other critical pro-small business reforms passed this session – including removing unnecessary annual tax and reporting requirements, eliminating duplicative taxes, extending tax credits for research and development, and reducing or waiving filing fees when forming new entities in our state – Proposition 9 will further cement Texas’ position as the best state in the nation to start and scale a new business.

To seize the momentum our state leaders have carefully cultivated during one of the most pro-business legislative sessions in recent memory, Texans should overwhelmingly vote for Proposition 9 and help deliver permanent, meaningful tax relief for the small business enterprises that make up the vast majority of Texas businesses and employ millions of hard-working Texans.

Don’t wait until it’s too late – the deadline to register to vote for the upcoming November 4th Constitutional Amendment Election is Monday, October 6th, and early voting begins Monday, October 20th!

To read the full text and explanatory statement for Proposition 9, click here.

–Glenn Hamer, President & CEO, Texas Association of Business

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