Margins Tax Repeal Emerges on First Day of Bill Filing
The Texas Legislature is set to convene on January 8, and today, incumbent legislators are able to begin pre-filing legislation. Right out of the gate, we’ve got our first bill to repeal the franchise (or “gross margins”) tax, SB 113 by Senator Craig Estes (R-Wichita Falls).
You’ve heard about why this needs to happen. This tax was sold to Texans as an equitable revenue generator that would lower property taxes statewide. Such was the fervor that in 2006, the Republican Party of Texas passed a platform that removed opposition to a franchise tax, giving the tax’s legislative supporters an excuse to ignore pleas from grassroots. But businesses and tax watchdog groups haven’t let up, and recently Texas’ tax climate rating was hurt because of the margins tax. The property tax burden has worsened in spite of the margins tax; businesses have been significantly wounded. This is a tax that should never have come into being, and must now be repealed.
Repeal couldn’t come at a better time, as businesses are facing some of the worst consequences of Obamacare and the coming fiscal crisis. Keep in mind, a tax burden on business is passed down – the check is actually written by consumers, in increased prices for services and goods. Make no mistake – higher taxes on business are really higher taxes on the citizenry at large.
In his press release, Sen. Estes stated,“We understand in Texas that businesses are job creators, and we must do all we can to alleviate the pressures they face in this difficult economy and the impending federal fiscal cliff.” He’s absolutely correct in this, as it will be up to the states to repudiate the federal administration’s reach and to relieve the tax burden in whatever way they can. Texas must take the lead in providing a welcoming climate for business, and repealing this onerous tax is a great beginning for the 83rd Legislative Session.