TAB Issue Area:
Taxes and Spending
TAB Prosperity and Jobs Plan
 In order for state government to provide basic services to its citizens, it relies on the collection of taxes from those people and entities capable of paying them. The Texas business community pays its fair share of taxes at both the state and local levels. In fact, Texas businesses pay well over fifty percent of total taxes collected while businesses in other states pay on average forty percent
Business’ share of the overall tax burden is already substantial and should not increase in order to provide relief to other taxpayers.
Texas business knows it has an obligation to help fund the operation of public schools. The Texas Association of Business believes that our schools must be good stewards of the monies they spend to educate their students. We believe in less burdensome state mandates and true local control. In return for our financial investment in education, we ask for efficiency and accountability from those who are charged with educating our future workforce.
Equity. Business sector taxes must be equitably distributed among all businesses (service and manufacturing). Homeowners and businesses should share in supporting schools
Federal Funding. Support state policies and programs that maximize the receipt and use of federal matching and other funds for state purposes.
Fiscal Policy. Require government at every level to practice fiscal responsibility. State and local spending controls are desirable that restrict budget growth beyond population and inflation indices.
Franchise Tax. Eliminate or fix the franchise tax. Any fix or replacement of the franchise tax must be broad-based and equitable. Franchise or business taxes should not tax income sources not attributable to Texas. Any franchise tax should avoid “double dipping” by not taxing intercompany transfers and by deducting taxes already paid.
Gross Receipts User Fees. Oppose any attempt to retroactively or prospectively impose a percentage of gross receipts use fee or street crossing surtaxes on the transmission of natural gas, crude oil petroleum products, petrochemicals and other goods, through pipelines.
Incentives. Support government tax policy that is effective in increasing investment to create new jobs and expand economic activity. This would include specific exemptions, like those for manufacturing use, construction and electricity use, as well as, reasonable abatements, enterprise funds, and reinvestment zones.
Inventory Tax. Support elimination or reduction of local inventory taxes. Texas is one of only six states that permit the levy of a property tax on inventories. This places the state at a severe economic disadvantage.
Location of Payor. Oppose any component of a business or franchise tax that penalizes those located in Texas (location of payor).
Mandates. Oppose unfunded government mandates which shift the cost of financing programs to either the private sector or other levels of government.
Privatization. Encourage privatization efforts in government for increased efficiency and to reduce government spending.
Property Tax Relief/Tax Structure. Oppose efforts to increase the property tax burden since 58 percent of all property taxes are paid by businesses.
Regulatory Policy. Maintain a regulatory climate that does not impose hidden taxes on employers through excessive fees and fines and reduces excessive regulations to promote, rather than impede, economic growth and job creation.
Research and Development Tax Incentive. Support the continued expansion of tax incentives designed to aid our state’s research and development industries. Expansion of the Research and Development Tax Credit program would be one way to do this.
Right-of-Way Fees. Support legislation to promote consistency among municipalities in right-of-way fees assessed telecommunications providers, electric utilities and pipeline companies with facilities in city rights-of-way. The legislation would limit such fees to city cost of administration and maintenance of the rights-of-way, and require that such fees be assessed in a competitively neutral manner.
School Finance.
- School finance reform efforts should first address the equitable distribution of the tax burden prior to considering increases in the level of education spending in the state.
- The current funding plan should be revised only if a more balanced formula for distributing the tax burden can be adopted.
- Education funds should be equitably distributed among school districts and efficiently invested in the highest priority education needs.
- Education funding should support a favorable business climate in the state.
- Both business and the private sector must share in funding education in Texas.
- Any school finance plan should provide incentives to streamline and/or consolidate administrative functions.
Split Roll. Oppose any plan which splits the property tax rolls either by assessing different rates to business and homeowners or by making one a statewide tax. Oppose any tax plan or component that allows the state to treat businesses differently from homeowners.
Small Business Tax Relief. Support continued franchise tax relief for small business.
State Budget. Continue to support fiscal restraint in state spending. TAB will continue to seek savings by focusing on increased efficiency in the use of state resources while simultaneously urging a reduction in the state’s tax receipts.
State Tax System. Any revision in the business tax structure should reduce the percentage of state and local taxes paid by business or be revenue neutral and also reduce the administrative burden. Support a balanced state tax system that encourages the savings and investment necessary for the creation of jobs and that does not place a disproportionate share of the tax burden on business.
Tax equity. Support legislation that promotes equity in the taxing of insurers, recognizing that premium taxes result in higher costs for consumers.
Tax Exemption For Pollution Control Equipment. Oppose attempts to repeal or weaken the property tax exemption for pollution control equipment.
Telecommunications Infrastructure Fund. Support the repeal of the Telecommunications Infrastructure Fund mechanism once it has collected $1.5 billion as provided for under the 1995 enacting legislation.
Video Lottery Terminals (VLTs). Support legislation to allow the voters to decide whether to permit the installation of interactive video lottery machines at horseracing tracks with the funding to be dedicated to schools.
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