TSCPA Governmental Affairs

Texas State Board of Public Accountancy Approves Fee Increases

On May 17, 2012 the Texas State Board of Public Accountancy (TSBPA) approved a planned increase to both CPA license fees and CPA examination fees. Individual CPA license fees will increase $11 and examination frees will increase $5 per examination section.

This will bring the license fee to a total of $51, including the $10 fee in support of the Fifth Year Accounting Student scholarship fund. The new examination fee will be $20 per section.

The fee increases were approved in conjunction with the start of budget preparations for the 2012-2013 fiscal year. While the exact date for the increase has not been set, the change will probably occur in the fall of this year.

Read more here.

Reversal on oil & gas sales tax ruling

We reported last week that Judge John Dietz was reconsidering his ruling to exempt oil and gas extraction equipment from sales tax.

Sure enough, he's reversed his decision.

Check out the Austin American-Statesman's coverage here.

$1,030,000 is the new franchise tax minimum revenue floor

The 2011 Legislature extended the $1 million minimum revenue requirement for paying franchise taxes through Dec. 31, 2013.  The amount is subject to inflation adjustments and State Comptroller Susan Combs announced that the inflation adjusted minimum revenue is now $1,030,000 for reports due in 2012.  The minimum revenue amount drops to $600,000 Jan. 1, 2014.

Judge Swayed by Public Outcry

Two weeks ago we reported that a coming court ruling could cost the state billions as Judge John Dietz indicated his intent to exempt oil and gas extraction equipment from the state sales tax, which by some estimates could cost the state over $2 billion.

According to the Austin American-Statesman, the judge read in the Wall Street Journal that some “Texas judge had recently overturned 50 years of tax law and crippled the state budget,” and Judge Dietz was evidently shocked to find that he was that “fool” judge.

Dietz has scheduled a “stinkin” rehearing on the issue and will rule within a week. He is worried about “being in error."

TSCPA member legislator Otto praises Amazon tax deal

State Representative John Otto (R-Dayton), a TSCPA member, has been at the forefront of the sales tax nexus issue in Texas, having authored last session's HB 2403.

Rep. Otto has praise for today's announced compromise between Amazon and the State Comptroller's office; click here (PDF) to read Otto's press release.

Amazon, State Settle Sales Tax Fight

The state will cease efforts to collect back sales tax from Amazon, and in exchange the retail giant will start collecting tax in July while building several new Texas warehouses, creating some 2,500 jobs.

Here's a brief summary from the Texas Tribune; no doubt more in-depth analysis will be offered throughout today's news cycle.

What do you think of the Amazon deal? Fair or no?

Amazon working on Texas sales tax collection deal

Arizona said no, Nevada said yes, Massachusetts is thinking about it and California is still figuring it out.

Could Texas be the next state to require online retail behemoth Amazon to collect sales tax?

It's starting to sound that way:

Texas Tribune: Amazon, Comptroller Negotiating Sales Tax Deal

Austin American-Statesman: Amazon, state working on sales tax collection deal

Amazon Agrees To Collect Sales Tax In Nevada

Amazon has agreed to begin collecting sales tax in Nevada, with an estimated $16 million going into the state's coffers annually as a result. That seems low, but maybe Amazon does less business in Nevada than they do here in Texas.

Arizona shot down a similar proposal just last month.

Coming Court Ruling Could Cost the State Billions

A pending ruling in a Travis County court to exempt oil and gas production equipment from state sales taxes could cost the state as much as $4.4 billion, according the Harvey Kronberg’s Quorum Report.

District Court Judge John Dietz has indicated he plans to rule in favor of a claimant that the manufacturing exemption for sales taxes applies to oil and gas production equipment. According to Kate Alexander’s post on the Austin American Statesman’s Postcards government and politics blog, the State Comptroller estimates exempting extraction equipment could cost the state $2 billion plus interest in refunds. Evidently the impact on the state’s revenue will depend on Dietz’s final ruling - whether it will be broad or narrow. There’s also a good chance the ruling will be appealed.

A copy of the state’s petition in the case is here.

A copy of the petition filed by Southwest Royalties Inc., is here.

 

No sales tax for Amazon in Arizona after all

Doubtless this isn't the end of the debate, but Arizona legislators have soundly rejected a plan to require Amazon to remit state sales tax.

Enron CPAs Lose at Appellate Court

The Texas State Board of Accountancy (TSBPA) has had an ongoing disciplinary action against three CPAs who were involved in Arthur Andersen's (AA) 1997 and 1998 audits of Enron Corporation’s financial statements. After extensive proceedings, TSBPA revoked the professional certificates of two Andersen partners and suspended the certificate of an Andersen senior manager, but probated the three-year suspension.

The CPAs appealed the action to the State District Court in Austin and won a summary judgment preventing TSBPA from enforcing the revocations and suspension on the grounds that the TSBPA had violated the Texas Open Meetings Act (TOMA) in the process of determining the case. On appeal, the Texas Court of Appeals reversed the summary judgment, ruling that TSBPA did not violate TOMA and remanded the case to the district court for further proceedings.

The appellate court’s opinion (PDF) was issued Feb. 24, 2012 and includes a brief recap of the entire case.

Past TSCPA Chairman Jeff Gregg appointed to MSU Board of Regents

Gov. Rick Perry has appointed Jeff Gregg, CPA, of Seymour to a six-year term on the Midwestern State University Board of Regents.

Jeff is the immediate TSCPA Past Chairman, having served for the 2010-2011 TSCPA year. You can see Jeff’s other notable accomplishments in the governor’s appointment announcement. Congratulations to Jeff for his continued public service.

Fraudulent "Phishing" Scam Designed to Look Like AICPA Email

TSCPA was just notified of two email scams designed to look like AICPA communications.

One has the subject heading 'Your accountant license can be revoked'. The other is headed 'Tax return fraud notification’.

Both emails are fraudulent; as with any other spam, don't open any attachments or click any links within these bogus emails.

See AICPA's notice on the matter here.

Texas Supreme Court Dismisses Constitutional Challenge to Texas Margin Tax

Today, Feb. 10, 2012, the Texas Supreme Court dismissed the Nestle USA, Inc., Switchplace, LLC, and NSBMA, LP, Realtors challenge to the constitutionality of the Texas Margin Tax for lack of jurisdiction.

Unlike the Allcat challenge, the court did not refer the issue to a district court but ruled that that petitioners did not have the right to sue for franchise tax refunds because “petitioners did not pay their taxes under protest or request a refund from the Comptroller, statutory prerequisites to taxpayer suits…” Evidently Allcat had filed under protest which allowed that case to be referred to a district court.

The Court explained that suits for tax refunds are only allowed under specific statutes and that petitioners did not meet the requirements of those statutes. This appears to end Nestle’s constitutional challenge to the tax.
You can read the nine-page opinion on the Texas Supreme Court website.

CPA Rep. John Otto Testifies Before Congressional Hearing

The Texas Retailers Association issued a press release commending CPA Rep. Otto (R-Dayton) for testifying before the U.S. House Judiciary committee in support of H.R. 3179, the Marketplace Equity Act which would create a constitutional framework for collecting sales taxes online.  Otto expressed concerns to the committee about the competitive disadvantage that arises between local retailers and online retailers when online retailers don’t have to collect the 8 to 10 percent state sales taxes. Otto said this gives the online retailer a “significantly unfair marketplace advantage.”

Don’t Fix the Margin Tax to Raise More State Revenues

That’s the cry of the Texas Public Policy Foundation (TPPF) in reaction to the Supreme Court’s ruling that the margin tax is constitutional, and further that an income tax on partnerships and unincorporated associations does not violate the Bullock amendment of the Texas Constitution.

In a press release yesterday TPPF announced a new report entitled The Margin Tax Debunked (PDF). The press release and report are clearly aimed as the first shot across the bow of those legislators calling for more revenues from the franchise tax. The release points out that Speaker Straus has charged the Ways and Means committee with the task of evaluating the margin tax and determining if it should be altered or replaced and seeks to dispel what it calls “common myths regarding the franchise tax.”  It says the margin tax revenue shortfalls have not crippled the state’s revenue system nor caused the so-called structural deficit; the margin tax does not need to be “fixed to increase state revenues;” and the margin tax was never intended “to completely absorb the cost of statewide property tax relief.”

The full report can be found on the TPPF website.

Court Ruling Allows Fixes to Franchise Tax Inconsistencies

When the margin tax became the Texas franchise tax, legislators took great pains to make sure it was not an income tax.  Those great pains caused inconsistencies in the amount of taxes paid by different industries and even taxpayers in similar businesses.  The Supreme Court’s ruling that an income tax can be levied on business entities, including partnerships and unincorporated associations, means the legislature has the opportunity to eliminate those inconsistencies.

Fixing the tax may not necessarily raise more revenue, however, and the Texas Association of Business says it shouldn’t because business taxes in Texas are already high.  CPA Rep. John Otto (R-Dayton) says, "There should be a certain amount of revenue that the franchise tax can raise without being a hindrance to business, where we can remain competitive with other states."

While not calling for a tax increase, Rep. Mike Villarreal (D-San Antonio) says that when changes are made we need to have a tax that “grows with the economy.”

You can find all of this and more as Kate Alexander reports on different views about fixing the tax in the Austin American-Statesman.

Margin Tax Ruled Constitutional By Texas Supreme Court

On Nov. 28, 2011 in the Allcat Claims Service L.P. and John Weakly (Allcat) case the Texas Supreme Court ruled that the Texas franchise tax, often referred to as the margin tax, is a constitutional tax.

The court ruled that a tax on business partnerships and associations was not a tax on the personal income of the partners and therefore did not violate the so-called Bullock Amendment to the constitution which requires approval by voters before a personal income tax can be levied.

The ruling not only eliminates the constitutional uncertainty over the margin tax, but also opens the door to legislators to levy a true business income tax. TSCPA member Jimmy Martens, attorney-at-law and CPA, who argued the case before the Supreme Court on behalf of Allcat provided us with a short explanation of the court’s decision (.PDF). A brief news account of the decision can be found in the Austin-American Statesman.

In addition to claiming the margin tax violated the Bullock Amendment, Allcat claimed that the Comptroller’s interpretation of certain franchise tax provisions violates Allcat’s right to equal and uniform taxation under the Texas Constitution. The Supreme Court denied jurisdiction over this matter and referred it to the District Court in Austin. Read the entire court decision here.

There is another margin tax constitutional challenge before the Supreme Court. The suit was filed by Nestle USA, Inc., Switchplace, LLC and NSBMA LP (Nestle) claiming that the margin tax violates the Equal and Uniform Clause of the Texas Constitution as well as the Equal Protection Clause, the Due Process Clause and the Commerce Clause of the United States Constitution. Oral arguments are set for Jan. 12, 2012 in that case. At least one news article speculated that the Nestle case will be referred to the Austin District Court. For more details and reference to the case filings visit the TSCPA Government Affairs Blog.

Comptroller Issues Second Request for Information to Preserve Temporary Credit

We reported earlier about the Comptroller’s Oct. 1, 2011 letter to the reporting entities of all combined groups that claimed a temporary credit for business loss carry-forwards on a 2008, 2009 or 2010 franchise tax report. The letter required the reporting entities to provide the name of the entity or individual that owned, directly or indirectly, more than 50 percent of all of the entities included on the combined report. The reporting entity had to also include the Texas business loss carry-forward as of Jan. 1, 2008, for each affiliate that filed a preservation form in 2008 or that was the basis of a temporary credit for business loss carry-forward claimed on the franchise tax report.  The due date for the information was Oct. 31, 2011.

Some 8,655 taxpayers did not respond to the Oct. 1 letter so the Comptroller has sent a second request to those taxpayers with a Dec. 19 deadline for responding.  Taxpayers that do not respond face the possibility of losing any future credit for their business loss carry-forwards.  For more information check out Important Information to Ensure Franchise Taxpayers Keep Their Temporary Credit.

More Chinks in the Armor?

About two weeks back we reported that Speaker Joe Straus opined “I think at some point you can’t cut your way to prosperity.”  We wondered if that was a chink in the armor of the no new taxes mantra.

This week Senator Tommy Williams (R-The Woodlands), Chairman of the Senate Transportation and Homeland Security Committee, remarked, "We've got to start having some honest conversations with our constituents about what it takes to run state government," and retiring Senator Steve Ogden (R-Bryan) suggested a voter referendum on a business income tax.  Williams stopped short of suggesting tax increases, but suggested almost doubling the vehicle registration fee.

On the other hand, John Otto (R-Dayton), House Appropriations Subcommittee Chair and Vice-chairman of the Ways and Means Committee, suggested the Margin Tax needed revision, but he didn’t agree with Ogden that we needed a referendum: "I don't think we ought to use it [Margin Tax] for the fix for the shortfall.”

All were speaking at a meeting of the Texas Taxpayers and Research Association as reported by Kate Alexander in the Austin American-Statesman.  Sen. Ogden won’t have to worry about it but Williams and Otto are seeking re-election.  Can Republicans hold such “honest conversations with our constituents “about the “shortfall” before an election?

State Comptroller Notifies Taxpayers of Second Chance to Preserve Temporary Tax Credits

Last week we reported that State Comptroller Susan Combs would be offering a Second Chance to Preserve Business Loss Carryforwards.  Earlier the Comptroller issued a letter to taxpayers asking for additional information in order to preserve the temporary tax credits allowed for taxpayers with loss carryforwards from the old franchise tax (before the margin tax).  The original letter had an October 31, 2011 deadline.

The Comptroller’s website now includes specific notice that taxpayers who have not responded by Oct. 31 will get another opportunity.  See Important Information to Ensure Franchise Taxpayers Keep Their Temporary Credit.

A Chink in the Armor?

“I think at some point you can’t cut your way to prosperity,” so said Speaker Joe Straus in El Paso Thursday. Straus suggested that the legislature would have to address the Texas structural deficit “now.”  "We have no choice, unless we want to continue to try to grow our population and continue to shrink spending significantly," Straus said. You can read all about the Speaker’s comments in the El Paso Times’ article Texas House Speaker Joe Straus: We have to correct the deficit.

Straus also said it was time for the legislature to look at the margin tax again, regardless of the outcome of the constitutional challenge to the tax now before the Supreme Court.

Is this the first chink in the “no new taxes” armor? Or will it be a chink in Straus’ bid to continue as speaker? Check in after the elections.

Second Chance to Preserve Business Loss Carryforwards

On Oct. 1, 2011 State Comptroller Susan Combs sent a letter to the reporting entities of all combined groups that claimed a temporary credit for business loss carry-forwards on a 2008, 2009 or 2010 franchise tax report. The letter required the reporting entities to provide the name of the entity or individual that owned, directly or indirectly, more than 50 percent of all of the entities included on the combined report. The reporting entity had to also include the Texas business loss carry-forward as of Jan. 1, 2008, for each affiliate that filed a preservation form in 2008 or that was the basis of a temporary credit for business loss carry-forward claimed on the franchise tax report.  The due date for the information was Oct. 31, 2011.

TSCPA has been informed by the Comptroller’s office that the submission will be accepted even if it is received subsequent to Oct. 31.  Any combined group that did not respond to the initial letter by Oct. 31 can expect to receive a follow-up letter with another opportunity to respond.

While the final deadline for compliance was not stated, Comptroller staff indicated they wanted to give every subjected entity an appropriate opportunity to respond before terminating the entity’s temporary credit. This explanation has now been posted to the State Comptroller's website under Frequently Asked Questions.

Margin Tax Results Mixed in Meeting Policy Goals

The Texas Taxpayers and Research Association (TTARA) has issued a new analysis of the Texas margin tax: Understanding the Texas Franchise – or “Margin” – Tax.  The analysis reviews the results of the margin tax against the original policy goals for the tax. The results are mixed. The scorecard:

• Align the tax with a modern economy: Somewhat successful, especially in raising tax revenue from the service sector that is more in line with that sector’s share of the economy.
• Create a simpler business tax: The tax is more complicated than anticipated and more complicated than the former franchise tax.
• Eliminate tax planning opportunities: The tax did eliminate the massive tax avoidance schemes successful under the former franchise tax.
• Raise roughly $3 billion in new state revenue annually: The tax has collected between $1.4 billion and $2.5 billion less revenue per year than projected.

Even though the tax only met two out of four goals, TTARA says not meeting the revenue goal is a good thing because it keeps the primary Texas business tax more in line with other states. If the original revenue goals had been met Texas would have one of the higher state business tax.

TTARA also points out that while the tax does match the economy closer than the previous tax, the overall tax burden is still heavier on manufacturing and production companies than other sectors. The analysis also shows that this closer matching of the economy resulted in huge tax increases for some sectors. The tax liability on the information technology sector increased 162%, transportation sector 101% and for professional services, including CPAs, the increase was 88%. The result is likely a combination of making unincorporated entities subject to the tax plus more limited deductions for the service sector businesses. In terms of size, very small businesses saw their tax burden drop 46% while the next size category, businesses with revenues of $1 to $10 million, saw the largest percentage increase at 72% as compared to the average overall increase of 46%.

The analysis ends with speculation about reforming the franchise tax - again. Two possibilities are mentioned:

1. Simplify the tax by reducing deductions and making it more like a gross receipts tax, or
2. Shifting the tax base to net income.

Both concepts have pros and cons. Going to gross receipts trades off simplicity for potentially making the tax less reflective of the economy. Going the income tax way likely requires a higher tax rate than palatable to business entities.

For a short review of the analysis you can read Kate Alexander’s article in the Austin American-Statesman, but for a full understanding read the entire report, which is only six pages.

Oral Arguments in Margin Tax Constitutional Challenge

Monday, Oct. 24th the Texas Supreme Court heard oral arguments in the Allcat Claims Service case challenging the constitutionality of the margin tax.  Each side in the case had 30 minutes to present arguments and much of that time was taken up by the lawyers responding to questions from the Justices.  Ample evidence was submitted to demonstrate that Bob Bullock definitely was trying to require a referendum if the legislature wanted to levy an income tax on personal income, including partnership income.  Most of the arguments were centered on whether or not the state could tax a partnership as a separate business entity without running afoul of the Bullock Amendment.  Other statutes were cited in support of the separate entity theory amid the question of whether Bullock got it right in the amendment, even if his goal is clear.

There was very little argument about whether or not the margin tax is an income tax.  TSCPA member Jimmy Martens, speaking for Allcat, pointed out that all income taxes are taxes on gross revenue less statutory allowed deductions; just like the margin tax.  There didn’t seem to be any attempt to counter that argument with the state’s attorney concentrating on the business entity taxation premise.

Towards the end of the session, in response to a question from the bench, Martens offered the possibility of a judicial remedy that is only prospective.  Evidently there is precedent for such a solution based on the Carrollton-Farmer’s Branch ISD v. Edgewood ISD Supreme Court ruling.  The prospect of requiring the state to refund at least millions to partnerships with natural persons as partners during a time of fiscal distress for the state must be daunting to the Justices.  Perhaps opening the door to only fixing the future will keep the fear of the results from unduly influencing the legal outcome.  Martens has provided TSCPA with this explanation of the judicial rationale to support a prospective-only ruling.

If you are interested in the proceedings, you can hear the complete one hour, seven minute recording here.

What Do CPAs Think About the New Tax Plans?

Republican presidential candidate Herman Cain has been touting his 9-9-9 Plan and now Governor Perry offers his version of the flat tax.

Cain’s plan calls for a 9% business tax, a 9% personal income tax and a 9% federal sales tax. It’s actually a little more complicated that that, but it is a proposal to drastically change federal taxation as we know it.

Now Perry proposes Cut, Balance and Grow; a 20% flat tax on both business and personal income (although he says you can keep paying 35% if you prefer). Perry also proposes the first $12,500 of income per person tax free and allowing deductions for taxpayers with less than $500,000 in income (that’s just about everyone). He will also eliminate taxes on social security income and investment income.

Both plans are decried by critics as regressive, rich-people-centered give-aways, but is that really the case? Will they stimulate the economy? Will they raise needed revenue?

What do CPAs think about these radical proposals? Check out the links and let us know what you think.

Speaker Straus Issues Interim Committee Charges

While legislators do the heavy lifting during the biannual legislative session, they also are active in the interim between sessions. The Speaker of the House and the Lt. Gov. issue specific charges to each standing committee of the legislature. Speaker Joe Straus issued the House committee charges this week.

Straus issued two blanket charges to all committees:

• Study and make recommendations for significantly improving the state’s manufacturing capability.
• Find ways to increase transparency, accountability and efficiency in state government.

Of the 38 pages of committee charges, there are at least two charges of interest to CPAs.  The first charge to the Ways and Means committee, emphasis added:

Evaluate the state's tax structure and determine its impact on the competitiveness of the Texas business climate. Specifically, determine the impact of the state's major taxes, including the sales tax and franchise tax, as well as tax exemptions, exclusions, and credits on economic growth, capital investment, and job creation in Texas. As part of this review, evaluate the franchise (margins) tax and determine whether the tax structure should continue to exist in its current form or in a revised form, or whether the existing tax structure should be repealed and replaced with a different business tax.

During the last legislative session there was much discussion about the franchise tax and a number of legislators expressed publicly their view that the tax needed revision or replacing. The budget crises in the state essentially prevented the legislature from devoting time to the issue. There was discussion during and after the session of a joint select committee to be appointed by the Speaker and the Lt. Gov. but that idea was dismissed and the task has fallen to the Ways and Means committee. With two lawsuits challenging the constitutionality of the tax and the school district lawsuit challenging the constitutionality of school funding, substantive changes to the franchise tax could be in our future.

One of the charges to the Licensing and Administrative Procedures committee might also be of concern to CPAs:

Study the feasibility of streamlining the process to obtain an occupational license. Consider consolidating all occupational licenses under one state agency and whether such a move would increase efficiency and effectiveness. Analyze the process being used in other states.

Every few years the suggestion to consolidate occupational licensing is studied. In fact the Texas Department of Licensing and Regulation is already a consolidated licensing agency that administers 28 occupational and business licenses ranging from Auctioneers to Polygraph Examiners to Water Well Drillers. Each time this issue has been studied in the past, it has been determined that professional licenses (CPAs, Attorneys, Architects, Engineers, etc.) should not be consolidated into one agency. Hopefully, once again, legislators will differentiate between “occupational” and “professional” licensing.

There are many other interim charges that could result in proposed legislative changes that affect CPAs and taxpayers. The Appropriations and Ways and Means committees share one charge:

Analyze increases in Texas's overall state debt burden and the role debt plays in the state's fiscal management. Recommend strategies to reduce the state's debt, as well as the calculation of the constitutional debt limit.

Despite the fact that the Texas Constitution requires a balance budget each biennium, there are numerous exceptions and Texas goes deeper into debt each year. Four of the ten constitutional amendments on the November ballot are to authorize more debt for Texas.

Here’s the link to all the House Interim Committee Charges.

Second Margin Tax Lawsuit Filed

The constitutionality of the Texas franchise tax is challenged again by a new lawsuit filed with the Texas Supreme Court. This case was filed by Nestle USA, Inc., Switchplace, LLC and NSBMA LP claiming that the margin tax violates the Equal and Uniform Clause of the Texas Constitution as well as the Equal Protection Clause, the Due Process Clause and the Commerce Clause of the United States Constitution.

Nestle claims that although the company is engaged only in wholesale activity in Texas, it must pay the one percent tax rate of a manufacturer because it has manufacturing facilities outside the state of Texas.

Switchplace provides temporary accommodations services and complains that it is inappropriately denied the cost of goods sold deduction. NSBMA rents construction equipment and objects that it cannot claim a deduction for cost of goods sold while other types of suppliers of construction equipment do qualify for the deduction.

The suit was filed with the Texas Supreme Court as directed by the margin tax legislation and states that the Supreme Court jurisdiction is supported by Article V of the Texas Constitution and Texas Government Code, Section 22.002. The brief states that the franchise tax is a tax for the privilege of doing business in Texas and is unconstitutional because the tax “results in a non-uniform tax that causes similarly situated taxpayers to have a much higher taxable margin relative to their peers” and “provides certain ad hoc exclusions available to only some taxpayers.”  Click here to read the complete filing.

The initial case filed by Allcat Claims Service, LP and John Weekly to overturn the margin tax included the contention that the tax is a personal income tax and is therefore unconstitutional because it violates the Bullock Amendment requiring a referendum before such a tax can be implemented. There have been several friend-of-the-court briefs filed in that case including one filed by Nikki Laing, CPA and a host of others that included Nestle, Switchplace and NSBMA. The Laing brief supported the Allcat claims.

The Texas Association of Realtors and The Texas Taxpayers and Research Association (TTARA) have also filed briefs in support of the state’s position that the margin tax is not a tax on personal income.

You can find all the filings related to the Allcat case at The Supreme Court of Texas Electronic Briefing.

CPA Receives Texas Municipal League Award

CPA Rep. Raul Torres (R-Corpus Christi) received the Legislator of the Year award from the Texas Municipal League for his accomplishments during the session.

Torres served his first session in the Texas Legislaure in 2011.  The award is given in recognition of his “serving the needs and advocating the interests of Texas cities, large and small.” The press release stated that Torres “played a key role in defending municipalities and local control.”

More on this honor here.

2011 Tax Legislation

Texas state legislators stayed true to their “no new taxes” pledge during the 2011 legislative session, but they didn’t promise no new tax legislation: they passed a total of 34 bills that affected some type of state tax.

The Special Session’s Senate Bill 1 was a comprehensive fiscal matters bill necessary to balance the budget and it included numerous changes to tax laws. Senate Bill 934, passed during the regular session at the request of State Comptroller Susan Combs, included major changes in tax code administration and enforcement. The new laws affect sales taxes, franchise taxes, property taxes, sin taxes, occupancy taxes, insurance taxes, motor fuel taxes and maybe a few others.

Violations of tax law may now lead to criminal penalties, increased fines and more jail time. Tax investigators now have more authority and taxpayers have specific records retention requirements, not to mention a new $50 late filing penalty that applies to almost any type of state tax report.

Franchise tax changes which benefit certain taxpayers were enacted and the annual sales tax holiday was changed from August to July beginning in 2012.

To help you keep up with all these changes, State Comptroller Susan Combs has issued a new publication, Legislative Update – Focus on 2011 Legislation (PDF), summarizing all the tax law changes of the 2011 legislative session.  It’s a good guide with tax code and other statute references if you need to know the details.