TSCPA Governmental Affairs

Panel to hunt for nontax revenue

Lt. Governor David Dewhurst plans to appoint a special Senate subcommittee to find $5 billion in nontax revenue for use in the next biennium.

Read the San Antonio Express-News coverage here.

Combs raises revenue estimate

The state's budget outlook is improving and lawmakers will have more  money to spend than they thought, Comptroller Susan Combs said in a  letter to legislative leaders today.

Read the Texas Tribune's coverage of this developing story.

The Austin American-Statesman has fleshed out the impact of the revised estimate on the budget shortfall here.

“That’s a tax hike and that’s not what we are going to be working on this session.”

So said House Ways and Means chairman Harvey Hilderbran (R-Kerrville) when asked about eliminating sales tax exemptions.

Hilderbran has previously opined that his committee is not interested in broadening the sales tax base. That’s good news for CPAs concerned about sales taxes on professional services. Last session’s Ways and Means chairman, Rene Oliveira (D-Brownsville), reportedly had identified $1.5 billion in sales tax exemptions “ripe for elimination.”  The more conservative Hilderbran says he sees the opportunity to raise as much as $500 million by tinkering with better enforcement and closing a few loopholes.  Read more about Hilderbran’s ideas in “Key lawmaker tightens tax grip.”

First Call for Sales Taxes on Professional Services

Rep. Ryan Guillen (D-Rio Grande City), writing in the Corpus Christi Caller blatantly calls for tax increases. He gets very specific, including a call for expanding the sales tax base to include business/professional services.  Fortunately, as reported in the Fort Worth Star-Telegram, House Ways and Means committee chairman Rep. Harvey Hilderbran opined “most lawmakers have no interest in broadening the sales tax base.”  All tax bills must first be approved by Ways and Means before they can be considered by the legislature. 

Coinciding with Guillen’s call for more taxes was the issuance of a report by the state Comptroller titled Tax Exemptions and Tax Incidence, which is 68 pages of how to raise taxes by eliminating exemptions, exclusions and credits. The report shows that a sales tax on business and professional services would generate almost $12 billion in new state revenue over the next biennium. Included in that amount is $511 million attributable to accounting and auditing services.

In addition to calling for the expansion of the sales tax base, Guillen also suggests “a half-cent sales tax increase, a one-fourth-percent franchise tax hike, a half-cent gas tax increase, a 59-cent cigarette tax increase, an Internet purchase sales tax, a one-half-percent motor vehicle sales tax increase, a 1-cent beer tax and a 1 percent soda tax to raise a combined $9 billion.”