TSCPA Governmental Affairs

$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.