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JUNE 19, 2008
Hunter Calls for Margins Tax Reform
Former legislator says tax punishes small businesses
Former State Rep. Todd Hunter of Corpus Christi today called on lawmakers to reform the state’s new margins tax, saying it unfairly punishes small business owners and threatens to force some businesses to close their doors.
“This is nothing less than an income tax on small business,” said Hunter. “Small business owners are already overburdened with excessive red tape and now we have added to their tax burden at the same time we are seeing surpluses in the state budget.”
The Texas Margins Tax is a newly-created tax based on gross receipts, but the tax does not take into account whether a business is profitable before they have to pay the tax. Some Texas business owners have seen their business taxes skyrocket as much as 1,000 percent under the new margins tax, according to the National Federation of Independent Business.
“This is unacceptable,” said Hunter. “When I am elected to the House of Representatives I will work to make Texas a place where small business can grow and prosper, not one where Texans are punished for being entrepreneurs.”
Hunter, who served in the Texas House for eight years before leaving in 1997 to help raise his young family, is the Republican candidate for the District 32 legislative seat.
Additionally, Hunter urged local business owners to review HJR 44 which was filed last session. HJR44 was a proposal to require a constitutional amendment requiring any increase in a franchise tax rate to be approved by three-fourths of all the members elected to each house of the legislature. This type of legislation should be considered again by the legislature.
“We need to promote legislation that is positive and productive, not laws that are hindrances to creating more jobs and promoting the Texas economy.
The business tax has proven so confusing that the Texas Comptroller granted a 30 day extension to businesses who were unable to meet the May 15 due date for the franchise tax. The extension helped some small businesses avoid a 5 percent penalty they would have faced had they not filed by May 14.
Hunter said he supported efforts to review reforming the margins tax such as exempting small businesses that are losing money or barely making a profit; to raise the small-business exemption from $300,000 to a minimum of $1 million; and to limit the tax increase under the margins tax to no more than 100 percent growth over historic highs under the old franchise tax.
“Small business is the backbone of the Texas economy,” Hunter said. “Let’s help small business stay in business.”
For more information on the Todd Hunter campaign, please contact our headquarters at 361-949-8633 or go online to www.electtoddhunter.com.
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