Texas sales tax relief

Texas sales tax relief on the legislative agenda

Sales tax relief is on the agenda for the state’s legislature with two bills presently under consideration. The first would lower the general sales tax rate for the first time in the state’s history, while the other would provide a unique tax “holiday” for hunters and gun enthusiasts.

Texas House Bill 32

On April 29, the Texas House of Representatives unanimously passed House Bill 31, which would reduce the statewide sales tax rate from 6.25% to 5.95%. This is only a floor, as individual cities, counties, transit authorities and other “special purpose districts” may impose additional sales tax. Under current law, the maximum sales tax in any Texas jurisdiction is 8.25%, according to the Texas Comptroller of Public Accounts.

If agreed to by the Texas Senate and signed into law by, House Bill 31 would take effect on January 1, 2016. The House concurrently passed a separate bill reducing the state’s franchise tax on business receipts. Texas Rep. Mark Keogh, a principal sponsor of both bills, said taxpayers would save nearly $5 billion if the two bills become law. “[S]ales and franchise tax cuts passed by the house will allow all Texans to retain more of their liquid cash in the immediate while extending tax cuts permanently into the future.”

Texas sales tax relief

The Texas Senate has proposed a “Second Amendment Sales Tax Holiday” for August 29 – 30 this year that, if passed, would repeal the general sales tax from firearms and hunting supplies.

Texas Senate Bill 228

Meanwhile, the Texas Senate passed its own, narrower sales tax break on April 30. Dubbed the “Second Amendment Sales Tax Holiday Act,” Senate Bill 228 proposes an annual two-day lifting of the state’s sales tax for purchases of firearms and “hunting supplies,” which would include “ammunition, archery equipment, hunting blinds and stands, hunting decoys, firearm cleaning supplies, gun cases and gun safes, hunting optics, and hunting safety equipment.” The tax holiday would take place on the final full weekend of August – this year, that would be August 29-30 – and is timed to coincide with the start of hunting season in Texas on September 1.

A Senate report argued the tax holiday is necessary because “retailers in East and Southeast Texas have been at a competitive disadvantage as it relates to their Louisiana counterparts.” Louisiana already has a sales tax holiday for firearms and hunting supplies during the first weekend of September. Mississippi and South Carolina also have similar holidays, according to the National Rifle Association. If signed into law, the Texas sales tax holiday is expected to reduce state revenues by about $3.6 million annually.

S.M. Oliva is a writer living in Charlottesville, Virginia. He edits the international legal blog PrivyCouncil.info

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