Prop 9 would deliver tax relief to small businesses

When you make a purchase at any small business in Texas, you pay sales tax once and go on with your day. But for small-business owners, it’s an entirely different story.

If you were able to defy physics, pick up a small business, and turn it upside down, anything and everything that falls out is subject to the Business Personal Property Tax, also known as the inventory tax.

Every item gets taxed, year after year, regardless of whether the business nets a profit. When I travel across the state and meet with job creators, the inventory tax is usually the first thing that comes up as a major challenge.

Our small-business owners want to create good jobs and meet their customers’ needs. But this tax makes that incredibly difficult. For one, it disincentivizes the business owner from keeping much inventory on hand, which makes it harder for them to compete with big-box stores.

But there is also a substantial administrative burden associated with the tax. The county assessor process is time-consuming, especially for small-business owners, who often are spread too thin anyway. Most small businesses do not have an army of attorneys or compliance officers at their disposal. If the assessor gets the appraisal wrong, it’s incumbent on the business owner to fight to make it right.

For too long, the inventory tax has been a costly burden shouldered by Main Street.

Thankfully, Texas lawmakers stepped up to deliver real tax relief for our small businesses. The National Federation of Independent Business led the effort to pass Rep. Morgan Meyer and Sen. Paul Bettencourt’s bill, HB 9/SB 10, to increase the inventory tax exemption from $2,500 to $125,000, only the second increase in the exemption since 1995. If approved by voters this November, it would save Texas small businesses more than $500 million annually.

With those tax savings, small-business owners will be better positioned to expand their operations, raise their employees’ wages and give back to their communities. It will also make Texas more competitive with neighboring states.

Now, it’s up to voters to make sure this tax relief becomes a reality and is enshrined in the Texas Constitution.

Make your plan to vote today and vote yes on Prop 9 to support small businesses and the hardworking Texans they employ.

Jeff Burdett is state director for the National Federation of Independent Business.