As small businesses continue to recover from the pandemic and deal with record-high inflation and supply chain disruptions, now is the time for Texas to deliver meaningful tax relief for small businesses.
Our state finds itself in a unique position of deciding what to do with a budget surplus of nearly $33 billion. Discussions in the halls of our state capitol surround the opportunity for historic property tax relief, making it top of the list of how to spend the money. There is a lot of talk of tax relief, and some action — including the House and Senate proposing budget bills that allocate $15 billion towards property tax relief. Homeowners may be at the forefront of the conversation, but we can’t forget about the 3.1 million small businesses in Texas that also need meaningful tax relief.
Texas is one of only nine states in the U.S. that imposes tangible personal property taxes on businesses, also referred to as the inventory tax. Businesses pay a tax on almost everything in their building, such as furniture, computers, equipment and supplies that are used to generate income. This not only raises the cost of doing business in Texas but also imposes an additional tax for those small businesses that own real estate. While homeowners are eligible for exemptions or caps on property taxes, and large corporations can receive property tax abatements from the state, small businesses are not eligible for the same exemptions or caps, leaving only minor tax relief options.
We remain proud that Texas continues to lead the nation in job creation and has been ranked the best state for business by Chief Executive Magazine for 18 consecutive years, but we cannot afford to be complacent. More can and should be done by our Legislature to ensure Texas remains the best state to do business in the country. To do this, legislators should take a hard look at the current tax structure and focus on reducing the tax burden on small businesses.
Gov. Greg Abbott and Lt. Gov. Dan Patrick have both expressed support for raising the business personal property exemption to $100,000. It’s a good starting point and would provide small businesses with tax relief, but the legislature can and should do more.
Through feedback from our more than 900 members, we at the San Antonio Hispanic Chamber of Commerce know that small businesses continue to face the challenges of today’s economy. As such, and in partnership with our newly formed statewide Texas Hispanic Chamber of Commerce Coalition, we will advocate for meaningful tax relief for our small businesses as a top priority this legislative session, seeking support from those in voting positions to make this relief a reality.
With a record surplus and the ongoing challenges small businesses are facing, it is the right time to deliver meaningful tax relief to small businesses in Texas.