The Senate has once again chosen to go its own way on a new tax plan.
The Senate Finance Committee late Thursday voted 9-5 to pass a bill that links property tax cuts to voter approval of a tax on all business entities, other than sole proprietorships. Under current law, only corporations are taxed, and many of those have used legal loopholes to avoid the franchise tax.
The full Senate debates the measure, which also includes a half-cent-per-dollar increase in the sales tax and higher cigarette and alcohol taxes, Sunday.
Senate leaders want to close those loopholes but broaden the tax base by also taxing service-related businesses that are organized as partnerships. Those include law firms, some medical practices and financial companies.
If voters approve, all companies except sole proprietorships would pay a 4.25 percent tax on net income plus payroll, with a deduction of $30,000 per worker.
This new tax would replace the corporate franchise tax.
Lt. Gov. David Dewhurst said Friday that he'd heard some key business groups were lobbying against the plan.
"It may be the Texas Association of Business and the Texas Oil and Gas Association prefer the House plan. Golly gee, it moves $1 billion of taxes from business onto individuals and consumers. Duh, that's kind of easy," said Dewhurst.
There was a lot of action on the House side this past week. Here are some blog links to help you catch up:Posted by Charles Kuffner on July 09, 2005 to Budget ballyhoo | TrackBack