News from the Tax Reform Commission

A new proposal from the Texas Tax Reform Commission is being discussed around the Capitol.

To read a summary of this new proposal, click here.

It’s important to note that under the proposal as currently drafted, the so-called margin tax would apply to all business entities, including accounting firms and services.

There is indication that some professional organizations are already expressing opposition to the $300,000 threshold on compensation deductions – the preference is that figure be higher.

Now here’s what we’re hearing from the rumor mill: the margin tax proposal has opposition from within the Tax Reform Commission, specifically from members who would seek to

  • raise all sales tax to a flat 10%
  • broaden the sales tax base to include services – including accounting/professional services
  • eliminate the franchise tax completely.

What are your thoughts?

Do you support the $300,000 threshold for compensation deduction? If you don’t, would you support raising that threshold amount?

And what about raising the sales tax rate to 10% and adding services – including accounting services – to the tax base in exchange for elimination of the franchise tax?

To participate in a TSCPA member survey about the proposal, click here.

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2 Responses to News from the Tax Reform Commission

  1. Michael Humphrey says:

    Texas’s sales tax rates are already some of the highest in the country. I would suggest to leave the tax rate alone and include services including accounting/professional services as taxable at current rates. I like simplicity over complexity.

  2. Mary Nell Mathis says:

    A 10% sales tax rate would be unconscionable. We should be lowering it, not raising it, especially if our services get taxed. This should be a different trade-off, separate from the property tax issue.
    The $300,000 threshold sounds all right. Or even $200,000. The effect will be like a 1% income tax on very high earners, paid by their companies. Pretty painless, on people who are feeling no pain.

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