News

Sign Up For Updates

A Look at the $4 Billion in Tax Relief Approved by the Texas House

Some of you have asked me recently to explain what kind of tax relief the Legislature provided when we met earlier this year. The fast-changing debate on this issue was at times difficult to follow, so I’m happy to provide some clarity about the consensus that we in the House reached with the Senate and Governor Abbott.

The strong performance of the Texas private sector created a budget surplus and allowed us to make tax relief one of the top priorities of this year’s session. In order to encourage continued economic growth, the House specifically focused on lowering the so-called margins tax on businesses. We reduced the margins tax by 25 percent, providing across-the-board relief for the small and large businesses that pay this tax.

Unfortunately, for about a decade, some professionals have been paying the margins tax as well as a $200 annual fee that allows them to operate in the state. This has raised concerns about double taxation. So this year, we in the Legislature abolished that $200 fee. This will create a direct savings for more than 600,000 Texans in a range of fields, including engineering, medicine and landscape architecture.

The other major component of the tax relief package that we approved this year was a proposed increase, from $15,000 to $25,000, of the amount of a home that is exempt from school property taxes. Because the homestead exemption is in the Texas Constitution, this legislation will go before voters for approval this fall. If it passes, and it should, then it will provide needed relief from increases in the property taxes that local governments collect.

Taken together, the Legislature approved more than $4 billion in tax relief this year. I’m proud of this record and grateful for the positive impact it will have on our economic future. If you have further questions about tax relief or any other issue, please email me at joe@joestraus.org.