Fiscal 2009 revenues from the new Texas business tax probably will be $1.5 billion less than expected, but strong sales tax revenues should help make up the difference.
John Heleman, chief revenue estimator in the state comptroller’s office, said preliminary figures indicate total revenues from the business tax will be $4.5 billion rather than the $6 billion originally expected.
“It is a brand-new tax with a different base and a different set of rates,” Heleman told state legislators last week. “It’s our first year.”
The tax rate is 1% of gross receipts, but companies can deduct the cost of goods and employee benefits. The rate is 0.5% for retailers. Small businesses that earn less than $300,000 a year are exempt.
Half of the revenues from the new tax are dedicated to the state’s Property Tax Relief Fund, which was created in 2006 to reimburse Texas public school districts for the $14 billion of potential revenues eliminated when lawmakers mandated a reduction in local school property taxes.
Heleman said state sales tax revenues are expected to be up $600 million from fiscal 2008, with additional relief provided by $400 million in higher-than-anticipated state severance taxes on oil and gas production.
The business tax accounts for about 15% of the state’s tax revenue. Texas has no personal income tax.
