Sales Tax

sales tax map

 

Texas Sales and Excise Taxes
Texas levies a 6.25% general sales or use tax on consumers, which is above the national median of 5.95%. The average local sales tax rate is an additional 1.8%. Texas’s state and local governments collect $1182 per person in general sales taxes and $573 per person in excise taxes, for a combined figure of $1755, which ranks 13th highest nationally. Texas’s gasoline tax stands at 20¢ (9th lowest nationally), while its cigarette tax stands at $1.41 (24th highest nationally.)
Texas Sales and Excise Taxes

 

Problems:

  • Roughly 26% of all state revenue comes from the sales tax, which is a regressive tax
  • Studies have found that tax compliance costs for small retailers are disproportionately higher as a share of sales tax collected than for larger retailers. Texas’ current discount structure compensates all businesses the same for collecting and remitting sales taxes,regardless of their size or sales volume

Solutions:

  • Amend the Texas constitution to close corporate loopholes just for filing sales taxes. Increase the timely filer discount to 0.75% and limit the amount a vendor can retain in the form of the timely filer discount to$3,750 per tax year. This corporate loophole costs the state of Texas roughly $140 million annually.
  • Amend the Texas constitution by closing corporate loopholes for filing taxes on early. Adjusting the prepayment discount rate to the lesser of 1.25% or the rate that yields an annualized rate of return of 4% over the prime rate. This corporate loophole costs the state of Texas roughly $150 million annually.
  • Amend the Texas constitution to close corporate loopholes for leasing companies. Impose a tax of 6.25% on the gross receipts of a leasing contract, similar to the tax for rentals of motor vehicles of 30 days or more
  • Amend the Texas constitution to close a hotel occupancy tax loophole. This corporate loophole costs the state of Texas roughly $35 million annually.
  • Raise the state beer excise tax to the average of the four states surrounding Texas and then index it to inflation
  • Raise the state distilled liquor tax to the average of the four states surrounding Texas and then index it to inflation
  • Amend the Texas constitution to close the corporate loophole for containers. This corporate loophole (page 5) costs the state of Texas roughly $250 million annually in 2015.
  • Amend the Texas constitution to close the loophole for a basic fee for internet service. This loophole (page 5) costs the state of Texas roughly $300 million annually in 2015.
  • Amend the Texas constitution (3) to close the loophole allowing for services performed directly on the product being manufactured prior to its distribution for sale and for the purpose of making the product more marketable
  • Create a jet fuels tax to the average of the four states surrounding Texas and then index it to inflation, just like 48 other states
  • Clarify eligibility for the exemption of property used in manufacturing from the sales and use tax

 

Texas Constitution
Code – Tax Code
Chapter – 151 Limited Sales, Excise and Use Tax
Section – 151.308 Items Taxed by Other Law
Section – 151.322 Containers
Section – 151.318 Property Used in Manufacturing
Section – 151.423 Reimbursement to Taxpayer for Tax Collections
Section – 151.424 Discount for Repayments
Chapter – 152 Taxes on Sale, Rental, and Use of Motor Vehicles
Section – 152.025 Tax on Gift of Motor Vehicle
Section – 152.026 Tax on Gross Rental Receipts
Chapter – 156  Hotel Occupancy Tax
Section – 156.101 Exception Permanent Resident
Chapter – 183 Mixed Beverage Taxes
Section – 183.021 Tax Imposed on Gross Receipts of Permittee from Mixed Beverages

Code – Alcoholic Beverage
Chapter – 201 Liquor Taxes
Section – 201.03 Tax on Distilled Spirits
Chapter – 203 Beer Tax
Section – 203.01 Tax on Beer

 

Texas Municipal League – Amazon.com Agreement and City Sales Taxes

Internet sales taxes can be pro-economic growth, not just a state money grab

U.S. Green Party – Fair Taxation

Shifting from Income to Sales Taxes Won’t Boost State Economies

Don’t Buy the Sales Tax

Four Steps to Moving State Sales Taxes Into the 21st Century

Why Amazon Supports An Online Sales-Tax Bill

The Texas Politics Project – Progressive and Regressive Tax Systems

How Local Sales Taxes Target the Poor and Widen the Income Gap

Regressive Taxes Are Neither New Nor Good

States Debate Who’s Helped, Hurt in Shifting Tax Burdens

States Should Be Allowed to Tax Internet Sales

Congress Should End – Not Extend – the Ban on State and Local Taxation of Internet Access Subscriptions

Internet Sales Tax Could Reap $23 Billion For States

State and Local Governments Should Close Online Hotel Tax Loophole and Collect Taxes Owed

Pew – Decried as Unfair, Taxes on Groceries Persist in Some States

Pew – FAA Limits Use of States’ Aviation Fuel Taxes

Texas Tribune – Cable and Satellite Providers Square Off Over Tax Break

Texas Tribune – Bonnen’s $4.9 Billion Tax Cut Plan Targets Sales Taxes

Texas Tribune – Analysis: A Sales Tax Cut, If Anybody Wants It

Wall Street Journal – Why Data Centers Collect Big Tax Breaks

Dallas Morning News – For ideology and industry, Texas Legislature passes lots of little tax breaks, and they add up

Wall Stret Journal – Texas Alters Analysis of Tax Cuts To Account for Economic Effect

Center for American Progress – Five Problems with Dynamic Scoring: It’s a Bad Method for Estimating the Cost of Proposed Legislation

Governing – The States’ Disappointing Experiences With Dynamic Scoring

Vox – Dynamic scoring is a good idea with big problems

Dallas News – Reagan economist Arthur Laffer said closing loopholes for online sales taxes creates jobs; worth 155,882 in Texas

USA Today – Amazon strikes deal to collect Texas sales tax

CBPP – State and Local Governments Should Close Online Hotel Tax Loophole and Collect Taxes Owed

NPR – FAA Clarifies Fuel Tax Rule, Municipalities To Lose Needed Funds