Business Tax Comes Shortly in Texas

The Texas business tax comes again, and no one's suggesting it will yield anywhere near the approximately $6 billion it was initially forecast to produce annually.

It yielded $4.5 billion when first collected in 2008, based on the previous year's business activity. Last year, collections dipped to $4.3 billion. State Comptroller Susan Combs predicts the same amount will be collected this year.

Texas Comptroller Susan Combs sent tax-allocation checks totaling $6.3 million to the county’s sales-taxing cities Friday, almost $70,000 less than the amount they received at the same time last year. The total was almost 1.1 percent less than last year’s May figure and underperformed the Texas average allocation for the month.

Altogether, state cities received $385.2 million, 5 percent more than they did a year ago, to end a 14-month run of declining figures. The allocations came from sales taxes collected by monthly tax filers during March and by quarterly filers during January, February and March. Throughout the county, only Texas City, Friendswood and Hitchcock received more this year than in May 2009, with the latter’s figure a mere 0.6 percent higher than 12 months previously.
Experts cite several reasons the tax has failed to live up to expectations, including the fact that it is unique to Texas and, thus, difficult to forecast. The lagging economy also has factored in the lower-than-anticipated tax collection.