Tax relief moved easily through the Texas House on Tuesday, a full month after the Senate passed their package. Both the House and the Senate are working to implement tax relief, but the two chambers currently differ over the proper method.
The Senate’s $4.6 billion package focused on property tax relief, while the House plan provides for $4.9 billion in relief emphasizing a sales tax cut. Both plans addressed cuts to the state business tax.
House Bill 31 and HB 32, authored by Rep. Dennis Bonnen (R-Angleton), passed overwhelmingly — 141-0 and 116-29, respectively.
HB 31 lowers Texas’ statewide sales tax rate from 6.25% to 5.95%. If enacted, it will be the first measure to have ever decreased the sales tax.
Meanwhile, HB 32 decreases the statewide franchise tax rate by 25 percent, saving certain businesses $2.6 billion over the 2016-17 biennium.
Rep. John Smithee (R-Amarillo) offered an amendment that would have increased certain businesses’ franchise tax exemption from $1 million to $4 million. However, the House tabled the amendment 120-16. Speaker of the House Joe Straus (R-San Antonio), who usually abstains from voting, cast a very rare vote against Smithee’s amendment.
UPDATE: While the speaker rarely casts votes, the original language implied Mr. Straus voted against HB32; he voted for HB32 but against the Smithee amendment. The article has been clarified.