|AUSTIN, May 13 - Smart fiscal policies and innovative approaches to strengthening the Texas economy have been a tenet of both the Texas Senate and House. For this reason, our state weathered the economic downturn better than most by creating jobs and spurring economic activity.
But we can’t just stand still. As we meet each legislative session, we continue to look for ways to strengthen the state’s economic climate by advancing policy that encourages additional private investment in Texas.
Which is why we joined together to co-author new legislation, CSHB 1133 and CSSB 1330, which would provide sales tax rebates for investment in technology telecommunications, internet access or cable equipment.
On this we can all agree – advancements in technology are critical to building a strong foundation to propel our economy forward. Businesses both large and small, educational facilities and consumers alike depend on cutting-edge technologies. But to get there, it takes a significant amount of investment by the manufacturing and technology industries to get us where consumers and businesses need to be to thrive.
Texas currently imposes a six percent state sales and use tax on equipment purchases made by technology and communications companies to upgrade and expand broadband networks.
This is money that’s better spent on expanded investment in the infrastructure and services we need for our economy to grow.
A recent study by the Broadband Tax Institute (BTI) found that by reducing the sales tax on investment we could see a widespread impact on the Texas economy.
According to BTI’s study, by providing up to $100 million in sales tax rebates per biennium for investments in communications networks, Texas would see $2.7 billion in new economic activity.
By passing CSHB 1133 and CSSB 1330, Texas leaders have an opportunity to create new resources for investment, innovation and job creation. In fact, the BTI study estimates that every one percent drop in applicable sales tax creates $358 million in new investment.
Through the additional investment and job growth generated by passage of CSHB 1133, key sectors including wholesale trade, accounting, finance and building trades would also see substantial economic benefits.
But at the end of the day – it’s about keeping Texas competitive and making our state the best place in the country to live and work.
Currently, Texas has the 8th highest tax rates on communications network equipment, and is only one of 30 states that charges this tax at all. Our state risks falling behind in the 21st Century economy when there are 20 states – plus the District of Columbia – where investment dollars go farther and more new jobs are created from maximizing network improvements.
For a state that has always been looked upon as a leader, this is simply unacceptable.
“Texas – Wide Open for Business” isn’t just a slogan. It’s a commitment that we as legislators make to keep our state the best place in the country to do business. And when industries are able to invest in Texas to make our state a better place to live and work, everybody wins.
Craig Estes is a state senator in Texas. A Republican representing District 30, he hails from Wichita Falls, Texas. John Otto is a state representative in Texas. A Republican representing District 18, he hails from Dayton, Texas.