This Week in Texas: Wednesday, May 18, 2011

Posted May 18, 2011 in The Mignon Memo

Yesterday, Texas Comptroller Susan Combs announced that the state will have $1.2 billion more in general revenue funds to spend over the next two years. Combs said that she estimates that the sales tax, oil production tax and motor vehicles sales tax will bring in more revenue than previously estimated. Combs also predicted that the rainy day fund will have an additional $300 million. This announcement was good news for budget conferees hard at work coming up with a budget for the next biennium.

Speaking of the budget, the conference committee on House Bill 1, the appropriations bill, is still working toward an agreement. The House has postponed consideration of various bills dealing with state “fiscal matters” until tomorrow morning. These bills are designed to provide additional revenue to be used in the budget. With 13 days left in the regular session, a special session this summer remains a strong possibility.

The Texas Legislature has passed House Bill 2403 which specifically defines what constitutes a “nexus” in the state for the purpose of collecting taxes. The bill requires online retailers with a warehouse or distribution center in Texas to collect state sales taxes. This legislation addresses an issue raised by Texas Comptroller Susan Combs who billed Amazon $269 million in back taxes. The Seattle-based website argued that its distribution center in Irving near Dallas was owned by a legally separate entity with a similar name. House Bill 2403 now heads to Governor Perry for his signature.