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Texas Press Messenger
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Thursday, 10 June 2010 11:38 |
 By DOUG TONEY
Our state’s multi-billion-dollar budget deficit looms as the dominant issue of the 2011 session of the Texas Legislature.
The House Committee on Ways and Means and the Senate Finance Committee are already scrutinizing current tax exemptions, such as Tax Code § 151.319, Newspapers and Property Used in Newspaper Publication.
Now is a good time for each Texas newspaper publisher to contact their state representative and senator. Learn how your legislators feel about newspaper-related tax exemptions before the November election. Take advantage of the lull before the storm and schedule a visit with each lawmaker whose district includes any part of your market area.
Please don’t go into the conversation cold. Think now about what’s at stake for your newspaper operation, and your community, if any current tax exemption were repealed.
Here is some information that might be helpful:
Circulation Tax
Taxing both single copies and paid circulation was tried in the 1980s as a revenue-raising measure and was repealed soon after when it was deemed unworkable. Because of the nature of newspaper distribution, a circulation tax is difficult to collect and administer. It also raises the question of how appropriate it is to tax information in a newspaper when other news outlets like the Internet, radio and television are not taxed in this manner.
Falling circulation numbers might help convince the Legislature that this fight wouldn’t be worth it in the long run. The real danger would be that legislators would consider repealing ALL sales tax exemptions, except for food and medicine. Given the intense lobbying pressure they would be under in trying to do that, it seems unlikely at this point.
Advertising Tax
Another scenario would have the Legislature considering taxing services. Like industries that are not currently taxed, advertising would be seen as a source of millions of dollars in revenue if the exemption were removed. We have faced this issue in the past and have been able to work with others in the advertising industry to help thwart it.
The main argument against a tax on advertising is the experience other states have had. Florida’s attempt to apply the sales tax to advertising resulted in a big drop in tourism dollars coming into the state and helped defeat several influential members of the Legislature. Taxing advertising is a bad idea because it’s like applying a brake to one of the main economic engines of the economy.
Manufacturing Exemption
Removing any manufacturing exemptions would be very difficult politically and would go against Texas’ longstanding tax policy that sales taxes should tax the end user, not each person or entity affected during production. Texas newspapers, like many other industries, currently enjoy a sales tax exemption for the purchase of any equipment or goods that are used in their manufacturing process. As an industry, we want to be treated the same as other industries and will fight to keep our manufacturing exemption. Good arguments can and will be made that these exemptions are a key reason Texas enjoys a good business climate.
Please take the opportunity to talk with your legislators now so they know how important these issues are to our industry.
Doug Toney is chairman of the Texas Daily Newspaper Association / Texas Press Association Legislative Advisory Committee and publisher of the Herald-Zeitung in New Braunfels.
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Last Updated ( Thursday, 10 June 2010 11:46 )
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