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Margins Tax

No matter how you evaluate Texas’ business franchise tax, commonly called the “margins tax,” it fails the least-burdensome-tax test and fails to allow Texans the opportunity to flourish. This broad-based, gross-receipts-style margins tax is far more complex and unique among all taxes nationwide—with only Nevada having a similar gross-receipts-style tax. Eliminating this onerous tax would best serve Texans.

“Texas' margin tax is complex, costly, and difficult to comply with, giving rise to a less competitive state business climate.”
— The Honorable Talmadge Heflin

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The Honorable Talmadge Heflin

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Recommendations

  • Spur economic growth and create more jobs in Texas by eliminating the Texas business margins tax.

Talking points for liberty fighters

  • Texas’ margins tax is complex, costly, and difficult to comply with, giving rise to a less competitive business tax climate, for which the Tax Foundation ranks Texas 13th overall and second worst in the corporate tax ranking.
  • Texas does not have a revenue problem. Between the 2004-05 to 2018-19 budgets, the state’s estimated total tax collections increase is 97%, much faster than the 63% increase in population growth and inflation.
  • The margins tax fails to be a least burdensome tax and to allow Texans the opportunity to prosper.

Research