March 20, 2006
Texas Governor Rick Perry announced Friday that he would call a special session of the Texas Legislature, to begin on April 17th, to revise the state’s school finance system. The Texas Supreme Court ruled last year that the current funding system is unconstitutional and set a deadline of June 1st for revising it.
Advertising taxes have been seriously considered in past sessions so it is important for the advertising community to be diligent again during this special session.
School finance issues have been very contentious for several years in Texas. The legislature was unable to reach agreement on a new school funding system in each of the past two regular sessions and two special sessions last year.
The House and Senate each have select school finance committees that have been holding hearings around the state. A commission of 24 business leaders appointed by the Governor is expected to make recommendations soon on school finance reform.
During the regular session in 2005, the bill passed by the House in March would have increased the state sales tax by one cent and extended the tax to cover all billboard advertising in the state. Several years ago, the Texas Senate passed a bill that would have taxed many business services, including advertising.
ANA has worked closely over the years with our member companies and local industry groups in Austin to oppose any new tax on advertising. It’s not clear yet whether advertising taxes will be on the table next month, but we will continue to closely follow developments on this special session.
If your company has significant operations in Texas, it would be very helpful to contact members of the Legislature to express your opposition to any tax on advertising. Contact information for the Legislature is available at http://www.capitol.state.tx.us/capitol.htm.
If you have any questions or more information about the tax situation in Texas, please contact Keith Scarborough, ANA Vice President for State Government Relations at kscarborough@ana.net or (202) 296-1883.