HB 735 Eliminates the Telecommunications Infrastructure Fund Tax
Published: 05-25-07
Published: 05-25-07
Austin Texas – The Texas Senate tonight passed significant tax relief for Texans by passing House Bill 735 eliminating the Telecommunications Infrastructure Fund (TIF) tax. Senate passage is the last major hurdle in bringing more than $600 million in tax relief to millions of Texans.“Today is a great day for Texas taxpayers” said Rolando Pablos with the Hispanic Alliance for Progress Institute and President of Texans for Taxpayer Relief. “The Senate has voted to end an outdated tax that 9 out of every 10 Texans pay each month.”
The TIF was created over a decade ago to provide updated technology and broadband access for Texas schools libraries and non-profit hospitals. This program was funded by a 1.25 tax on Texas telephone subscriber’s services which was to be eliminated once the TIF’s goal was achieved. The FCC estimates 91.1 percent of all Texans have a wire line phone at home or a wireless phone that is currently subject to the TIF tax.
The TIF program reached its goal in 2003 but in the face of massive budget shortfalls legislators opted to divert TIF revenues into the general revenue fund. The TIF tax was instead set to expire in 2011. With the current budget surplus the legislature voted to end the TIF tax with passage of House Bill 735. The Senate amended HB 735 to eliminate the TIF tax in September 2008 three years earlier then its current sunset date but one year later than the House version of HB 735.
“The TIF served its purpose and schools and libraries are wired and updated” said Peggy Venable with Americans for Prosperity-Texas. “Since we no longer dedicate TIF revenues to improving telecommunications infrastructure we should end the tax. Today lawmakers did just that.”
A recent study by the Texas Public Policy Foundation found that Texans pay some of the highest taxes for telecommunications services.
“Lawmakers are sending a message to taxpayers they understand that cutting telecommunications taxes is good for all Texans” said James Cardle with the Texas Citizen Action Network. “Texas consumers already pay the third-highest telecommunications taxes in the nation and this relief will go a long way to ease the burden on citizens and allowing businesses to remain competitive.”
Passage of HB 735 repealing the TIF tax is expected to be one of the largest tax repeals in the state’s history.
“Eliminating the TIF tax represents one of the largest tax cuts in Texas history” said Michael Quinn Sullivan with Texans for Fiscal Responsibility. “Today our legislature took a positive step toward reining in government spending and letting taxpayers keep their hard-earned money.”
House Bill 735 was amended in the senate and requires concurrence either from the bill’s sponsor Rep. Joe Straus (R-San Antonio) or possibly the entire house. If approved the measure will go to Governor Perry for final approval. Senator Tommy Williams (R-The Woodlands) was the Senate sponsor.
A broad assortment of groups support eliminating the Telecommunications Infrastructure Fund this year including: Americans for Prosperity-Texas Early Chamber of Commerce FreedomWorks Greater Houston Partnership Greater San Antonio Chamber of Commerce Hispanic Alliance for Progress Institute the Longview Partnership MyWireless.org National Black Chamber of Commerce National Federation of Independent Business-Texas Property Rights Organization of Texas Rockport-Fulton Area Chamber of Commerce Texans for Texas Texans for Taxpayer Relief Texas Association of Business Texas Citizen Action Network Texas Eagle Form Texas Federation of Republican Women and Texans for Fiscal Responsibility and the Texas Public Policy Foundation.
