DALLAS (March 10, 2023) – “The Mavericks, Rockets, and Spurs – and any other team in the NBA – are all subjected to a ‘luxury tax’ if their total roster salary exceeds the league’s salary cap,” NFIB member and small business owner Andy Ellard wrote in an op-ed for the Community News in Aledo, Texas. “But unlike the NBA’s luxury tax, which would bring teams closer to securing the NBA Title, Texas’s inventory tax only sets small businesses behind year after year.”

To learn more about NFIB’s ‘Cut the Inventory Tax,’ visit NFIB.com/TexasTaxCut. CLICK HERE for a short video featuring Ellard. CLICK HERE to read the full op-ed. Excerpts are below:

It’s time to cut the inventory tax
Andy Ellard
The Community News
March 8, 2023

[…] Unlike the NBA’s luxury tax, which would bring teams closer to securing the NBA Title, Texas’s inventory tax only sets small businesses behind year after year.

During Governor Abbott’s state of the state address, he reiterated his commitment to providing meaningful property tax relief for Texans. I was relieved to hear him include it as his first emergency priority for the 88th Legislature. Hopefully, they heed his urgency.

[…]

To meet our customers’ needs, we keep roughly $100,000 worth of metal in our inventory. Without it, we’d be toast. Our customers appreciate knowing that when they come to us, we can tackle their projects quickly and professionally. But Texas taxes that inventory – and everything else in our business – regardless of whether or not it turns a profit. All of it is taxed every year.

[…]

This year, we cut a check to the state of Texas for nearly $20,000 on our inventory and equipment. As a small business owner, that $20,000 goes a long way. It’s a mere drop in the bucket for the state, which has a record-breaking budget surplus. Without that tax, over time I’d be able to invest in my business to expand our operations, hire more workers, and increase my employees’ wages.

It’s also terrible for consumers. I have to make decisions about how much or how little inventory I keep on hand. With more supply, I pay a higher inventory tax. With less supply, I run the risk of shipping delays. Either way, we run into the risk of increased costs.

[…]

As only one of nine states that fully taxes a business’ inventory, it’s hard to overstate the competitive disadvantage of the tax. It’s time for Texas to stand up for small businesses and pass meaningful tax relief.

[…]

I hope the 88th Legislature takes this issue seriously and delivers a victory for small businesses. That’d certainly be more appreciated than any NBA Title.

Andy Ellard owns and operates Manda Machine Company, Inc. in Dallas.