AUSTIN (Feb. 26, 2025) – The National Federation of Independent Business (NFIB), Texas’ leading small business advocacy organization, announced its strong support for HB 9, a bill to raise the personal property tax (also known as the inventory tax) exemption for businesses to $250,000, up from $2,500. In a statement, NFIB State Director Jeff Burdett outlined how the much-needed relief would strengthen the local economy.

“Main Street is the foundation of our state’s economy, providing good-paying jobs for hardworking Texans. In the past few years, that foundation has been challenged by economic uncertainty, inflation, and workforce challenges. Raising the exemption would deliver much-needed relief to our small business owners so they can continue to do what they do best: create jobs and invest in our communities. On behalf of our members across the state, we thank Ways and Means Chairman Morgan Meyer and Speaker Dustin Burrows for introducing HB 9 and look forward to working with lawmakers to get this critical tax cut across the finish line and to the Governor’s desk for signature.”

Background:

Texas is one of only nine states that taxes businesses on their inventory. This tax applies to anything used in the production of income, including inventory, furniture, machinery, supplies, and more – regardless of whether a business nets a profit.

NFIB has long supported efforts to increase the inventory tax exemption or completely repeal this regressive tax. In 2021, the legislature increased the exemption from $500 to $2,500, the first increase since 1995. In 2023, one small business owner in Spring Branch told ABC 13 the inventory tax is ‘double taxation,’ urging the Legislature to eliminate the tax.