Tax relief for small companies passes in the House

NACOGDOCHES, TX (KTRE) - A Nacogdoches college bookstore is approaching its first year in business. In addition to start up costs, the state enacted a new business tax. Top it all off the economy worsened.  "This was one of the ways they were trying to fix the tax system and I applaud their efforts for looking at the tax system," said Pam Fitch, the store's owner.  "I applaud their efforts for looking at being creative and coming up with ideas, but we need to be careful and not over tax our small business."

The state house listened. A bill passed Monday would give businesses that make one million dollars or less annually a two year break from the state's business tax.  "So I think that's a good starting point to see where we land and it can always be reevaluated in two years,"  said Fitch. It now goes to the Senate for consideration.

It's the kind of relief a new scooter business owner says company owners deserve. "We need more help for small businesses because that's where jobs are created," said Greg James, owner of Lone Star Scooters. Economic developers say it's important to remember the impact small companies have in Texas. "Small businesses employ more people than large businesses when you add it all up and so this really effects the majority of the employees," explained Peggy Muckelroy, vice president of Nacogdoches Economic Development Corporation.

The two year break and a higher exemption will help. At the same time other taxpayers may have to make up for the $172-million in lost revenue to the state.