DALLAS (CBSDFW.COM) – It’s not just homeowners forcing Texas lawmakers to give them a property tax break.
So are small business owners like Andy Ellard, owner and CEO of Manda Machine Company.
The West Dallas company has been family-owned for three generations.
Ellard said, “It’s just a regressive tax.”
The company keeps about $100,000 of the metal in its inventory. “I wouldn’t be able to make and sell anything if I didn’t have this inventory to begin with. We use those metals to make parts that we then sell to the customer.”
Like other businesses, Manda Machine pays property taxes on its inventory and on the depreciated value of its equipment.
Texas is one of only nine states that require it.
All told: Manda Machine pays more than $19,000 in taxes on equipment and inventory.
That doesn’t include the $9,000 in property taxes they also pay on their building and land.
Due to COVID, Manda Machine lost money over a period of 18 months.
But Ellard pointed out that they still have to pay the same tax on their equipment and inventory. “It’s not based on profitability, it’s not based on usage, it’s just based on whether it’s in your building.”
With a record state budget surplus of nearly $33 billion, he and the National Federation of Independent Business, or NFIB, are hoping state lawmakers will do something. “As a country, we need to return the money to the citizens,” said Ellard.
In a statement, NFIB State Director Annie Spilman said, “Increasing the exemption or completely eliminating the personal business property tax (or inventory tax) has long been a priority for the NFIB.”
Since 1995, only the first $500 of a company’s equipment and inventory has been exempt.
That exemption rose to $2,500 two years ago.
In October, Governor Greg Abbott campaigned in Manda Machine saying he wanted to increase the exemption from this tax to $100,000.
Ellard said that would save the company about $2,000 a year in property taxes. “I think $100,000 is a good starting point, but it needs to go up to be competitive with California, New York, Oklahoma, Louisiana.”
Spilman said, “The NFIB commends him for that proposal and believes it is an excellent starting point for discussion.”
State lawmakers spoke to CBS11 saying relief for small businesses is a priority.
Sen. Drew Springer, R-Gainesville, said, “I think most of it needs to be returned to the people we took it from, which is the taxpayers, so we need to lower property taxes.”
Rep. Victoria Neave Criado, D-Mesquite said, “We want to help small businesses thrive and make sure they create jobs. Hispanic-owned businesses are among the fastest growing in the nation, and the nation and small businesses are creating jobs.”
Ellard said he hopes state lawmakers are listening. “I’m sure something will happen. I don’t know what it is.”