Business Inventory Tax Reform

Texas is one of only 9 states with a business inventory tax, which taxes the value of raw materials, finished goods, supplies and parts that manufacturers need to run a business. The business inventory tax forces many companies to store the materials they need outside of Texas. TAM successfully advocated for inventory tax relief to the aerospace industry in the 2013 session through a longer-term extension of the Freeport Exemption. However, all industries need tax relief on raw materials, supplies, spare parts, and finished goods awaiting transit to encourage business expansion and economic growth in Texas.