Tax Structures that Promote Economic Growth

TAM supports a competitive tax climate that will incentivize investment by new and existing businesses. Sometimes, the State of Texas must adjust how taxes are applied in order get the attention of capital-intensive projects. Simply said, strategically limiting tax liability on certain investments may generate a net gain in local and state revenue. Encouraging growth of an industry by making the tax structure more competitive vis-à-vis neighboring states and countries can produce a net win for Texas governments and industries.

TAM supports a competitive Research & Development (R&D) Tax Exemption as it was originally designed by the Legislature. After decades of effort, the 2013 Texas Legislature passed a long-sought R&D incentive, which allows businesses to choose either a sales tax exemption or a franchise tax credit. This allows Texas to stay at the forefront of advanced manufacturing innovation – and attract this key element of business development to the State.

TAM supports an update to our tax laws regarding the sales and use tax for general aviation aircraft. Texas must align its aircraft sales tax exemption for maintenance, repair, and overhaul (MRO) of general aviation aircraft to be competitive with neighboring states. Texas MRO operators estimate a revenue loss three to five times what they remit in sales taxes due to a lack of parity with exempted states. Additionally, Texas is losing economic activity on fuel, hospitality, manufacturing, and maintenance. Making Texas competitive with neighboring states will help Texas’ significant general aviation industry continue to flourish.