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Texas small business owners hope lawmakers will give them a break on property taxes

Texas small business owners hope lawmakers will give them a break on property taxes
Texas small business owners hope lawmakers will give them a break on property taxes 02:22

DALLAS (CBSDFW.COM) – Homeowners aren't the only ones pushing Texas lawmakers to give them a break on their property taxes.

So are small business owners like Andy Ellard, owner and general manager of Manda Machine Company.

The West Dallas business has been family-owned for three generations. 

Ellard said, "It's just a regressive tax."

The company keeps about $100,000 worth of metal in its inventory. "I couldn't make anything and sell anything if I didn't have this inventory to start with. We use these metals to make the parts then sell to the customer." 

Like other businesses, Manda Machine pays property tax on its inventory and on the depreciating value of its equipment.

Texas is one of only nine states requiring this. 

All told: Manda Machine pays more than $19,000 in taxes on equipment and inventory.

That doesn't include the $9,000 in property tax they also pay for their building and land.

Because of COVID, Manda Machine lost money during an 18-month period. 

But Ellard pointed out they still had 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, is it in your building."

With the record-breaking surplus in the state budget of nearly $33 billion, he and the National Federation of Independent Business or NFIB are hoping state lawmakers will take action. "As a state, we ought to give the money back to the citizens", said Ellard.

In a statement, the State Director of the NFIB, Annie Spilman said, "Increasing the exemptions for, or completely repealing the business personal property tax (or inventory tax) has long been a priority for NFIB."

Since 1995, only the first $500 of a business's equipment and inventory were exempt.

That exemption rose to $2,500 two years ago. 

In October, Governor Greg Abbott campaigned at Manda Machine saying he wants to increase the exemption on this tax to $100,000.

Ellard said that would save the company about $2,000 a year in property taxes. "I think that $100,000 is a good starting point, but it needs to go up so that I can be competitive with California, with New York, with Oklahoma, Louisiana."

Spilman said, "NFIB commends him for that proposal and believes it's an excellent starting point for debate."

State lawmakers CBS11 spoke with said relief for small businesses is a priority.

Senator Drew Springer, R-Gainesville said, "I think the majority needs to be given back to the people we took it from and that's the taxpayers and so we need to be doing property tax relief."

Representative Victoria Neave Criado, D-Mesquite said, "We want to help small businesses thrive and make sure they are creating jobs. Latino-owned businesses are some of the fastest-growing in the state and the nation and small businesses are job creators."

Ellard said he's hoping state lawmakers are listening. "I'm confident something's going to happen. What that is, I don't know."

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