DALLAS, March 17, 2017 /PRNewswire/ -- As of the past few days, there seems to be an apparent shift in Governor John Bel Edwards' tax reform recommendations going into the 2017 Fiscal Session, which convenes on April 10, 2017. Although the Governor initially embraced the findings and recommendations of the HCR 11 Task Force (Final Report found here), assembled to study and reform the state's tax laws and budget structure, the Governor is now considering a Gross Receipts Tax to replace the looming fiscal cliff of approximately $1.4 billion. The Gross Receipts Tax, potentially being modeled after the Commercial Activity Tax (CAT) in Ohio, was not a recommendation of the Tax Reform Task Force and represents a major pivot only a few weeks from the start of the Fiscal Session. Other major planks of the Governor's plan that are being discussed are repealing the Corporate Income Tax and to begin a phase out of the Corporate Franchise Tax.
The Administration appears to still be moving forward with its push to expand the sales tax base to include those services which are taxed in Texas and was a recommendation of the HCR 11 Task Force. However, in conjunction with the Gross Receipts Tax and the expansion of the sales tax base to services, it appears the Governor's desire is to try and reduce the temporary 5% state sales tax rate. The combination of these reforms would potentially allow Governor Edwards to handle the impending fiscal cliff. Obviously, these developments represent a major shift just a few weeks prior to the 2017 Fiscal Session, and we will continue to update you with details of the plan as they are released. The Governor plans to do a formal announcement of his Tax Reform Plan on March 27, 2017.
On April 6, 2017, we will be conducting a pre-session webinar to release and discuss all the details of the Governor's Tax Reform Plan before the start of the Legislative Session on April 10, 2017.
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