The renewed look at tax breaks has generated a widespread case of jitters among lobbyists and interest groups, who are scrambling to build a case for their particular exemptions before next year’s legislative session. Many of the exemptions have powerful constituencies that would strongly resist any change.
“Any business or industry that benefits from such exemptions or exclusions would be well-advised to watch the interim hearings and be very involved in the session, because there won’t be many exclusions or exemptions that won’t be on the table,” said Gaylord Armstrong, a senior partner at the law firm of McGinnis, Lochridge & Kilgore and a veteran lobbyist who represents a variety of business, industries and trade associations.
[House Ways and Means Committee Chairman Rene Oliveira, D-Brownsville]‘s hearings constitute the first broad-based review of sales tax exemptions in years and have generated a buzz about which items are likely targets. Bottled water, which currently isn’t taxed, is mentioned as a possible new revenue source, but retailers are gearing up to defend those exemptions.
“We are watching those hearings very closely,” said Ronnie Volkening, president of the Texas Retailers Association, saying that bottled water should be considered in the same category as food. “Water is essential to life,” he said. “Any time there is a natural disaster, one of the greatest needs is to get bottled water to people.”
The state’s medical community is prepared to fend off a possible tax on cosmetic surgery. “Medical practices are really not traditional businesses, and we don’t think the patients of Texas should be taxed for their healthcare,” said Dr. Susan Bailey, a Fort Worth allergist who will become president of the Texas Medical Association on May 1.
In many instances, she said, cosmetic surgery is often used for reconstructive purposes, such as for patients who have undergone surgery for breast cancer. “It’s difficult to take any one medical procedure and say that it’s not medically necessary,” she said.
But it is easy to say what’s generally covered by insurance and what isn’t, and I daresay the latter would include an awful lot of truly elective surgical procedures. Why shouldn’t they be subject to the sales tax? As for the bottled water exemption, give me a break. If the total amount of bottled water bought as part of hurricane preparation is more than two percent of all sales, I’ll be shocked. If we’re that concerned about it, a provision can be written in to allow for the suspension of the tax any time an area is under a hurricane watch.
This is just special interest politics at its most basic. Everything that has an exemption from the sales tax has been deemed to be different somehow than everything else. Some of these things, like child care and basic medical services, have a clear justification for being singled out. Many of these things do not, and should not be treated any differently no matter how much their lobbyists or trade associations squeal. We would do well to tune all of that out and evaluate these claims on their merits. EoW has more.