Charles Leggette is comfortable with numbers. But the figures his accountant showed him recently created some emotional upheaval for the actuarial consultant: His bill for the state’s franchise tax increased by seven times, to $18,542.
That’s even though revenue at Leggette Actuaries/Consultants declined slightly in 2007 from the year before.
“We’re investigating moving our headquarters out of Texas,” Mr. Leggette said Monday.
Small-business advocates say Leggette Actuaries isn’t the only one. Though there is talk of tweaking the tax in next spring’s legislative session, that might be too late, said Laura Stromberg, spokeswoman for the National Federation of Independent Business in Austin. “There are too many businesses in Texas that can’t afford to wait until May of ‘09,” she said. “They’ll be shut down.”
In a May letter to Gov. Rick Perry, Mr. Leggette criticized the burden the revised tax places on small companies: “In my mind, this moves the state of Texas from being what used to be, a business-friendly state to a business-unfriendly state.”
As part of an overhaul of the state’s tax system, the Legislature passed the new franchise tax in 2006 to bring in as much as $6 billion a year in revenue. The old tax produced less than half that amount.
Allison Castle, a spokeswoman for the governor, said the franchise tax needed changing. “Only 1 in 16 companies were paying the tax. … That was not fair.”
Photo from Stock.xchng.
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