So to beat the tax, companies that need to store goods longer keep merchandise in warehouses outside of Texas in neighboring states that do not impose an inventory tax. That’s not good for jobs and other economic growth here, especially in aviation and aerospace industries. Those industries contribute billions to the state economy. In some ways, we’d like to see lawmakers consider whether this tax should exist at all. But that issue’s not on the ballot. What is on the ballot is whether school districts, cities and counties should be allowed to extend an existing exemption from roughly six months to two years.
Generally, this newspaper is skeptical about exempting a single industry from requirements that other industries have to follow. Extending this exemption, however, could bring additional aviation jobs and warehouses to Texas and might even jumpstart a broader conversation about the inventory tax itself. The change is permissive, not mandatory, meaning that local jurisdictions would have the option of extending the exemption but not be required to do so. That makes its fiscal impact difficult to predict, but legislative experts don’t expect it to be significant to state revenue.
The measure passed unanimously in the House and Senate and, not surprisingly, has the support of aviation parts distributor Aviall, its parent Boeing, and Bell Helicopter, all of whom could benefit from the longer exemption. Support also comes from the Texas Association of Business, the Greater Irving-Las Colinas Chamber of Commerce, the Texas Association of Manufacturers and the Texas Taxpayers & Research Association.