State Rep, Gregg Co. officials opposes bill which would change policy on state sales tax revenue

E Commerce Tax Bill

LONGVIEW, Texas (KLTV) - A bill that is now out of committee, if passed into law would change collected sales tax from the point of origin to the point of destination. That means distribution centers would not generate sales tax for the community where they are located. State Representative Jay Dean and Longview officials are against the passage of House Bill 4072.

HB 4072 authored by Chairman Morgan Meyer of the Ways and Means Committee has opposition not only from State Rep Jay Dean, but from Gregg County leaders like Gregg County Judge Bill Stoudt.

“It’s about rural versus urban. The population’s centers are who orders the most out of these big box ecommerce facilities. They obviously will get the majority of the sales tax that is charged,” Stoudt said.

In February it was announced that the GAP would be building a distribution center in Longview, and Gregg County officials offered incentives based on projected sales tax.

“We’re very concerned that if this bill passes, it will have a very negative impact on that project,” said State Representative Jay Dean.

According to LEDCO CEO Wayne Mansfield, exactly what that impact would be for Texas communities are unknown.

“And that’s one of the concerns. I mean obviously it’s going to have a very, very negative impact on, especially, rural communities in terms of generating sales tax revenue,” Mansfield said.

These officials say incentives like relocating utilities or supplying grants or low interest loans are funded by local economic development, cities and counties, based on future sales tax revenue. They say if the bill passes there wouldn’t be any taxes coming into town, and businesses would have to calculate and pay sales tax to thousands of communities in Texas.

“Our fight is that it’s just not fair that all of a sudden that the legislature can pull communities out of these agreements. My big concern is making sure that we do everything we can to push this bill away and make sure it has no negative impact on our new exciting GAP project,” Dean said.

Judge Stoudt says bills should come from ideas generated by tax payers and then in turn by state representatives in the form of bills.

“Now ideas are coming out of Austin and shoving them down our throat,” Stoudt said.

Officials say that if passed there will be a loss of millions of dollars to cities and counties who have ecommerce distribution sites, and will also affect small businesses based in one city that perform services out of town.

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