84(R) - 2015
House Ways & Means
House Ways & Means
Relating to the retention and use of sales tax revenue collected by certain retailers to provide job training and placement services to certain persons.
A fiscal note dated April 20, 2015 anticipates a negative two-year net impact to General Revenue Related Funds or CSHB 2341 of $23,100,000 through the biennium ending August 31, 2017.
House Bill 2341 would amend Chapter 151 of the Tax Code to provide a sales tax retention for certain nonprofits that provide job training and placement services for people with disabilities or other barriers to employment.
Qualifying nonprofits would have to collect and remit sales taxes imposed on the sale of donated goods, to have significant experience in job training and placement services for people with disabilities or other barriers to employment, to be affiliated with a national or statewide organization, and have annual sales of at least $1 million.
A qualified organization would be allowed to retain 50 percent of the sales taxes imposed under Chapter 151 and collected by the organization during the period it is certified by the comptroller as a qualifying organization.
The money would have to be used for specific uses listed in the bill and related to job training and placement services for people with disabilities or other barriers to employment. In the first year of its certification as a qualifying organization, the organization could use the money to improve its infrastructure.
The certification would have to be renewed every three years, and could be only if the organizations had completed all the requirements. A revocation of a certification would require the comptroller to organize a hearing and to notify the organisation in advance.
Vote Recommendation Notes
While 501(c)3 organizations are exempt from paying taxes on the goods they buy, House Bill 2341 would create a sales tax retention program that would subsidize the job training programs of certain nonprofits by allowing them to keep 50 percent of the sales tax they collect from the donated goods they sell.
While we understand that this bill is well-intentioned and aims at helping nonprofits that help people with disabilities or other barriers to employment, the role of a limited government is not to redirect the revenues from certain taxes for certain charity programs, in other words, the role of government is not to be generous with other people's -- taxpayers' -- money.
On the other hand, a lower level of taxation would allow for individuals to be able to keep more of their hard-earned money and possibly let them freely donate more of it to nonprofits, allocating the donations to the nonprofits they consider most efficient.
House Bill 2341 would increase the scope of government and as a consequence, we oppose it.