85(R) - 2017
Relating to the retention and use of sales tax revenue collected by certain retailers to provide job training and placement services to certain persons.
From the Legislative Budget Board: there would be a negative impact of ($14,900,000) to the General Revenue Fund through the biennium ending August 31, 2021.
SB 275 would amend the Tax Code so that certain retailers which qualify as a workforce training community center may retain the lesser of 30 percent or $1 million of the sales tax imposed during the first year of certification and the lesser of 50 percent or $1 million the remaining period of certification to provide job training and placement services, develop a training and employment plan for each person assisted, and monitor the job retention for person placed. The organizations this would apply to would be charitable organizations that have experience in workforce training and job placement services and are 501(c)(3) organizations. Qualifying organizations would include Goodwill and similar organizations.
Vote Recommendation Notes
Registered nonprofit organizations which run retail stores selling donated goods do not need taxpayer subsidies to run their charitable operations. While we recognize the value of these programs being offered by charitable organizations (which is the proper domain for such programs) it is not the proper role of a limited government to fund these private training programs with tax dollars. For these reasons we oppose SB 275.
Additionally, we note that some will argue this is a tax break for the retailer. We disagree. The taxes this legislation proposes to use as a source of funding for these programs is the sales tax that the retailer collects on behalf of the government when a customer makes a purchase. Allowing a retailer to keep and use for its own charitable purposes taxes it collects on behalf of the government is not a tax break for the retailer, it is a state mandated redistribution of wealth from a consumer to a charitable organization.