Senator Eliot Shapleigh - El Paso, Texas

 AUSTIN — Small businesses launched a fresh push to change the revamped franchise tax Thursday, saying they're facing huge increases that will force them to raise prices and to put off hiring people or making planned purchases.

“It's a boondoggle that's nailed small business to the wall,” said Kurt Summers, an Austin businessman with the National Federation of Independent Business/Texas.

He spoke at a meeting of the coalition, which also includes the Independent Electrical Contractors of Texas, Air Conditioning Contractors of America Texas Chapter, Associated Plumbing-Heating-Cooling Contractors of Texas and Texas Courier & Logistics Association.

Tax reports had been due Thursday, but State Comptroller Susan Combs earlier pushed that back to June 16.

Shelly Miller of San Antonio-based Dependable Express said her company, because it was organized as a limited liability partnership, didn't have to pay the prior franchise tax. She said figures still are being worked on but that she already can tell that the new tax bill will be higher than they had expected.

“The money we had set aside to hire another person and purchase another large truck — we're not able to offer that position and not able to buy” the vehicle, said Miller, who runs the company with her husband, Jason. “We're going to have to put the money toward the tax.”

One person attending the meeting shouted out, asking who wrote the tax bill. When someone answered, “Jim Keffer,” the person said, “We need to get him out of office.”

Keffer, an Eastland Republican who heads the House Ways and Means Committee, responded, “You know, when you're asked to be chairman of Ways and Means, you've gotta be a big boy.”

Keffer said the Legislature is business-friendly — “It's no accident we have the No. 1 economy in the country” — and changes are possible after lawmakers see how the tax works, a view echoed by Allison Castle, Gov. Rick Perry's spokeswoman.

Keffer and Castle also contended NFIB leaders hadn't come to the table when it counted, while the tax was being developed. NFIB disputed that.

The expanded business tax was part of a package pushed by Perry and approved by lawmakers that also cut local school property tax rates. Backers called the new tax fairer because it brought businesses that weren't paying into the system and said those owing higher business taxes should look at whether the increase was offset by property tax relief.

Small-business owners at Thursday's meeting said the property tax relief has been overshadowed by the huge jump in the business tax, which is based on gross receipts, with deductions for cost of goods sold or employee benefits.

The coalition wants changes that exempt small businesses that are losing money or are marginally profitable, raise the small-business exemption from $300,000 to a minimum of $1 million, lower the tax rate for businesses with under $20 million in gross receipts, allow employment deductions for all contract labor used by Texas companies, limit a business's tax increase to no more than 100 percent of its highest bill under the old tax and require a two-thirds vote of lawmakers to raise the tax rate.